{"product_id":"option-theory-isbn-9780471492894","title":"Option Theory","description":"A unified development of the subject, presenting the theory of options in each of the different forms and stressing the equivalence between each of the methodologies.\u003cbr\u003e * Demystifies some of the more complex topics.\u003cbr\u003e * Derives practical, tangible results using the theory, to help practitioners in problem solving.\u003cbr\u003e * Applies the results obtained to the analysis and pricing of options in the equity, currency, commodity and interest rate markets.\u003cbr\u003e * Gives the reader the analytical tools and technical jargon to understand the current technical literature available.\u003cbr\u003e * Provides a user-friendly reference on option theory for practicing investors and traders.  Preface.  \u003cp\u003ePART I: ELEMENTS OF OPTION THEORY.\u003c\/p\u003e \u003cp\u003eFundamentals.\u003c\/p\u003e \u003cp\u003eOption Basics.\u003c\/p\u003e \u003cp\u003eStock Price Distribution.\u003c\/p\u003e \u003cp\u003ePrinciples of Option Pricing.\u003c\/p\u003e \u003cp\u003eThe Black Scholes Model.\u003c\/p\u003e \u003cp\u003eAmerican Options.\u003c\/p\u003e \u003cp\u003ePART II: NUMERICAL METHODS.\u003c\/p\u003e \u003cp\u003eThe Binomial Model.\u003c\/p\u003e \u003cp\u003eNumerical Solutions of the Black Scholes Equation.\u003c\/p\u003e \u003cp\u003eVariable Volatility.\u003c\/p\u003e \u003cp\u003eMonte Carlo.\u003c\/p\u003e \u003cp\u003ePART III: APPLICATIONS: EXOTIC OPTIONS.\u003c\/p\u003e \u003cp\u003eSimple Exotics.\u003c\/p\u003e \u003cp\u003eTwo Asset Options.\u003c\/p\u003e \u003cp\u003eCurrency Translated Options.\u003c\/p\u003e \u003cp\u003eOptions on One Asset at Two Points in Time.\u003c\/p\u003e \u003cp\u003eBarriers: Simple European Options.\u003c\/p\u003e \u003cp\u003eBarriers: Advanced Options.\u003c\/p\u003e \u003cp\u003eAsian Options.\u003c\/p\u003e \u003cp\u003ePassport Options.\u003c\/p\u003e \u003cp\u003ePART IV: STOCHASTIC THEORY.\u003c\/p\u003e \u003cp\u003eArbitrage.\u003c\/p\u003e \u003cp\u003eDiscrete Time Models.\u003c\/p\u003e \u003cp\u003eBrownian Motion.\u003c\/p\u003e \u003cp\u003eTransition to Continuous Time.\u003c\/p\u003e \u003cp\u003eStochastic Calculus.\u003c\/p\u003e \u003cp\u003eEquivalent Measures.\u003c\/p\u003e \u003cp\u003eAxiomatic Option Theory.\u003c\/p\u003e \u003cp\u003eMathematical Appendix.\u003c\/p\u003e \u003cp\u003eBibliography and References.\u003c\/p\u003e \u003cp\u003eIndex.\u003c\/p\u003e \u003cb\u003ePeter James\u003c\/b\u003e was educated at Magdalen College, Oxford and at University College, London. His first degrees are in Theoretical Physics and in Econometrics and Statistics, and he has a PhD in Relativistic Quantum Mechanics.\u003cbr\u003eHe was formerly head of International Investment Banking at NationsBank (now Bank of America).\u003cbr\u003eHe has many years experience in the derivatives markets at Merrill Lynch, DKB Financial Products and Credit Agricole Lazard Financial Products, where he is currently Head of Risk Management.  Option Theory takes the reader from first principles to the frontiers of modern finance theory. The book is aimed at busy financial engineers at all levels, providing formulas and techniques that can be readily applied to real life problems; yet the theoretical basis of the subject is explored in detail so that the book will also appeal to students and researchers.\u003cbr\u003e \u003cbr\u003e Written in a clear and accessible manner, the author covers the various approaches to option pricing: risk neutral expectations by integration, trees, analytical and numerical solutions of partial differential equations and Monte Carlo methods, demonstrating the close relationship between them.\u003cbr\u003e \u003cbr\u003e Structured into four parts, the mathematical tools used in the first three parts of the book are intermediate level \"engineer's mathematics\": differential and integral calculus, elementary statistical theory and simple partial differential equations. In Part Three, the techniques are systematically applied to all the standard exotic options encountered in the equity, foreign exchange and commodity markets. It is shown that the exotics are not a large random collection of unrelated instruments, but a few families which can be simply analysed using the techniques developed in Parts One and Two.\u003cbr\u003e \u003cbr\u003e Part Four provides a course in stochastic calculus that is specifically tailored to finance theory and designed for readers with some previous knowledge of options. It provides an active working knowledge of the subject and includes coverage of:\u003cbr\u003e * Martingales.\u003cbr\u003e \u003cbr\u003e * Stochastic differential equations.\u003cbr\u003e \u003cbr\u003e * Stochastic integration.\u003cbr\u003e \u003cbr\u003e * The Feyman Kac theorem.\u003cbr\u003e \u003cbr\u003e * Stochastic control.\u003cbr\u003e \u003cbr\u003e * Local time.\u003cbr\u003e \u003cbr\u003e * Girsanov's theorem.\u003cbr\u003e The axiomatic approach to option theory using stochastic calculus is compared in detail to the simpler and more intuitive approach using classical statistics, which was used in the first three parts of the book. The analysis clearly shows where stochastic calculus provides valuable insights and advances, and where it is mere window dressing.\u003cbr\u003e \u003cbr\u003e This is a no-nonsense professional book which demystifies and simplifies the subject, and which will appeal to both practitioners and students.","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47989723824357,"sku":"NP9780471492894","price":195.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9780471492894.jpg?v=1761785254","url":"https:\/\/k12savings.com\/products\/option-theory-isbn-9780471492894","provider":"K12savings","version":"1.0","type":"link"}