Saturday, August 19, 2017

On Dementia


There’s not an ounce of doubt about the crucial role of technology in providing a wide range of utilitarian health care solutions. In the context of dementia, more specifically Alzheimer’s, we now have a plethora of fit-for-purpose solutions to help our elderly cope with the emergent challenges of this largely progressive disorder - from assistive calendars, touch lamps, voice prompts to medication aids, remote monitoring systems and tracking devices to brain boosting apps and wireless brain implants. But this copious supply-side push, knowingly and unknowingly, has kept the process above the purpose.

Ahead of ground-breaking research, we need a common sense approach focused on care – more palliative than curative – to help patients restore their dignity, not just function. As much for a happy today as for a better tomorrow. This tight rope walk can’t be traversed at the cognitive level.

Life is inherently meaningless. The onus is on us to find and attach meaning to it. Since the medical curriculum is not designed to address the patient’s psychological needs, practitioners tend to suppress emotion in the focal attention to the scientific treatment. This is a cardinal error. When the patient weeps inconsolably, the whole emphasis should be to trace the root cause, not merely to administer a perfunctory dose guaranteeing a provisional calm.

We need to create purposeful awareness among relatives and care givers of dementia patients, to help them:

1. Raise the right questions rather than seek tailor-made answers,

2. Explode myriad myths and misconceptions surrounding the disease and last but not the least,

3. Break the shackles of cerebral communication to strike a chord with the patient.

This selfless effort is certainly not the proverbial magic pill, but it’s undoubtedly critical to put the rigmarole of medication in perspective.

Saturday, July 08, 2017

Don't let public transit make Chicago a Go or No Go




A wild Garlic named Chicagoua grew here in abundance once, which is believed to have given the windy city its legendary name. Probably the same onion genus species left its pungent taste in the form of Chicago's pathetic public transit system, easily one of the worst among world's premier cities. What a Greek tragedy for a metropolis of phenomenal skyscrapers and iconic museums, thriving on the banks of the soul-stirring Lake Michigan.

Mention the acronym CTA and most commoners would sweat profusely, cursing the mass transit operator of mass disruption and massive distress. Our sojourn here, during a whirlwind Midwestern tour, proved a nightmarish trailer of their day to day plight.

Fed up of the frequent bus bunching horrors, we preferred long walks to practically every destination. And the much-publicized Ventra card is everything a card should not be. To escape the torture of single-ride tickets priced higher than normal, scanner problems, rush hour traffic, rude staff and non-existent refunds, we shifted base from the bustling downtown Airbnb accommodation to a deserted Mount Prospect Hampton Inn. We found METRA trains and PACE buses more convenient and comfortable. Now, Mount prospect may not be the ideal base camp for someone like me who needed to be downtown every single day, and also given the lack of quality Indian restaurants in the region. Yet, the Metra did a fairly good to and fro job for us. Trains were almost on time, every time, and never overcrowded. We even enjoyed seated naps on occasions and the conductors were invariably friendly, so was the ticket counter staff at Mount Prospect station. Even the RTA PACE buses were our faithful wheeled friends for quick visits to Des Plains or Arlington Heights. The experience with the 606 (Rosemont CTA station to Mount Prospect) was not great though. And the connectivity is a big issue. A car ride from Mount Prospect to Naperville takes 45 minutes while the train would cover the same distance (read displacement) in two hours (Mount Prospect - OTC - Union Station - Naperville Station) Why can't they ply cost-effective buses for these routes? Beats us. Areas like Lemont Road in Homer Glen seem more remote than they actually are, thanks to the pathetic public transport options. Ditto for the Ernest Hemingway Foundation at Oak Park.

Given that Chicago holds a definitive edge over other US cities, thanks largely to its spiritual connect with Swami Vivekananda, the city authorities must strive to make life easier for commuters and tourists alike. We appeal to the Mayor of Chicago: please don't allow the public transit system reduce Chicago to a Go or No Go decision. We hope the Illinois budget deficit is not the root cause of Chicago's transport woes. We also hope Trump's federal spending cuts won't pose a new hurdle, given that much of what ails the system has little to do with money. It merits a mindset change which money cannot buy.

