Includes bibliographical references and indexes.

Introduction -- Mechanics of futures markets -- Hedging strategies using futures -- Interest rates -- Determination of forward and futures prices -- Interest rate futures -- Swaps -- Securitization and the credit crisis of 2007 -- OIS discounting, credit issues, and funding costs -- Mechanics of options markets -- Properties of stock options -- Trading strategies involving options -- Binomial trees -- Wiener processes and Itô's lemma -- The Black-Scholes-Merton model -- Employee stock options -- Options on stock indices and currencies -- Futures options -- The Greek letters -- Volatility smiles -- Basic numerical procedures -- Value at risk - Extimating volatilities and correlations -- Credit risk -- Credit derivatives -- Exotic options -- More on models and numerical procedures -- Martingales and measures -- Interest rate derivatives: the standard market models -- Convexity, timing, and quanto adjustments -- Interest rate derivatives: models of the short rate -- HJM, LMM, and multiple zero curves -- Swaps revisited -- Energy and commodity derivatives -- Real options -- Derivatives mishaps and what we can learn from them.