Table of contents Preface Part 1. Elements of option theory 1. Fundamentals 2. Option basics 3. Stock price distribution 4. Principles of option pricing 5. The back scholes model 6. American options Part 2. Numerical methods 7. The binomial model 8. Numerical solutions of the black scholes equation 9. Variable volatility 10. Monte Carlo Part 3. Applications: Exotic options 11. Simple exotics 12. Two asset options 13. Currency translated options 14. Options on one asset at two points in time 15. Barriers: Simple European options 16. Barriers: Advanced options 17. Asian options 18. Passport options Part 4. Stochastic theoty 19. Arbitrage 20. Discrete time models 21. Brownian motion 22. Transition to continuous time 23. Stochastic calculus 24. Equivalent measures 25. Axiomatic option theory Mathematical appendix Bibliography and references Index