a worthy purchase, 9. Juli 2007

I really came to like this book. I've been longing to find one on the subject for a while now. The book is truly comperehensive, well-structured, providing a good insight into the major concepts of the derivates world. This is the kind of book you can always get back to in order to revise certain things etc.

      Viel Wie, wenig Warum., 23. März 2005

Das Buch ist zu oberflächlich, verwendet unintuive Bezeichnungen, geht anstatt auf wichtige Zusammenhänge auf unnütze Spezialfälle oder Fakten ein. Generell wird mehr Wert auf das "Wie mach ich das?" anstatt "Wieso mach ich das?" gelegt.

Es präsentiert viele Formeln ohne auch nur den Ansatz einer Erklärung zu unternehmen. Beim Raten eines Zusammenhangs wird der Leser allein gelassen.

Für Einsteiger nicht geeignet. Für Experten beginnt es viel zu weit bei Adam und Eva. Der Autor hat sich in meinen Augen zu viel vorgenommen und so ein Buch geschaffen, das für weniger als für mehr Leute nützlich ist.

      This bible contains errors, 21. Dezember 2003

Since this book is regarded as the bible of derivatives (it was also my first introduction) I will leave it to others to praise it and concentrate instead on what's wrong with it. First and foremost, one cannot learn how correctly to formulate solutions to stochastic differential equations from this text: eqns. (10.7,8), e.g., are not correct for arbitrary returns but are valid only as approxmations for small returns (Hull leads the reader to believe the opposite). The problem is that Ito's lemma is only stated, not proven, and it's the proof that shows one how to formulate correctly the stochastic integral equations that Hull calls 'stochastic difference equations'. When volatility depends on returns and/or time, then the errors made from following Hull's oversimplified treatment become serious.

My first impression of Baxter & Rennie's 'Financial Calculus' was that it was unnecessary and a waste of money. My opinion reversed completely after realizing (under prodding by a physics colleague who's an expert on sde's) how badly Hull's approach to sde's really is. Also, the systematic derivation of Black-Scholes from the assumption of a replicating, self-financing strategy in B&R is very nice. As Feynman said, we don't really understand a result until we can derive it from many different viewpoints. The method is not really different in principle from the standard short derivation given in Hull, but it does provide a nice, clear example of what is meant by replication and self-financing in the terminology of Brownian motion/sde's. See my new book Dynamics of Markets (Cambridge, 2004) for the right approach to market dynamics

       Classic and Comprehensive, 16. Februar 2003

This is the most comprehensive derivatives book on the market. Hull does an excellent job with problems sets and answers to test ones understanding or to review concepts. It is light in only one area, the exploding new products in credit derivatives.

I also highly recommend: "Credit Derivatives" 2nd Edition by Janet von Hebenstreit Tavakoli.

       The classic on derivatives., 1. August 2000

This book has been the standard text for mathematicians, physicists, and engineers retooling for Wall Street. I agree with the praise of other reviewers - especially 'a reader' on September 20, 1996. This book is still a gem. For a full PDE approach I recommend "Option Pricing: Mathematical Models and Computations" by Wilmott, Dewynne, and Howison. For a good probability theory approach, I recommend "Financial Calculus" by Baxter and Rennie. One reservation on Hull's book - it will be difficult for many readers with economic/finance/MBA backgrounds not completely fluent in calculus.