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Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives

3.81  ·  Rating Details  ·  1,104 Ratings  ·  80 Reviews
Warren Buffett once memorably described derivatives as "financial weapons of mass destruction". Read this sensational and controversial account of the often dazzling business of derivatives trading, and see if you agree.

No money is ever really made in financial markets. Markets merely transfer wealth. As to how to make money? Well, it is basically theft, misrepresentation,
Paperback, 334 pages
Published May 15th 2006 by FT Press (first published April 20th 2006)
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Barbarians at the Gate by Bryan BurroughLiar's Poker by Michael LewisWhen Genius Failed by Roger LowensteinToo Big to Fail by Andrew Ross SorkinThe Big Short by Michael Lewis
Business History
15th out of 134 books — 67 voters
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Best Economics Books
70th out of 225 books — 315 voters

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Community Reviews

(showing 1-30 of 2,695)
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Sep 28, 2011 Steve rated it liked it  ·  review of another edition
All but a few financial storytellers fall short in comparison with Michael Lewis. Satyajit Dasis is no exception. Like the others who failed, he was not Lewis-like enough to carry the narrative. On the plus side, I give Das credit for his clear explanations of the many derivative products that are out there today. Let’s award points, too, for his title, even though the book couldn’t quite live up to the humor it was meant to project. As for the shortcomings, the worst, I thought, was the short s ...more
Oct 14, 2011 Lobstergirl rated it liked it
Recommended to Lobstergirl by: Urilla Sutherland
Shelves: business-finance
Das, a derivatives and risk expert, takes a very snarky look at these complex products that exploded the financial world in 2008 (though he is writing in 2006). Few people understand them, but whenever investors are flush with cash, money has to end up somewhere, and it's often seeking the highest return. The quants who create them may understand the equations, but not the real world consequences. The salespeople who sell them don't really understand them, and the buyers - in a system ruled by a ...more
Bernard Chen
Jan 13, 2009 Bernard Chen rated it it was amazing
After reading this book, I learned how one of my annuities manages to guarantee the lesser of 6% per year or the actual market growth of my investments. (Zero coupon bond worth 106%, call option on my portfolio purchases, they keep a percentage for themselves.) I also learned that I was a sucker for buying into this annuity - except that I was lucky and did it a year before the market drop of 2008. Now if I can just get my 106% out...

I was a big fan of Frank Portnoy's Fiasco and this is the geek
Jul 18, 2011 Themistocles rated it it was ok
Definitely not one of the better books on the subject. There are two major faults with this one:

First, the writing is all over the place, with the author jumping hither and thither every other paragraph, with almost no cohesion.

Second, there are a great deal of technical bits that are not explained well at all, and some times they don't even need to be that technical.

Some interesting anecdotes and case studies, all marred by these downsides.
Oct 14, 2008 Bradley rated it really liked it
This book gets very technical and it is obvious that the author adapted his style to be similar to Nassim Taleb. If you can put up with it, Das gets into several very good explanations about the many types of derivatives used to bend tax-laws, redirect risk, and confuse investors.
Oct 28, 2013 Radhika rated it liked it
A humorous account of the post crisis financial institutions. While the key concepts around derivatives i.e. weapons of mass destruction are explained without use of jargon, it get repetitive and tedious towards the later chapters.
Oct 27, 2009 Matthew rated it liked it
Shelves: markets
I take back what I said earlier, which is that Traders, Guns and Money is rather disappointing for such a critically acclaimed book.

I still stand by what I said about the book's tone -- from the punchy three-word title you could recognise it for the way it reads, sort of a stand up comic routine on the derivative markets. The first half wasn't especially compelling, as the castigation of financial professionals is so generalised. You have to be offensive to be funny, I guess.

