Includes bibliographical references and index.

Contents: Introduction -- Mechanics of future markets -- Hedging strategies using futures -- Interest rates -- Determination of foreward and future prices -- Interest rate futures -- Swaps -- Mechanics of options markets -- Properties of stock options -- Trading strategies involving options -- Binomial trees -- Wiener processes and lto's lemma -- The Black-scholes--merton model -- Options on stock indices, currencies and futures -- The Greek letters -- Volatility smiles -- Basic numerical procedures -- Value at risk -- Estimating volatilities and correlations -- Credit risk -- Credit derivatives -- Exotic options -- Weather, energy and insurance derivatives -- More on models and numerical procedures -- Martingales and measures -- Interest rate derivatives: the standard market models -- Convexity, timing and quanto adjustments -- Interest rate derivatives: models of the short rate -- HJM and LMM -- Swaps revisited -- Real options.