Stochastic Calculus for Finance I: The Binomial Asset Pricing Model (Springer Finance)

I went to Carnegie Mellon and met with Dr.Shreve multiple times (although I doubt he remembers me). This book was used as the guide for a course called discrete time finance. Book is great, Dr.Shreve is great. I sometimes read parts of this book when I want a little dose of isolated, pure and not overly complex quantitative finance. Its the book that keeps giving....Practically, however in real world of quantitative trading you almost never use these concepts.

Shreve's book is an excellent introduction to basic options pricing. He not only deals with plain vanilla options, but also shows how the binomial model can be used to to value exotic options. Each chapter has exercises which not only apply what is taught but force you to think and ensure that you really understand it.Little more than basic algebra is required to understand the text, making it very accessible. His expositions of topics such as martingales, markov processes, etc. are very good. The text can be dense, though--there's a great deal of information.In short, if you want an introduction of how options can be priced without the partial differential equations in the Black-Scholes model, this is an excellent choice.

I have the 1st version (pdf), so I hesitated before I make the purchase. Now it turns out that the book is worthy every buck.1. Use coin tossing space consistently as working sample. Very intuitive, never get the idea lost in abstract concepts.2. Detailed workout of examples. Very good for self study.3. Plenty of hands-on homeworks. Not necessarily very challenging. But provide good amount of extra examples.If anything the book can add, I hope it can supply implementations, in Matlab or C++. Well, it may be far stretching for a math book.

I used this book for my thesis in mathematic. My statistic prof said to read this book, in order to get some information about application of maths and statistic on finance (probability, a little bit of theory games, random walks,..).I found it great! Maybe too theoric. I think that this is a good book for those people who studies economics or finance.

It would be hard to overstate my enthusiasm for this text and its companion volume. In field that is too frequently represented by poorly thought out drafts rushed to market or by advanced mathematical treatments that are not easily understood by individuals more focused on practice, Shreve's texts stand out by being both rigorous and accessible with well thought out examples and exercises.This particular volume, covering binomial models, covers advanced concepts in a discrete setting. For some it will represent a waste of time and those individuals are best advised to skip to Volume II. However, many intelligent students who are not so comfortable with abstract mathematics will find this a simple and concrete exposition that can serve as a bridge to more advanced theory.

Great book. The examples are very easy to follow.

No typo. Good quality. The examples are good for the understanding

The second part has much more to tell. and although based on the first part, could be studied separately. The first part is still a decent foundation for interested readers.