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Traders, Guns and Money December 13, 2006

Posted by newyorkscot in Books, Markets.
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I have just finished reading Traders, Guns and Money by Satyajit Das.  Thanks to Nick for the heads-up. The domain covered is derivatives in financial services and serves as a great educational and insightful brush across everything from structured products, swaps, options, hedge funds, credit derivatives, etc to life in trading rooms, quants, and the buy-side. Within these general areas Das provides clear and succinct descriptions of the products, how they are priced and sold, the ethics (or lack thereof of traders and salespeople), and how clients generally get taken for a ride.

What makes this a decent book to read is that it is highly anecdotal and packed with examples: in some cases well-known high profile examples in financial markets history (e.g. Long term Capital Management) are explained, and in others the identity of individuals is masked. I liked the general balance that he takes on looking at things from the buy and sell-side, — Das has a ton of experience on both sides — ,  but it is clear that Das is deliberately highlighting all the dodgy goings-on in dealing rooms in order to create some sensationalism.  I found that at certain times he is tagging on as many thoughts as possible to core topics, some of which seemed to be a little random and therefore it occassionally feels like a bit of a braindump.

If you don’t take all of this to heart, this is a great introduction to derivatives and their history, and an entertaining yet startling read. Enjoy.