The global oil market is no longer solely influenced by the supply and demand of physical oil barrels. In today's landscape, financial barrels traded by hedge funds using quantitative algorithms and dealers managing large portfolios of oil derivatives are equally crucial in determining the price of oil. This book offers a fascinating insight into the world of oil derivatives, exploring the quantitative models and trading strategies used by professional market participants. With a focus on oil options and volatility trading, the reader is taken on a journey through the story of this market, narrated by one of its pioneers who managed a highly successful trading business for almost a quarter of a century. Bridging the fields of energy economics and mathematical finance, this book demonstrates how the science of trading can unearth unique opportunities in the oil market. Written for aspiring quantitative traders and academic researchers alike, it offers a rare glimpse into the opaque and secretive world of oil derivatives, showcasing how it operates in practice.

Dr. Ilia Bouchouev is the former President of Koch Global Partners, where he managed global derivatives trading business for over 20 years. Over the years, he introduced several energy derivatives products and was recognized as one of the leading experts in quantitative energy trading. He is currently managing partner at Pentathlon Investments and adjunct Professor at New York University where he teaches energy trading at Courant Institute of Mathematical Sciences. He has Ph.D. in Applied Mathematics.