3 ms·

Is there any good resources to learn about derivatives, options, etc? The nomenclature of finance is extremely difficult to understand.

cturner 16y ago
They're reasonably straightforward concepts in themselves (I originally learnt shorting from the wiki page), but I struggled to make the jump to get a feel for them, to be able to build thoughts using them, rather than look on as an outsider. What Heinlein calls "to grok". Here's a puzzle in the spirit of building the series of logical gates by combining NAND gates. You could learn enough about the concepts using wikipedia. Consider a scenario: the government bans short-selling. Your task: find a way you could synthesise a short using just forwards. What are some practical considerations that might make it less practical to do this than pre-ban shorting? I find that when I understand how something emerged, I have a good feel for it. A lot of these concepts go back a long way - stock practices that developed through trading stock of the dutch east india company. For this reason, I'd recommend Niall Ferguson, _The Ascent of Money_. Das _Traders, Guns and Money_ is a good read. I couldn't follow all of it when I read it, but found it to be good for feel. There's a late 20th century writer John Kenneth Galbraith who wrote some good histories. I like _the end of uncertainty_ but it's hard to get. He wrote others that will be fine. It would probably be useful to read a book about Drexel Burnham Lambert, and how Milken developed their junk bond trades. I don't know of one, perhaps someone else can recommend. For broader economic picture stuff, I recommend Hazlitt _Economics in One Lesson_; Schiff _How an Economy Grows and Why It Crashes_; Soros, _The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means_.
- zandorg 16y ago
  The Predator's Ball and Den of Thieves for Milken & Drexel. Avoid Payback (about Milken) as it goes off on a stupid tangent.

cturner 16y ago

They're reasonably straightforward concepts in themselves (I originally learnt shorting from the wiki page), but I struggled to make the jump to get a feel for them, to be able to build thoughts using them, rather than look on as an outsider. What Heinlein calls "to grok". Here's a puzzle in the spirit of building the series of logical gates by combining NAND gates. You could learn enough about the concepts using wikipedia. Consider a scenario: the government bans short-selling. Your task: find a way you could synthesise a short using just forwards. What are some practical considerations that might make it less practical to do this than pre-ban shorting? I find that when I understand how something emerged, I have a good feel for it. A lot of these concepts go back a long way - stock practices that developed through trading stock of the dutch east india company. For this reason, I'd recommend Niall Ferguson, _The Ascent of Money_. Das _Traders, Guns and Money_ is a good read. I couldn't follow all of it when I read it, but found it to be good for feel. There's a late 20th century writer John Kenneth Galbraith who wrote some good histories. I like _the end of uncertainty_ but it's hard to get. He wrote others that will be fine. It would probably be useful to read a book about Drexel Burnham Lambert, and how Milken developed their junk bond trades. I don't know of one, perhaps someone else can recommend. For broader economic picture stuff, I recommend Hazlitt _Economics in One Lesson_; Schiff _How an Economy Grows and Why It Crashes_; Soros, _The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means_.

zandorg 16y ago
The Predator's Ball and Den of Thieves for Milken & Drexel. Avoid Payback (about Milken) as it goes off on a stupid tangent.