Notwithstanding its transport woes, we absolutely love Chicago downtown and suburbs. Hope things change for the better in 2018 during our next sojourn...I hope Chicago rises to the occasion for the sake of its awe-inspiring landmarks:

Like the Art Institute of Chicago, and the Fullerton hall where Swami Vivekananda delivered his historic 'Sisters and brothers of America'...

Like the architectural wonder Millennium Park, and the Anish Kapoor-created Bean besides the Jay Pritzker Pavilion, the Crown Fountain, and the Lurie Garden. (The Bean could do with some cleaning and wiping given the countless pairs of hands that dirty it on a daily basis)

Like its bustling Mag Mile, which rose like a Phoenix after the great fire of 1871, or the assortment of stores, retail chains, restaurants, commercial complexes and hotels in the vicinity...

Like the Sky Deck and its incredible history - its transition from Sears Tower to Wills Tower and the awesomely bundled tube design that greets wind and gravity with equal solidity...

Like the Oriental Museum with its Middle East antiquities, Mesopotamian exhibits and the Suq shop...

Like the Smart Museum of Art, brainchild of brother David & Alfred Smart, housing the Medicine Buddha, La Sainte Face, Cha Cha Couple and Burning House...

Like the Ed Paschke Art Centre and Memorial Way narrating the wonderful life and judiciously blended Howard Street Studio display. Borrowing Paschke's words for our plea: "Love it or hate it but don't be indifferent to it.”







Monday, June 26, 2017

Interesting memoir, Moving Au Revoir


Sudhir Raikar, IIFL | Mumbai | August 11, 2016 16:43 IST
Courtesy: http://www.indiainfoline.com/article/general-life-style-book-review/interesting-memoir-moving-au-revoir-116081100752_1.html

With his no holds barred memoir, former RBI Governor Dr. Duvvuri Subbarao has inadvertently unleashed a new literary genre, a thriller of a primer. Sudhir Raikar takes a closer look at the style and substance of his enduring work which ex-ICICI Bank chief KV Kamath aptly calls ‘unputdowntable’.




Media is abuzz with citing, interpreting and analyzing the seemingly contentious issues of 'Who Moved My Interest Rate?' conveniently ignoring the delightfully enduring aspects of the incisive memoir. Hardly a surprise that, given the typical fourth estate obsession with theatrical story-telling, thriving on sensationalism that, more often than not, is bereft of sense.

But the undeniable fact is, Dr. Subbarao’s tell-all book is an endearing primer for posterity that unfolds a rainbow of his emotions - while at the helm of the Reserve Bank of India (RBI) in what was a terrifyingly tumultuous tenure – including fear, anxiety, hope, surprise, shock, delight, contentment, lament and predicament. He provides the context to each conflict he faced which in turn tells us more about the man’s stoic character and his resolute mission – beginning with the 2008 global meltdown and his struggle to shield India from the unforeseen tremors of an intertwined financial world (but with little say to emerging market economies) and ending with the nasty rupee fall of 2013 which raised lethal questions on the lack of forex build up in the relatively happy years. Interspersed in between was the chronic fight against the government’s hardcoded stance on the age-old Growth vs. Price Stability debate where Dr. Subbarao was implicitly expected to toe the line, more so given his long, eventful stint on the ‘other side’.

Dr. Subbarao’s sincere account, among other things, brings to light the pathos of the Governor’s job where acknowledgment of short-term pay offs is ephemeral while the unforgiving evaluation of long-term consequences in the light of hindsight experience seems eternal.

The innovation that Dr. Subbarao has steered towards making the RBI federal in thought and action – free of hierarchies and confirmation biases – is a case study for both public and private sector players. Wish we had many more CEOs with Dr. Subbarao’s vision and values. The quality of corporate sector governance is as big a problem as are cyclical ups and downs and external shocks. And there's a lot to learn from the prudence and precision of Subbarao’s outreach programs towards making our social development initiatives fit for purpose.

