Description
Traditional options, sometimes referred to as "vanilla" options, have been traded for hundreds of years and are fairly well understood, while exotic options are a newer instrument. Known by such unusual names as collars, barriers, and com- pounds, exotic options reflect some of the most innovative and creative thinking on Wall Street.
The Handbook of Exotic Options is the first book to explain the theoretical foundations, structures, and applications of these exciting new instruments. Edited by Israel Nelken, one of the foremost experts in the field, this handbook provides an in-depth explanation of the latest uses of exotic options by institutional investors and corporate treasurers, as well as the latest thinking on advanced topics. Inside you will find valuable discussions of
- Options theory, volatility, and pricing.
- Detailed pricing models of the various options.
- When should exotic options be used.
- Risk management applications of exotic options.
While a vanilla option pays off depending on the price of the underlying asset, the payoff of an exotic option typically depends on some function of the price of the underlying asset, or on a relationship between several underlying assets. The Handbook of Exotic Options will assist you in understanding and using these new financial instruments.
