The handbook of equity derivatives

–from the Foreword by Fischer Black,

Cocreator of the Black-Scholes Model

Never before has there been so much interest in equity derivatives–or so much innovation in structuring these products. As new forms of instruments proliferate, their complexity has grown as well. Even equity derivatives professionals are unlikely to know all the details about every existing structure. With equity derivatives comprising one of the most important components of the capital markets, it’s more crucial than ever for every financial professional, specialist and nonspecialist alike, to understand how derivative instruments behave, how they’re structured, and how to use them profitably.

Edited by leading thinkers in the field, The Handbook of Equity Derivatives, Revised Edition, assembles dozens of experts from universities and Wall Street to help the reader gain a practical grasp of the growing variety of financial instruments and how they work. Contributions from such respected authorities as Gary Gastineau, Mark Rubinstein,

J. Gregg Whittaker, and Fischer Black outline the full range of the equity derivatives market, from classic warrants, options, and futures to the new and innovative PERCs, equity swaps, and equity-linked bonds.

In nonmathematical language, the book provides a clear introduction to equity derivatives, including the fundamentals and history of options, basic equity structures, and pricing determinants, along with a historical perspective on their evolution. You’ll find thorough surveys of:

• The burgeoning field of synthetic structures–OTC options and exotics, equity swaps, SPINs, SIGNs, PENs, MITTs, and SuperShares
• U.S. and foreign derivatives traded on organized exchanges
• Issuer derivative structures, such as warrants, convertibles, PERCs, and unbundled stock units
• The unique tax, legal, accounting, and regulatory features of derivatives
• How to make the most profitable use of the many equity derivative products
• Why some financial instruments succeed–and others fail
• The future of the equity derivative market- place

Whether you’re a finance student becoming familiar with the field or a practicing professional seeking better ways to exploit the tremendous potential of equity derivatives for profit, The Handbook of Equity Derivatives, Revised Edition belongs on your bookshelf.

JACK CLARK FRANCIS is Professor of Economics and Finance at Bernard M. Baruch College in New York City and author of several well-known college textbooks. He previously served as a Federal Reserve economist and on the finance faculty of the University of Pennsylvania’s Wharton School.

WILLIAM W. TOY is a Vice President in the Equity Derivatives Department at Goldman, Sachs & Co. and a codeveloper of the Black-Derman-Toy interest rate options model. He holds a PhD in physics from MIT.

J. GREGG WHITTAKER is a Managing Director and the global head of Credit Derivatives for Chase Securities in New York City and a former senior vice president of S. G. Warburg, where he headed the Equity-Structured Products Division. He earned a PhD in economics from the University of Wisconsin.

"I heartily endorse The Handbook of Equity Derivatives . . . while the market is continuously inventing new instruments and discarding older ones, the clarity and straightforward nature of the handbook hints at a longevity that will make it useful for many years to come."

–Stephen A. Ross

Sterling Professor of Economics and Finance, MIT (on the first edition)

Contributors:

Anand Aithal

Fischer Black

Arnoud W. A. Boot

John C. Braddock

Barbara Dunn

Jack Clark Francis

Gary L. Gastineau

John D. Gatsos

Paul M. Gottlieb

Robert J. Granovsky

Emmett J. Harty

Joanne M. Hill

Michael S. Joseph

Joan Junkus

Janet Kim

Eric Kirzner

Edward D. Kleinbard

Jonathan Knight

Benjamin D. Krause

Timothy Lindberg

Louis I. Margolis

John F. Marshall

Thomas McManus

Todd T. Milbourn

Todd E. Petzel

Mark Rubinstein

Thomas A. Russo

Michael D. Ryan

Raaj Sah

Bernard Sucher

Anjan V. Thakor

William W. Toy

Navendu Vasavada

Marlisa Vinciguerra

Clifford J. Weber

Tim Weithers

J. Gregg Whittaker

R. P. Yuyuenyongwatan

Mark A. Zurack

The most relied-upon resource on equity derivative instruments, their structure, and diverse global markets– now extensively revised and updated

Once, equity derivatives were exotic instruments relegated to the hands of specialists. Today, they are among the institutional investor’s most popular tools for managing risk and uncovering new profit opportunities. Recognized for its authoritative contributors and its accessible, comprehensive coverage of the entire field, The Handbook of Equity Derivatives has become the standard reference on the subject for specialist and nonspecialist alike. Now, this essential resource has been carefully updated and revised to cover the most current innovations in these continually evolving investment vehicles, including:

• Comprehensive coverage of the all-important OTC market
• Basic equity structures and how they work
• Pricing determinants
• PERCs, SPIDERs, and WEBs
• The Black-Scholes model
• The best uses for and profit potential of new derivative products
• Key accounting, tax, and regulatory issues

Lucidly written and clearly organized, this book should be on the desk of every professional seeking greater financial choice and better opportunities to hedge, diversify, insure against disaster, or customize investment positions.