We have spent a lot of time on vanilla calls and puts. But now Wilmott opens Part Two of the book, and things get interesting. Chapter 22 introduces exotic derivatives, contracts that keep quants employed and traders nervous.
Chapter 2 is where Wilmott introduces the main character of the book: options. Also known as derivatives or contingent claims. No heavy math here yet, just definitions, jargon, and some clever strategies people use to make (or lose) money.
I’m about to do something a bit ambitious. I’m going to retell the entire “Paul Wilmott on Quantitative Finance” - one of the biggest, most comprehensive textbooks on quantitative finance ever written. And I’m going to do it in plain English.