Dr. Subbarao’s effort to free each concept of its intimidating jargon - more so for the novice reader - is evident across all chapters, which makes this book a treasure trove for students of economics and finance in particular. Every illumination has been made in simple language with a discerning desire to reach out to the common people who don’t have the time, inclination or intellect to decipher inflation numbers and interest rates – whether of the measure of financial integration, double-edged sword of globalization, supply-side triggers of inflation, perils of working with flawed data, myth of inflation targeting being opposed to growth, RBI’s unflinching transparency on government’s fiscal stance, the typical central bank quandary in striking a balance between the demands of the privileged, vocal industry fraternity and the mute voice of the common people yearning for lowering of prices, intricacies of monetary policy transmission and ensuing liquidity management through instruments like Open Market Operations, RBI’s lesser known roles and responsibilities including its social development agenda, domestic issues behind the currency slide beyond the taper tantrum trigger, challenge of exchange rate management and the attached Do something vs. Do nothing dilemma, tenets of financial inclusion or modus operandi of NBFCs.

Even readers who feel they have little to do with economics and finance will find the revelation absorbing, one that will evoke a powerful imagery of things you don’t expect from a mainstream book by a bureaucrat – capturing vivid details of the structure and layout of the Governor’s office and the timeless charm of his British-brand BHNS-maintained residential bungalow with ‘its wafting fresh air, cacophony of birds and heavy bunches of jackfruit’. Don’t miss his incisive interpretation of Jean Paul Sartre’s existentialist observation ‘Man is condemned to be free’ in the context of the question on what he would have done differently as the governor of the Reserve Bank.

In wonderful contrast to his profundity on philosophical issues is the ex-governor’s passion for adventure and recreation which is evident from the umpteen references throughout the 300-odd pages – whether his interest in 24-carat Bollywood products like Chennai Express and offbeat Prithvi Theatre plays, craving for Tardeo Maharashtrian eateries or penchant for inquisitive history tours around South Mumbai in ardent appreciation of the city’s emblematic blend of diverse architectural styles. And his wit, a recurring highlight of his insightful account, is superlative to say the least. Of course, it’s best read than cited.

The engaging anecdotes in the course of his pan-India journeys for outreach programs and financial inclusion initiatives are truly inspiring. Wish our branded activists take a cue from Dr. Subbarao’s freewheeling, ventilated approach to financial literacy. Thanks to the arid, bureaucratic mechanisms of conventional NGO bodies, proletariat activists and CSR practitioners across the globe, social responsibility, knowingly and unknowingly, has come to harbour several blatant assumptions about the larger cause of end-beneficiaries (often generically slotted as ‘target groups’ or ‘deprived’ communities) Conveniently overlooked in the process is the plain fact that their deprivation is only circumstantial and in no way indicative of the instinctive and intellectual capacities inherent within the community. Contrary to popular perception, the supply-side forces, in the mad rush to emancipate the downtrodden, are themselves found deprived when it comes to even reading the minds of the audience, leave alone identifying its needs. In peddling their jargon-heavy black and white prescriptions on financial prudence and general well being, they are knowingly and unknowingly oblivious of the expressions of playful amusement and suppressed yawns that the so-called ‘deprived’ reserve for the seemingly ‘privileged’ - - stemming more from doubt than disbelief.

As for those from the journalistic tribe who wished Dr. Subbarao was more alpha male during his tenure, he has shown the virtues of a public beta release in the form of his book that now allows anyone to download his thought process. How many governors would attempt such introspection for open dissection which also talks of what he felt he could have done differently – like the need to adjust the stated policy on foreign exchange and make it more specific with respect to defining and managing volatility and building self-insurance?

Dr. Subbarao’s submission of the ‘twinges of guilt at the thought of millions of Mumbai slum dwellers under leaky roofs for whom the rain meant the loss of daily earning, and hungry children’ is particularly moving, given that he candidly shares his helplessness rather than choosing to overlook the obvious in line with the implicit demands of his official stature, for such predicaments, protocol says, are deemed too poetic for certified comfort.

Given Dr. Subbarao’s conviction in sharing his no holds barred account, the real tribute to his effort won’t merely be the book’s critical acclaim; but some quality introspection by the powers-that-be as to how could the Government-Central Bank relationship be made more cohesive and solution-centric without diluting the sovereign fabric of the latter that we are all proud of.

Central bankers across the globe, we have seen time and again, are compelled to facilitate government access to near-free debt under the guise of fiscal spends. This ends up building a toxic cocoon for government debt issuance in the name of achieving growth targets. The haphazard lending that follows, eventually leads to systemic chaos in the form of rampant bank failures and consequent turmoil in bond and equity markets.

