The book gives a comprehensive introduction to the modeling of financial derivatives, covering all major asset classes (equities, commodities, interest rates and foreign exchange) and stretching from Black and Scholes' lognormal modeling to current-day research on skew and smile models. The intended reader has a solid mathematical background and is a graduate/final-year undergraduate student specializing in Mathematical Finance, or works at a financial institution such as an investment bank or a hedge fund.

Derivatives Pricing Basics: Pricing by Replication

Static Replication
Dynamic Replication
Derivatives Modeling in Practice
Skew and Smile Techniques: Continuous Stochastic Processes
Local Volatility Models
Stochastic Volatility Models
Lévy Models
Exotic Derivatives: Path-Dependent Derivatives
High-Dimensional Derivatives
Asset Class Specific Modeling: - Equities
Commodities
Interest Rates
Foreign Exchange
Mathematical Preliminaries.