Energy Derivatives: Oil, Gas, and Why They Are Different
Wilmott opens Chapter 72 with a confession: “I don’t believe much of what I’m writing, and by the end of the chapter I hope you’ll see why.” That is an unusual way to start a textbook chapter, but it captures something real about energy derivatives. The models are borrowed from other markets, the assumptions are shakier than usual, and the underlying commodities behave in ways that break standard financial theory. But you have to start somewhere.