A healthy synergy between the Central Bank and the government should lead to more credible and sustainable solutions to various problems that stand in the way of India’s economic development. Prime among them is the NPA issue. It’s common knowledge that dealing with doubtful and distressed assets has always been the Achilles Heel of the banking sector. Barring a few players known for their stringent lending norms, most bankers try and downplay the whole issue through the usual philosophical sermon: That NPAs are an integral part of banking given the criticality of broad-based operations to profitability which exposes banks to all kinds of unavoidable factors like economic downturns and political upheavals. So, they claim, even the safest of loans can be rendered unproductive…

High time we stop hiding behind these lame excuses and collectively address some tough questions that make NPAs more elusive than what meets the eye. There’s no doubt that more RBI enactments would follow in the time to come. But unless we turn our attention to the fundamental questions surrounding NPAs, every RBI intervention will always seem more palliative than curative.

Hope the new wave ushers in an environment of proactive prudence that penalizes banks and auditors for suspect motives that serve as a green house for NPAs. This way, banks, ARCs and their regulators would be left to deal only with the genuine cases of NPAs. For the Indian banking sector, that would a big leap forward.

It’s high time we also demystified the glorious economic abbreviations that fuel a debate among practising economists and fiscal experts and yet mean little or nothing to the common man. Rather than board ceremonial flights of imagined realities consequent to the published data, our experts would do well to demand a governmental initiative to simplify the data for better public comprehension. Needless to say, caring for this precision and validation is the collective responsibility of the government and the private sector.

As Dr. Subbarao astutely reflected during his inaugural address at the July 2011 Statistics Day Conference: “The decisions that we in the Reserve Bank make have a profound impact on the macro economy, and errors can be costly. Our policy judgement should therefore be based not only on state of the art skills in data analysis and interpretation but also on an intellectual value system of ruthlessly honest validation and peer review.”

Saturday, June 24, 2017

The Celebral void on Marathi celluloid

There have been many a debate - staged and otherwise - on what "ails" the Marathi entertainment industry of today. In fact, such arguments are in themselves a mega industry, and a rewarding pastime for the few enterprising among Marathi minds.

In recent times, we have seen offbeat Marathi films surfacing with unfailing regularity but variety, as we have often seen, does not necessarily promise quality. Worse, intoxicated by their disproportionate success, some of the directors and lead players of such films have become demi gods. And ironically, the flood of "offers" leaves them with little time to explore sensitive themes, busy as they are settling for sensitized themes.

No wonder, despite a strikingly rich and insightful literature, Marathi cinema is still stuck with family sob stories and mindless comedies. This is indeed a collective failure - of film makers, writers, actors, viewers and of course the oh-so-powerful critics. While most of the Marathi film makers operate in a "compromise" mode to desperately design a hit film, our viewers are happy with only such relief that allows them the luxury of switched-off minds. On the other hand, our actors have a single-minded aspiration of making it big in Bollywood - after all, a half-scene with Shahrukh Khan makes one a global icon zillion times faster than a Marathi film that could at best fetch an award at a film fest.

The less said about the critics, the better. While the mechanical star system of the regional press - print and electronic included - is largely shallow and disgustingly objective, the "English" scribes covering Marathi entertainment are an elite community - overtly thrilled with their brazen authority and thoroughly convinced of their intellectual superiority. Now that leaves no room whatsoever for something called responsibility. No wonder, they have no qualms in resorting to plagiarism and borrowed wisdom, however subtle and camouflaged it turns out to be. In the sole excitement to showcase their intelligence, they invariably miss the film's soul. There's hardly any respect for the maker's perspective in the blatant endorsement of their perception.

And the theory of relativity in their heads is simplistic, not simple - the more sarcastic and bitter the condemnation gets, the more learned the critic becomes (read appears). Interestingly, when the same critics turn filmmakers, they merrily chew the same gums that they once loathed with such disdain. Yet, such is the mighty aura that aspiring film makers try to win their approvals, ahead of engaging viewers.

There's no acknowledgment whatsoever, from filmmakers and critics alike, of the pressing need to raise the bar in as many aspects as possible - whether choice of scripts, methods of acting or directorial styles. Like every other field, this industry badly needs the participation of thinking individuals across disciplines. If not co-creation, collaboration is easily feasible if the industry wakes up to it. For a vulnerable industry where the availability of funds defines the framework of creativity, nothing can be more heartening. Only if the industry opens up to the spirit of open source..

