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Better derivatives book

IlyaKEightSix

Joined
6/6/08
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I have a question...my coworker is letting me read her book Derivatives Markets by Ronald L. McDonald, 2nd edition, and I've already read through the first ten chapters of John C. Hull's Fundamentals of Futures and Options Markets 5th edition (as well as have done all of the quiz questions in each chapter).

Which book is the better read for someone quantitatively inclined as myself?
 
Neither. Both could be retitled "Derivatives for Dummies." They're meant for dim-witted MBA types. For a quantitatively oriented undergrad, something like Baxter and Rennie, or Neftci, or Shreve (or about a dozen others) would be more appropriate.

I prefer McDonald over Hull because 1) Hull is oversold, 2) Hull is exorbitantly expensive, 3) Hull has the heft of a phone directory, 4) McDonald's coverage of topics is more lucid, and 5) McDonald's problem sets are more carefully designed. But perhaps this is a question of taste, for which there's no accounting. Hull first came out in 1989 and has become the de facto default choice in MBA programs as well as some MFE programs. Sometimes I wonder whether instructors ever look at anything other than assigned books.
 
I agree with bigbadwolf,

Both could be retitled "Derivatives for Dummies."
Click to expand...

The way it is written and over-cited you could very well read this book:
<iframe src="http://rcm.amazon.com/e/cm?t=quantfinaneng-20&o=1&p=8&l=as1&asins=0470013222&fc1=000000&IS2=1&lt1=_blank&lc1=0000FF&bc1=FFFFFF&bg1=F7F7F7&f=ifr" style="width:120px;height:240px;" scrolling="no" marginwidth="0" marginheight="0" frameborder="0"></iframe>

I'd recommend some of this books:

<iframe src="http://rcm.amazon.com/e/cm?t=quantfinaneng-20&o=1&p=8&l=as1&asins=0125153945&fc1=000000&IS2=1&lt1=_blank&lc1=0000FF&bc1=FFFFFF&bg1=F7F7F7&f=ifr" style="width:120px;height:240px;" scrolling="no" marginwidth="0" marginheight="0" frameborder="0"></iframe> (Fundamental book about option pricing and FE by Salih Neftci)

<iframe src="http://rcm.amazon.com/e/cm?t=quantfinaneng-20&o=1&p=8&l=as1&asins=0898715733&fc1=000000&IS2=1&lt1=_blank&lc1=0000FF&bc1=FFFFFF&bg1=F7F7F7&f=ifr" style="width:120px;height:240px;" scrolling="no" marginwidth="0" marginheight="0" frameborder="0"></iframe> (Pretty technical and physical approach of option pricing and calibration models by Yves Achdou and Olivier Pironneau)

<iframe src="http://rcm.amazon.com/e/cm?t=quantfinaneng-20&o=1&p=8&l=as1&asins=0521497892&fc1=000000&IS2=1&lt1=_blank&lc1=0000FF&bc1=FFFFFF&bg1=F7F7F7&f=ifr" style="width:120px;height:240px;" scrolling="no" marginwidth="0" marginheight="0" frameborder="0"></iframe> (This book by Paul Wilmott is similar to the book by Hull, but it is rather mathematical than "Fundamentals of Futures and Options Markets".)
 
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