A Demon of Our Own Design

image Well, sometimes you come across a really interesting book and you just can’t help but put its picture on your blog.

Truth be told, I have not completed reading it yet… but … after the first 2-3 chapters of reading, it is really, really getting me engaged.  :P

BTW, pls do not try to read more on this article.. still consolidating my thoughts…

Book Contents

Chapter 1: The Paradox of Market Risks

 

Chapter 2: The Demons of ‘87

Portfolio Insurance 

A strategy of hedging a stock portfolio against market risk by selling stock index futures short or buying stock index put options.

Hmmm.. but how does futures work?

Chapter 3: A New Sheriff in Town

In the early stages, just having a seat on the desk was enough to assure profits, so getting in quickly was more important than getting things right

Each new market reaped a few years of huge profitability before competitive forces drove the spreads down and a new market rose up to become the envy of every freshly minted MBA trainee.

Robert Citron had been structuring trades with the help of friends at Merill Ynch to borrow on the short end of the yield curve to finance positions in the usually higher-yielding intermediate-term rates

What ia a yield curve?  Darn.. learned before but totally forgot…

Index-amortizing swap.

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