The recent financial crisis brought to light many of the misunderstandings and misuses of exotic derivatives. With market participants on both the buy and sell-side having been found guilty of not understanding the products they were dealing with, never before has there been a greater need for clarification and explanation. Exotic Options and Hybrids is a practical guide to structuring, pricing and hedging complex exotic options and hybrid derivatives that will serve readers through the recent crisis, the road to recovery, the next bull market and beyond. Written by experienced practitioners, it focuses on the three main parts of a derivative s life: the structuring of a product, its pricing and its hedging. Divided into four parts, the book covers a multitude of structures, encompassing many of the most up-to-date and promising products from exotic equity derivatives and structured notes to hybrid derivatives and dynamic strategies. Based on a realistic setting from the heart of the business, inside a derivatives operation, the practical and intuitive discussions of these aspects make these exotic concepts truly accessible. Adoptions of real trades are examined in detail, and all of the numerous examples are carefully selected so as to highlight interesting and significant aspects of the business. The introduction of payoff structures is accompanied by scenario analysis, diagrams and lifelike sample term sheets. Readers learn how to spot where the risks lie to pave the way for sound valuation and hedging of such products. There are also questions and accompanying discussions dispersed in the text, each exploited to illustrate one or more concepts from the context in which they are set. The applications, the strengths and the limitations of various models are highlighted, in relevance to the products and their risks, rather than the model implementations. Models are de-mystified in separately dedicated sections, but their implications are alluded to throughout the book in an intuitive and non-mathematical manner. By discussing exotic options and hybrids in a practical, non-mathematical and highly intuitive setting, this book will blast through the misunderstanding of exotic derivatives, enabling practitioners to fully understand and correctly structure, price and hedge theses products effectively, and stand strong as the only book in its class to make these exotic concepts truly accessible.

The recent financial crisis brought to light many of themisunderstandings and misuses of exotic derivatives. With marketparticipants on both the buy and sell-side having been found guiltyof not understanding the products they were dealing with, neverbefore has there been a greater need for clarification andexplanation.Exotic Options and Hybrids is a practical guide tostructuring, pricing and hedging complex exotic options and hybridderivatives that will serve readers through the recent crisis, theroad to recovery, the next bull market and beyond. Written byexperienced practitioners, it focuses on the three main parts of aderivative's life: the structuring of a product, its pricingand its hedging.Divided into four parts, the book covers a multitude ofstructures, encompassing many of the most up-to-date and promisingproducts from exotic equity derivatives and structured notes tohybrid derivatives and dynamic strategies. Based on a realisticsetting from the heart of the business, inside a derivativesoperation, the practical and intuitive discussions of these aspectsmake these exotic concepts truly accessible.Adoptions of real trades are examined in detail, and all of thenumerous examples are carefully selected so as to highlightinteresting and significant aspects of the business. Theintroduction of payoff structures is accompanied by scenarioanalysis, diagrams and lifelike sample term sheets. Readers learnhow to spot where the risks lie to pave the way for sound valuationand hedging of such products. There are also questions andaccompanying discussions dispersed in the text, each exploited toillustrate one or more concepts from the context in which they areset.The applications, the strengths and the limitations of variousmodels are highlighted, in relevance to the products and theirrisks, rather than the model implementations. Models arede-mystified in separately dedicated sections, but theirimplications are alluded to throughout the book in an intuitive andnon-mathematical manner.By discussing exotic options and hybrids in a practicalnon-mathematical and highly intuitive setting, this book will blastthrough the misunderstanding of exotic derivatives, enablingpractitioners to fully understand and correctly structure, priceand hedge theses products effectively, and stand strong as the onlybook in its class to make these "exotic" concepts trulyaccessible.