Dynamic Hedging: Managing the Risk of Plain and Exotic Options

This book is dedicated to hedging the risks of standard and exotic options as an integral part of a broader risk management concept. There is no roadmap in this area, as very little has been written on the subject. The author aims to present traders and risk managers with a methodology that allows them to understand the complex concepts of constructed derivative instruments when managing complex positions, as well as to introduce them to the mysterious world of dynamic risk control. Part I of the book discusses market microstructure and products. Part II provides a basic understanding of the risk of vanilla options and the tools for measuring it. Part III contains descriptions of the risks of exotic options. Part IV presents quantitative tools for options analysis.