Preface
It is well known that foreign exchange is the world's largest financial market. What is less well known is that the market for currency options and other derivatives on foreign exchange is also massively large and still growing. Currency options are less visible than options on other financial instruments because they trade in the main in the private interbank market. Sadly, the field of foreign exchange is not popular with authors of technical business books. The attention that is given to foreign exchange pales in comparison to the vast outpouring of books on the bond and stock markets.
This book has been written for end-users of currency options, newcomers to the field of foreign exchange, and university students. I employ the real-world terminology of the foreign exchange market whenever possible so that readers can make a smooth transition from the text to actual market practice.
I use this book as the textbook for a course entitled “Foreign Exchange and Its Related Derivative Instruments” that I teach in the IEOR department of the Fu Foundation School of Engineering and Applied Science at Columbia University. I taught forerunners of this course (using the previous editions) at the Yale School of Management and University of Chicago's Booth School of Business. Students may be interested in a companion volume to this book that I edited for John Wiley & Sons. That book, Currency Derivatives, is a collection of scientific articles that have had an important impact on ...
