Other
Recommended Readings
People interested in trading and financial markets often ask for suggestions about what to read. Here are some books or websites that we've found to be helpful and / or thought provoking.
- John Lothian's daily newsletter is an excellent source of information about the futures markets, with some coverage of securities topics. The newsletter is provided on a 'shareware' basis, i.e., voluntary payment. His newsletter won't tell you how or what to trade, but will provide insight into how the industry works, potentially an even more valuable lesson for anyone considering a career in the field. www.johnlothiannewsletter.com
- Options, Futures, and Other Derivatives by John C. Hull. This is a core introductory book about derivatives. The book explains how forwards and futures contracts are priced and then builds to option pricing and risk measures. Each chapter includes a list of suggested further readings as well as practice problems (get the related Solutions Book). The math used is appropriately complex for the topic and the target audience. This book contains a wealth (sorry) of information, and requires a strong effort to master, but doing so will give a solid base of knowledge derivative trading or risk management.
- My Life as a Quant by Emanuel Derman. After mastering Hull and his suggested readings you may be thinking about a career as a derivatives valuation expert (aka financial engineer, quantitative researcher, or "quant"). Like many Wall Street quants, Derman made the migration from physics to finance, and his personal story gives an interesting perspective on how quantitative researchers work in leading investment banks.
- When Genius Failed by Peter Lowenstein. The books have yet been written about the most recent financial market failures, but the rise of Long Term Capital Management (LTCM) is an earlier example of the rewards that can come when clever people leverage sophisticated trading strategies across multiple markets. The collapse offers additiona lessons, many of which are equally relevant now. The book may contain excessive 'who did what when' details for casual readers, but the causes of failure often are more complex than those of success and clues are in those details of who did (or didn't) do what.
- Joel on Software by Joel Spolsky. Technology long has been important for trading success, and with the transition to fully automated trading the need to manage technology on a daily basis arguably is as critical as the need to manage trading. We are convinced that the ability to integrate traders and technologists is a (the?) key to algorithmic trading results. This book gives the author's experienced-based perspective on the process of creating effective software. Some sections are written for developers (why string size matters), others address more general and fundamental issues (12 simple questions to tell if a software project is doomed).
Copyright © 2009 XO Capital Group, LLC