Learn Financial Markets

Free articles from the author of Market Mechanics — covering derivatives, trade lifecycle, careers, and regulation. Each article is a starting point. The book goes further.

Financial Markets — Articles
Career and Roles
Breaking Into Financial Markets: Roles, Paths, and What Recruiters Look For
Financial markets offer roles across front office, middle office, and operations — each with different skills,...
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Career and Roles
Common Markets Interview Questions: What They Ask and How to Answer
Markets interviews test technical knowledge, commercial awareness, and composure under pressure. These are the...
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Front Office
What Does a Trader Do? Risk, Limits, and the P&L Mindset
A trader's job is to make markets, manage risk, and generate P&L — within defined limits and subject to multip...
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Career and Roles
A Day in Product Control: P&L, IPV, and the Control Mindset
Product Control is the independent function that calculates and explains the trading desk's P&L every day — a ...
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Career and Roles
A Day in Rates Sales: Relationships, Ideas, and Execution
A day in rates sales combines early market preparation, client conversations, trade idea pitching, and executi...
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Operations: Case Studies
The 2022 UK LDI Crisis: An Operations Case Study
The September 2022 gilt crisis exposed how pension fund LDI strategies, designed to reduce risk, became a sour...
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Operations
FX Settlement Risk, Herstatt Risk, and CLS: Solving the Oldest Problem in FX
FX settlement risk — the risk of paying one currency without receiving the other — was nearly eliminated by CL...
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Key Market Concepts
The CCP Default Waterfall: Who Bears Losses When a Clearing Member Fails
The CCP default waterfall defines the sequence in which financial resources are applied to cover losses when a...
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Finance, Risk and Regulation
Wrong-Way Risk: When Counterparty Credit Risk and Market Risk Collide
Wrong-way risk occurs when a counterparty's probability of default increases precisely when the bank has the l...
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Trade Lifecycle: Collateral
Initial Margin vs Variation Margin: The Critical Distinction
Initial margin covers potential future losses; variation margin settles today's mark-to-market change. They se...
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The Big Picture
How a Bank's Markets Business Really Works: The Four Layers
The markets business is not just traders — it is four distinct functional layers working together to originate...
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Rates: Interest Rate Products
What Is an Interest Rate Swap? A Plain-English Explanation
An interest rate swap lets two parties exchange fixed and floating interest payments — the most widely used OT...
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Finance, Risk and Regulation
CVA and XVA Explained: Pricing the True Cost of a Derivatives Trade
CVA, DVA, FVA, KVA — the XVA framework adjusts derivatives pricing to reflect the real-world costs of counterp...
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Historical Events
The 2008 Global Financial Crisis: What Went Wrong and What Changed
The 2008 GFC was not a single event but a cascading failure of mortgage origination standards, securitisation ...
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Key Market Concepts
Repo and Securities Finance: The Plumbing of the Financial System
Repo is the mechanism by which banks fund their securities holdings on a short-term basis — without it, the en...
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