Talk of timeless creations and one thinks of directors like Raja Paranjpe, actors like Chandrakant Gokhale, writers like G D Madgulkar and music maestros like Sudhir Phadke. Not that their films were free of pet patterns and cliches, but their unquestionable sincerity, way ahead of brilliance, in furthering the cause of good cinema is still a coveted benchmark... only if we care to look back.

Thursday, June 22, 2017

Right Season, Wright Reason


Recalling a dated piece that has enough to keep it relevant in the wake of the Kohli-Kumble controversy...

John Wright’s Indian Summers may not be a pithy commentary on the technicalities of the game but has enough substance to remind the stakeholders of Indian cricket to revisit the age-old system that runs it, as early as they possibly can.

Indian Summers by John Wright



Sudhir Raikar recalls a forgotten gem in the wake of the Indian team’s disgrace in the recently concluded English tour. John Wright’s Indian Summers may not be a pithy commentary on the technicalities of the game but has enough substance to remind the stakeholders of Indian cricket to revisit the age-old system that runs it, as early as they possibly can.

Lurking in the dark recesses of our cricketing tradition are many glaring loopholes engineered and nourished by unseen architects that Wright hints at but never pin points. Call it grace or indecision, but Wright’s shielded words sure ring true for most of us despite the fact that they were largely dismissed by the fourth estate. The Indian media, as also many of the ex-players and managers, picked up all the potentially sensational elements in lashing out at this loner Kiwi while ignoring the sheer beauty of his verse and the apparent sincerity of his purpose. Of course, this ruthless attack should come as no surprise, given the ever-growing power of vested interests and the ever-falling standards of journalism in India.

John tells an engaging life story, right from the days when he called it quits as a player to suffer a short-lived accident with the corporate world. (“My job at Fletcher Challenge, then NZ’s largest building supplies company, was a crash course in everyday reality”)

The coaching stint at Kent paved the way for the prized job and the subject matter of the book - the Coach of the Indian cricket team. Cricketing legend Colin Cowdrey’s dying advice to Wright before the latter left for Indian shores indeed proved prophetic - a nip of whisky in the evenings to keep the bugs away and a SOS call to Raj Singh Dungarpur when in trouble. Only that Wright seems to have replaced whiskey with beer. There was of course no substitute for Dungarpur, as he found out throughout his India stint.

Wright seems to have been a lone crusader to inculcate a sense of professionalism among the players. Not that he failed completely but the players who were fed on a staple diet of tea or biscuits at net practice or taped fingers while fielding would have proved tough nuts to crack. And more than the playing eleven, his real detractors ran the very establishment, whether as tour managers, team selectors, board presidents or governing committee members. His most studied observation is on the selection process where he brings to light several startling practices that run deep in the name of process and convention. We always knew there was something seriously wrong with India’s team selection, but we never knew the culprits could be so brazen in peddling their vested interests.

Certain things are clear and explicit - like Wright’s fluent chemistry with physio Andrew Leipus, his soft corner for players like Kaif and Laxman (although the latter was allegedly axed at his behest for the World Cup), his professional interaction with Jagmohan Dalmiya, his genuine respect for Dravid, his awe for Tendulkar, his trust on Ravi Shastri as an advisor and of course - his love-hate relationship with Sourav Ganguly. (The media only found the last bit worthy of discussion)

He gives an amusing account of the advertising and sponsorship market that’s ever chasing players with star status. In the process, he makes some great observations - Like having to watch Ganguly struggling to ape John Travolta or Rahul Dravid in an uncharacteristic black matrix-style outfit or the fact that Javagal Srinath and Anil Kumble never became billboard heroes despite their success, thanks to their less glamorous image, compared to their counterparts. Tendukar’s engaging smile, of course, sends sponsors laughing all the way to the bank. Wright is honest to reveal a secret desire to pose in a TV ad himself but the offer that came his way was a show stopper - “advertising an ointment for old-age aliments at one-tenth of the going rate.”

Though of a poetic disposition, the verse he cites in the book is nothing special. He also does not come as a guy who would really put his foot down despite the repeated claims of “blowing my top”. He rather comes across as a soft guy who would make proactive adjustments to stay put. But more important, Wright is never harsh or prejudiced in pointing out the systemic flaws. “Many a times, things just fell in place, often without you understanding how and why.” His self-deprecating stance is worthy of both adulation and emulation.

