Chapter 1 What a Derivative Is and What It Isn't  3
Chapter 2 Binomials and Coin Tosses  31
Chapter 3 Pascal's Triangle and the Binomial Theorem  47
Chapter 4 Distributions Are the Key-What Are Distributions?  59
Chapter 5 Probabilities, Odds, and Payoffs  73
Chapter 6 Writing Our First Option  85
Chapter 7 Sectors, Strike Prices, and Summation Signs  97
Chapter 8 The Fair Price of an Option  109

Chapter 9 Our First Stock Option: IBM   119
Chapter 10 Statistics: The 15-Minute Cram Course  135
Chapter 11 Dow Jones versus Coin Tosses  145
Chapter 12 Turning Spot Prices into Forward Prices: S X eRr  159
Chapter 13 Skeleton for an Option Formula  181
Chapter 14 Getting Comfortable with the Black-Scholes Formula  195
Chapter 15 Introducing Volatility and SKIT-V  203
Chapter 16 Pros and Cons of the Black-Scholes Formula  209
Chapter 17 A Primer on Risk and Hedging  223

Chapter 18 Option Risk: Finding It and Hedging It  247
Chapter 19 How Traders Make Money (Customers)  273
Chapter 20 How to Convert Puts and Calls: CPL.PCS  289
Chapter 21 The Best Option Strategies  297
Chapter 22Market Insights and Edges  321
ANSWER KEY  339
INDEX 405