Once you get past
Rohit Nair
Oct 27, 2012 Rohit Nair rated it really liked it  ·  review of another edition
Let me put it like this: TG&M is 'Liar's Poker' for the financial industry. Technicalities were never this much fun. Satyajit Das reveals the shenanigans behind the murky world of high finance and gives us a good laugh at the same time. What makes this book even better is that the first edition came out in 2006, just before the world went into hell. Everything was hunky-dory at the time and this book shows us, in retrospect, it wasn't. Wonder how many people even considered this book at the ...more
Jan 28, 2016 Rdt rated it liked it
I did learn a few things about derivatives from this book. For example, I had not previously realized how mark to market accounting can be used to inflate profits and traders' bonuses and can lead to margin calls on illiquid top level CDO tranches when the failure of lower tranches causes a ratings downgrade in upper level tranches that would probably actually pay full value if held to maturity, so even if the models were right in predicting tiny risks of default, the accounting rules helped to ...more
Mark Ruzomberka
Jun 07, 2015 Mark Ruzomberka rated it liked it
A long walk for a medium sized drink that gets warm by the end. This is no Michael Lewis book, which is what I thing most readers desperately want it to be. The reader will be challenged which is good and bad. I have to admit this was one of the hardest books I've ever read as the material is pretty thick. The depth of the subject covered in this book not for a casual audience. I probably now know more than I'll ever want to about derivatives, and more than I probably should about the internal d ...more
Oct 05, 2011 Stephany rated it really liked it
I picked this up from the library after hearing Satyajit Das on Planet Money. It was so refreshing to hear someone who has worked in derivatives trading since literally my birth (March 1977) say that there's no way to make money in it without theft and deception. Das's book is now seen as somewhat prophetic, apparently, as it was published in 2006 right before the economy went to hell. Looking forward to yet another expose of what is outright crime in financial markets.
Feb 11, 2014 Royston rated it really liked it
Despite what some reviewers say about the book bringing derivatives to the masses and making the understanding of them easier, it is still better to have some experience with them through working or studying derivative courses previously to be more appreciative of Satyajit Das' writing. This is in no fault Das' but rather the complicated nature of derivatives. It's actually not an easy topic to write about but Das does this with finesse, ease and candour.

It gets a wee bit complicated and maybe
Jay Roberts
Mar 01, 2016 Jay Roberts rated it it was amazing
And you thought a book on derivatives and option trading would be boring. WRONG! How can wiping out the global economy ever be boring? Oh sure, Option Trading is a wonky subject, and I’ve read many a dry book on the subject, but this one breaks the mold. It really does help you understand the mechanics of the derivative world as well as show you real world applications in a hilarious manner. Well, hilarious if you weren’t the one losing all your money in the deal. Or if somehow you weren’t part ...more
Argin Gerigorian
Jun 06, 2013 Argin Gerigorian rated it liked it
Shelves: business
Firstly, I hope I’m spelling “Tolle Lege” correctly. Haven’t bothered to check.

Anyways this week’s book comes from Satyajit Das entitled “Traders, Guns and Money…”. This book mainly deals with the knowns and unknowns of financial derivatives. What’s that? I’m glad you asked!

Financial derivatives are an instrument (like a contact) which derive their value from another thing. Confused? Me too.

About a year ago I was introduced to a man named Kyle Bass who is a hedge fund owner (Hayman Capital) and
Jamie Rodrigues
Aug 31, 2013 Jamie Rodrigues rated it liked it
Overall this book wasn't too bad. Was probably a fairly accurate assessment of what it was like working on a sell-side trading floor, however things have changed somewhat as banks de-risk and shed some of their bad habits. I enjoyed reading about some of the various derivative structures that banks used to do, such as the inverse floater and the exotic currency stuff with the Japanese banks in the 1990s.

The downside to this book is that is has a lot of 'filler' topics that people who work in or
Eugenio Gomez-acebo
Detailed book on derivatives. Although it is an interesting read, it is so caustic in the generic description of the derivatives chaos that it quickly loses credibility. The author uses its experience to attack all bankers and financial institutions under all available lenses. Banking practices are joked about. Excesses, fraud and wrongdoing are not distinguished from serious, ethical work. It is hard to differentiate the joke from the reality.
Aug 18, 2015 Sepideh rated it liked it  ·  review of another edition
Shelves: financial
This book was a fictionalized story about high finance that was less entertaining than anything written by Michael Lewis, but Lewis sets the bar pretty high. It is about a trader who worked in the British banking system and his attempt to defend an Indonesian company that blew itself up with derivatives and leverage. The fake names (Nero and Neverfail) that he gives people are just a little too ridiculous.

Most of the math that he is trying to explain is excellent. Off-hand, the only numerical e
Jul 04, 2014 Faisal rated it liked it
Shelves: business
The book literally gave me the opportunity to get an insider's look into quantitative finance. At some point while reading, however, I felt The author sounded a bit delusional, especially when describing the people that ran exotic options and futures desks at big institutions and hedge funds. Overall, it's pretty much an average book. Expected better than this.
May 25, 2011 Philip rated it it was ok
I watched the documentary Inside Job about the 2008 Financial Crisis and by far the author of Trader's Guns & Money Satyajit Das was the most interesting participate by far.

I was looking forward to reading this book because of the great amount of incite that he brought within Inside Job.

Honestly I consider myself a very Financially Savvy person, I really understand and deal with a variety of "Financial Instruments" but this book went into far too much detail for someone like myself.

