Sankarshan Basu: The Man Who Wrote Wall Street's Derivatives Bible

Sankarshan Basu is Professor of Finance and Accounting at the Indian Institute of Management Bangalore (IIMB). He has held senior academic leadership roles at IIMB and served as Dean at Amrut Mody School of Management, Ahmedabad University, with extensive international teaching experience across Europe and Asia. A former derivatives researcher at ICICI Treasury, he bridges academic rigor with market practice and is co-author with John C. Hull of the Indian version of a leading book on derivatives and financial markets.Here are the questions we covered during this session and their respective timestamps:6:46 — Arnav“For someone starting their quantitative finance journey in 2026, what are the three most fundamental mathematical concepts they absolutely must master before touching anything more advanced?”12:56 — Vincent“How do you see that now with these new models, with AI being used in the markets?”20:18 — Nihar“Based on your teaching experience, what’s the biggest misconception that students have about option pricing when they first encounter the Black–Scholes model?”23:25 — Vincent“Are these [Black–Scholes type models] still used in practice… with different assumptions?”27:13 — Arnav“In your experience training and working with professionals at banks, what basic concepts do even experienced traders frequently misunderstand, and what are the biggest differences between trading options in practice and in theory?”37:35 — Nihar“Why do retail derivative traders in India suffer catastrophically high loss rates — backtests look perfect, but live trading leads to losses?”43:07 — Nihar“How many of the 10% who make money are making money because of skill versus randomness/luck?”45:52 — Nihar“Where is still the edge for a retail trader to make money, given large firms trading with advanced algorithms and PhD-level talent?”48:29 — Nihar“From the perspective of SEBI recently introducing new F&O rules, how would this change the game for retail traders like us versus institutional players?”54:55 — Vincent“Is it better from a regulator’s perspective to completely take highly leveraged instruments out of the market, or is it better to inform people?”59:00 — Vincent“On very short time frames (day trading), is there still an edge to consistently make money?”1:01:19 — Arnav“Do you think SEBI’s new regulations would deter a lot of small retail participants?”1:03:52 — Nihar“On the Jane Street situation: SEBI accused them of artificially increasing expiry-date prices; Jane Street says it’s basic arbitrage — what’s your view?”1:08:16 — Nihar“With local stock exchanges shutting down and listings concentrated in BSE/NSE, how should we view this — especially for smaller local companies that want to list?”1:11:42 — Vincent“What are one or two key points a country needs — for both retail and institutional participants — to get better, more developed capital markets?”Mentioned during this episode:LinkedIn CEO at XTX Markets PostApplication of Time Series Analysis to Finance by Sankarshan BasuFooled by Randomness: The Hidden Role of Chance in Life and in the Markets, a book by Nassim Nicholas TalebSEBI UpdateSEBI New F&O RulesReuters Jane StreetWe also like to share with you some of our socials: Instagram LinkedIn X