It is sometimes hard to believe that the first edition of this book was only 330 pages and 13 chapters long! The book has grown and been adapted to keep up with the fast pace of change in derivatives markets. Like earlier editions, the book serves several markets. It is appropriate for graduate courses in business, economics, financial mathematics, and financial engineering. It can be used on advanced undergraduate courses when students have good quantitative skills. Also, many practitioners who are involved in derivatives markets find the book useful. We are delighted that half the purchasers of the book are analysts, traders, and other derivatives professionals.