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

ISBN: 0273704745
ISBN 13: 9780273704744
By: Satyajit Das

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About this book

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, lies, cheating, deception or force. It is impossible to make the staggering amounts made in derivatives in good years honestly.Traders, Guns & Money is a wry and wickedly comic exposé of the culture, games, and pure deceptions played out every day in trading rooms around the world, usually with other people's money. Whether you move in the financial world yourself, know people who do, or have money invested in stocks, shares or derivatives, this is a fascinating read guaranteed to make you think.

Reader's Thoughts


Christ, that was hard work. It took me months to finish this book! This book was highly recommended but there must be better introductions to derivatives. The sentences make sense, but it ends there - pages, sections and chapters don't really hang together to form a narrative of any sort.I did learn something from this book, but imagine my hours could have better spent on something else.


Very complex, textbook-type descriptions of derivatives in the financial world. I read this following the completion of "The Trillion Dollar Meltdown". It's far too complex for someone (like me) who is not involved in the financial industry. Interesting stuff, however.


It's not as memorable as other books that use the "three nouns, one of which is 'guns'" structure for their titles. However, it's an enjoyably cynical introduction to the dangers of derivatives, which is prophetic since it was published in 2006. This features the best explanation of Black-Scholes that I've ever read, and it's in-text translations of bankerese are amazing.


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 background, but very much worth it.


I found the attempts to make the material more exciting (for example, the "known unknowns, unknown unknowns," etc. a la Donald Rumsfeld) distracting, and initially difficult to get past.But this book really explained a lot of what was going on in the world of derivatives, clearly and concisely (even has some simple diagrams to make it clearer).Great book, once you get into it.

Adam Bertram

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 disturbing number of grammatical errors, especially towards the latter half of the book. In the end, I was happy to be done with it.


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.

Rohit Nair

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 time. Of course, now we know what happened, this looks like the work of a genius. The book is genuinely funny, which is nothing short of a miracle considering the sheer amount of financial technicalities included in the book. If you're working in the financial sector, or plan to, read this book.


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 functioning of the world economy.


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 that, the second half rocks -- perhaps because I don't take any personal offense, not being involved in derivatives. It's a great insider's view of how and why derivatives evolved, with great and simple (and cynical) explanations of why various structures were created (generally, to evade taxes, get around trading regulations, and other ways to give investors more yield and earn banks more fees). The anecdotes and narrative read like a late-night drink confessional -- probably exaggerated but sounding true enough in essence, and deeply educational. As mentioned previously, it doesn't claim to be a rigorous, comprehensive risk management textbook (which Das has written) so it won't be that sort of educational if that's what you're looking for.But through anecdotes it gives a sharp sense of the culture of the people involved, something you could never find even in very good textbooks.


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.


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 dizzy at certain points and I like to consider myself a quick reader but it took me 2-3 hours to read the first 30 pages.I had to put this book down. Maybe one day after I graduate with an MBA from a business school I will be able to pick it up again, but until that happens this goes right back to the Queens Public Library after page 30!


Well having some interest in derivatives, I choose to read this book. So I picked up a copy n just started reading this book and as a first word, it has really captured by attention. The prologue is magnificently written and makes you want to read more. So far so good, will be updating as I read more.**a little advise for those who don't know what derivatives are, this book might not interest you**

Getout Ofmybookcorner

I thought this book was a little like learning Spanish while on a space hopper. While you did feel that you were taking things in, you couldn't help but think it jumped around too much, and the loss of cohesion made it more difficult to really digest some of the themes.Did we really needed to be reminded about the noodle company every five minutes? It just made me really hungry..


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 shrift he gave to the more human elements. Lewis can get you involved with the people – smart or naïve, honest or corrupt, successful or beaten to a pulp. You want to know what happens to them in the unfolding story. Your understanding is helped by the fact that whole messy business has been personalized. With Das, it’s more just a laundry list of the financial products and recycled press accounts of famous meltdowns. Whenever he does involve people, they’re either fictitious stick figures or categories of investment subspecies lumped together a little too conveniently into bins of disrepute. I’m sure he has a point when he says many of today’s financial instruments can postpone tax bills, shift risks to less savvy clients, and obfuscate product deliverables, but in my mind he overplayed his cynicism and lost credibility in the process. Not all M&A activity is cannibalism, not all derivatives were created to dupe someone, and not all people in the industry are crooked. He weakens his case when he implies as much.

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