Derivatives The Key Principles

This book is intended to serve as a practical guide to derivatives, developing an explanation of the different derivative products, the uses to which these products are put, and where and how these products are traded. This book also explains how the derivatives markets are regulated (mainly from the perspective of English and EU law). The author further provides an introduction to the accounting and tax treatment of derivatives and to debt securities. The field of structured finance is becoming increasingly dependent on derivatives to complement debt capital market issues. The main theme of this book is risk, both the risk to which derivatives are designed to give an exposure and the risk to which any dealing in or selling of derivatives gives rise. This book explains how these risks are identified, quantified, controlled and ultimately exploited for reward. Derivatives: The Key Principles lays a firm foundation of a complex subject and the overall aim is to bridge the divide between the finance professional, who often regards a derivative as a cash flow, and the legal or regulatory professional, who regards a derivative as a contract. This book illustrates that derivatives can only be meaningfully considered from both viewpoints.