Pricing and Hedging Financial Derivatives: A Guide for Practitioners
“This text fills an existing gap in the market. Too many books on pricing and hedging are filled with dreary equations whose only purpose is to show off how clever the author is relative to his readership. In the real world there is an old market adage that says 'the price of any derivative is driven by the underlying hedge' so this text is particularly relevant and useful. Any reader will walk away from this text with an excellent applied understanding of the pricing principles that underpin all of the main derivative asset classes.”—Neil C. Schofield, Managing Director, Financial Markets Training Ltd“Marroni and Perdomo offer a rare glimpse into the world of financial derivatives through a practitioners perspective. The book takes you through basic and complex derivatives from a variety of asset classes, and highlights how the professional trader or structurer uses them. Using real life examples from their years of financial experience the authors show you both the academic and the practical sides of how financial derivatives are priced and traded.”—Patrick E. Boyle, Founding Partner, Palomar Fund Management“This book is highly recommended to students and professional derivatives traders. The book provides an excellent balance conceptualising the mathematics of financial derivatives with more practical discussions around hedging and managing derivatives investments. The authors have extensive practical experience at top tier investment banks and hedge funds and combine this with an ability to explain the underlying theory with great clarity. An excellent guide to the world of derivatives and hedging.”—Jesse McDougall, Visiting Professor, Queen Mary, University of London“This book captures the core of derivative products with a simple but yet rigorous approach. It also provides illustrative examples and simulations to strengthen the intuition behind the concepts. The authors have done an excellent job combining rigor and practice in a compelling and fluent style; something that is not very easy to achieve. Those who are looking for a broad understanding of these complex issues won't be disappointed.”—Pedro Videla, Economics Professor, IESE Business School“Marroni and Perdomo’s book offers an excellent practical guide to how derivatives are priced and can be used for trading and hedging. The book contains numerous helpful examples that are presented with clarity and without unnecessary technical digressions. Both newcomers to derivatives and seasoned practitioners will certainly want a copy of this book in their reference libraries.”—Christopher L. Culp, Adjunct Professor of Finance, The University of Chicago Booth School of Business/Senior Advisor, Compass Lexecon