I felt d
Dec 21, 2014 Daanve rated it it was amazing
Read it in 2006, a serious aha erlebnis. System made no sense, as proven 2 years later. History of the Asian crisis was another aha moment. Living there then, a lot also made little financial sense. Impressive book. Very personal.
Byron Wright
Aug 01, 2011 Byron Wright rated it it was amazing
This book is a very cynical (yet I suspect highly accurate) account of derivatives trading from a guy that's been there and done that. You do not need to be a financial geek to appreciate this book. It is written in a very entertaining way. For those that are interested you can expend some mental effort and get a basic understanding of derivatives, but you can ignore the details and still enjoy the story. The chapter on credit derivatives is particulary entertaining given the recent meltdown.

Adam Bertram
Nov 07, 2009 Adam Bertram rated it it was ok
An enlightening read from an intellectual aspect...the author does an admirable job translating the obscure, and often obtuse, world of financial derivatives into layman's terms. Although I found some of the characters is this book to be charming, I kept waiting for more. The lack of a solution, or attempt to rationalize the issues presented by this book, left me wanting more. I don't recommend this book for anyone who is not fascinated by trading and the financial markets. There were a disturbi ...more
Jan 18, 2014 Remo rated it it was amazing
Grandioso libro en el que un trader de volatilidad de tipos cuenta un montón de historias interesantes sobre el negocio, mezcladas con divertidas opiniones y en general repartiendo estopa a todo lo que se menea. Un compañero a quien se lo presté me dijo que era "demasiado real". Un grandísimo libro.
Jul 06, 2010 Trans01mission10 rated it really liked it
After reading a book that makes me feel like an idiot for 1) what I don’t know, and 2) the assumptions I regularly make while speaking, I will break down my sentences and thoughts to rather small building blocks.
-derivatives are hard.
-this book does a fantastic job at walking someone through the complexities of the financial oubliettes that have caved in subsurface, if you bring your own spelunking tools.
-it was a trial for me to get through since i really have no statistics or finance in my
Berk  Gurhan
Feb 16, 2015 Berk Gurhan rated it really liked it
Best book on finance that I have read
Apr 06, 2008 Chris rated it liked it
This book gives you a realistic picture of the lucrative world of derivatives trading, you know, the enigmatic 'financial stuff' wall street types do to make staggering amounts of money. I'm pro-capitalism mind you, but this rather cynical book paints a not-so-glamorous picture. Three stars just cause it was a bit dry and I thought longer than necessary. And perhaps a bit too cynical, I think there are at least a few positive things to say about the contributions derivatives make to the function ...more
Feb 25, 2009 Marie marked it as to-read
Traders, Guns & Money is very fresh history, just two years old. Das picks apart the new machinery of the mega-trillion-dollar derivatives market, the one economists say might be next to collapse on our heads. And I'm with him, I really am. The guy has a thing for ridiculous puns and also for pitiable characters. We meet a couple of noodle makers who wreck their company on a deal that no one but Das seems to understand, but by the end of this book, you'll get the deal, too. - Laura Conaway
Ken Nickerson
Jan 07, 2015 Ken Nickerson rated it really liked it
Some new information in here about trading that was from a direct, "hands-on" perspective that I was lacking. A quick read that's both informative and enjoyable.
Mar 30, 2013 Stuart rated it liked it
"Good reminder that derivatives, securitization, financial engineering, excess liquidity, leverage, lax regulation, compromised rating agencies, and culpable home buyers were key factors in triggering the financial meltdown in 2008. ABS, RMBS, CDO, CMO, CDS, SIV, mezzanine tranches, warehouse loans, risk transfer, etc. No matter how hungry investors are for yield, if you don't understand the product, don't buy it"
Dec 28, 2009 Amit rated it really liked it
Shelves: finance, trading
Provides a very comprehensive, tongue-in-cheek survey of the financial industry and thus provides a useful roadmap of where we have been and how we got here. Das' style tends to be a bit stocatto and the latter half of the book was a much slower read especially once Das gets into structured products. I wouldn't recommend this book to anyone who doesn't already have a decent grasp of derivatives.
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Satyajit Das is an international specialist in the area of financial derivatives, risk management, and capital markets. He works as a consultant to banks and other financial institutions in Europe, North America, Asia and Australia providing advice on trading, pricing and risk management of derivative transactions.

Das, as he likes to be called, is well known in Australia, Asia, South Africa and E
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“The truth is that banks are the last feudal kingdoms, their rulers omnipotent, divine warlords. Their key lieutenants are 'ronin' (wandering mercenary samurai) who roam financial markets ready to ally themselves to any warlord for a share of plunder. This is not the place to apply the latest management theory.” 4 likes
“Risk management seemed to have completed its transformation into pure entertainment. Dudley seemed the epitome of a risk manager who would drown crossing a river that was 12 inches in depth on average.” 2 likes
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