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Risk Management in Trading: Techniques to Drive Profitability of Hedge Funds and Trading Desks

Risk Management in Trading: Techniques to Drive Profitability of Hedge Funds and Trading Desks

Davis Edwards

ISBN: 978-1-118-76858-7

Jun 2014

320 pages

In Stock

$85.00

Description

A 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 decision that should be strongly scrutinized. He also explains that being familiar with all the details of a transaction is vital for making the right investment decision.

  • Offers a comprehensive resource for understanding financial risk management
  • Includes an overview of the techniques and tools professionals use to control risk
  • Shows how to transfer risk to maximize results
  • Written by Davis W. Edwards, a senior manager in Deloitte's Energy Derivatives Pricing Center

Risk Management in Trading gives investors a hands-on guide to the strategies and techniques professionals rely on to minimize risk and maximize profits.

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