Description
Book SynopsisA comprehensive resource for understanding how to minimize risk and increase profits In this accessible resource, Wall Street trader and quantitative analyst Davis W. Edwards offers a definitive guide for nonprofessionals which describes the techniques and strategies seasoned traders use when making decisions. Risk Management in Trading includes an introduction to hedge fund and proprietary trading desks and offers an in-depth exploration on the topic of risk avoidance and acceptance. Throughout the book Edwards explores the finer points of financial risk management, shows how to decipher the jargon of professional risk-managers, and reveals how non-quantitative managers avoid risk management pitfalls.
Avoiding risk is a strategic decision and the author shows how to adopt a consistent framework for risk that compares one type of risk to another. Edwards also stresses the fact that any trading decision that isn''t based on the goal of maximizing profits is a de
Table of Contents
Preface ix
Chapter 1 Trading and Hedge Funds 1
Chapter 2 Financial Markets 33
Chapter 3 Financial Mathematics 61
Chapter 4 Backtesting and Trade Forensics 95
Chapter 5 Mark to Market 121
Chapter 6 Value-at-Risk 141
Chapter 7 Hedging 177
Chapter 8 Options, Greeks, and Non-Linear Risks 199
Chapter 9 Credit Value Adjustments (CVA) 237
Afterword 267
Answer Key 269
About the Author 299
Index 301
