Two Words, One Answer.
derivative instruments
 Understanding Credit Derivatives and Related Instruments (Academic Press Advanced Finance) $82.95 I am a financial engineering graduate student with professional experience in corporate and structured finance. I first read this book before I knew anything about the subject and found it very accessible. This is not a technical introduction to credit derivatives, nor will it be particularly useful to quants (other than perhaps as a quick reference to a couple concepts), however this book does an admirable job of explaining and linking the world of CD practice with academic theory. For anyone who doesn't have a derivatives background, but is able to understand mid-level mathematical concepts, this book is very good. It is clear, concise and is a great place to start for an introduction to CD that is not overly pedantic and offers motivation for further inquiry into the area. If you are looking for a more technical and comprehensive book on credit modeling (which forms the basis of most CD valuation) then I recommend Jeff Bohn's "Active Credit Portfolio Management in Practice" which has in depth discussions about many of the issues in Bonfim's book as well as much more. Nonetheless, having read and purchased many books on CD this one is one of the best due to its brevity, concision and practical robustness.  Introduction to Derivative Financial Instruments: Bonds, Swaps, Options, and Hedging $89.95 Informative and well written but to get to the information I wanted, it was almost better to surf Wikipedia instead...  Derivative Instruments: A Guide to Theory and Practice (Quantitative Finance) $107.00 The authors concentrate on the practicalities of each class of derivative, so that readers can apply the techniques in practice. Product descriptions are supported by detailed spreadsheet models, illustrating the techniques employed, some which are available on the accompanying CD-ROM. This book is ideal reading for derivatives traders, salespersons, financial engineers, risk managers, and other professionals involved to any extent in the application and analysis of OTC derivatives. * Combines theory with valuation to provide overall coverage of the topic area * Provides worked examples and spreadsheet models on CD ROM to help readers understand derivative instruments and their uses * Covers all the latest developments in derivatives  Credit Derivatives: A Primer on Credit Risk, Modeling, and Instruments $79.99 This is easy to understand and more academic oriented book. For any body who wants to become master in the field of credit risk and credit derivatives, this book will act as a gateway. Modeling Credit risk using structural approach is explained in about 60 pages and it is very clear.CDO pricing is detailed with examples and shows how to price CDO with correlation using Monte Carlo simulation and Cholesky decomposition. However this book does not talk about ISDA documentation and from the trading point of view. The book "Credit Derivatives: Risk Management, Trading and Investing by Geoff Chaplin" focuses more from the point of view of trading and ISDA documentation. Reading Chaplin's book after Chacko's book will take the reader into next step. For the professional who want to become expert in modeling, the must read is "Credit Derivatives Pricing Models: Model, Pricing and Implementation by Philipp J.Schnbucher". This requires lot of mathematical especially calculus and probability background and prior knowledge of Credit Risk and Credit Derivatives. I would recommend Chacko's, Chaplin's and Phillip's books in the order in order to become proficient in Credit Derivatives. Credit Derivatives: Risk Management, Trading and Investing (The Wiley Finance Series) Credit Derivatives Pricing Models: Model, Pricing and Implementation |
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