The most striking part of his narrative, however, is his accurate sketch of the phenomenon called India - the blended fabric of culture and cricket in a deprived nation that unanimously regards the game as a religion, and the only one that binds people together. (“Indian cricket lovers are never in a state of emotional equilibrium - it’s either ecstasy or despair for them”)

Wright also peeps into the lives of ordinary Indians - like Pintu, the masseur, who supports a family of eight on a salary of Rs 8500/- per month, Prasanna Raman, the enthusiastic software engineer who later became the technical head of National Cricket Academy or the nameless cabbie from Bangalore who religiously handed back the tip of Rs 120/- to Wright as it had not been explicitly labelled as a tip during their first encounter.

Wright throws good light on the mockery that rules the Indian cricketing system - ripe with selection hazards, zonal mandates, blatant favouritism, ruthless axing, bureaucratic hang ups, administrative nuisance, advertising diktats, and rags to riches stories, evils of heady success or the miseries of forgotten heroes. The nuisance for Wright came from all quarters. “A guy with the biggest diamond ear-stud once came wandering into the viewing area as if it was his private box”. This was India’s biggest beer baron, no marks for guessing who we are talking about. Wright invariably found playground boundaries shortened and ‘roped’ to ensure a healthy shower of fours and sixes that rakes in the moolah for the value chain of advertisers, sponsors and broadcasters.

John Wright is a poet at heart. His humour, his idiom and his melancholy all prove arresting and above all, the ring of pathos in his tales and anecdotes is soul-stirring. Yes, he may not have been the best coach in the annals of the game (or a truly great player either) and his knowledge of technicalities could fall short of the Gary Kirsten benchmark, but his hold over the psychological aspects of the game is undoubtedly striking. More often than not, cricket coaching as we have seen it, is about boosting minds, not pushing bodies. The book lingers in memory but more as a fabulous book on India and its cricketing fanatics - a neat summary in the league of Mark Tully’s ‘No Full Stops in India’. If not the bigwigs at BCCI, the beleaguered Indian team led by M S Dhoni will find a handy guide in this book to reinstate conviction and commitment and get back to their winning ways.

Monday, June 19, 2017

NoSQL in perspective: Biz above Buzz, Needs above Names


Random notes from the seminal "NoSQL Distilled by Pramod J. Sadalage and Martin Fowler", aimed at enabling faster comprehension



Business needs of the Modern Enterprise

Real-time capture and analysis of big data – coming from multiple sources and formats and spread across multiple locations

Better customer engagements through personalization, content management and 360 degree views in a Smartphone era

Ability and agility in proactively responding to new markets and channels


Constraints of the RDBMS environment

Frequent database design & schema revisions in response to fast-changing data needs have serious application-wide ramifications as RDBMS is the point of business integration

Growing data storage needs call for more computing resources but RDBMS ‘scale up’ is prohibitively expensive

Clustering is an effective solution but cluster-aware Relational DBs can’t escape the ‘single point of failure’ trap in making all writes to an abundantly-available shared disk.

Sharding in RDBMS puts unsustainable loads on applications



NoSQL in perspective

Over time, enterprise with complex and concurrent data needs created tailored non-relational solutions specific to their respective business environments.

They are a natural fit for the clustering environment and fulfill the two principal needs of the modern enterprise, viz,

Cost-effective data storage ensuring fit-for-purpose resilience and several options for data consistency and distribution

Optimal and efficient database-application interactions


It would be appropriate to name this ever-expanding universe as NoSQL, which contrary to what the name implies, is ‘non-relational’ rather that ‘non-SQL’ since many RDBMS systems come with custom extensions. (NewSQL hybrid databases are likely to open new doors of possibilities)

Each data model of the NoSQL universe has a value prop that needs to be considered in the light of the given business case including the required querying type and data access patters. There’s nothing prescriptive about their adoption. And they are not a replacement for SQL, only smart alternatives.

NoSQL data models

A closer look at two common features:

Concept of Aggregates

Group all related data into ‘aggregates’ or collection of discrete data values (think rows in a RDBMS table)

Operations updating multiple fields within each aggregate are atomic, operations across aggregates generally don’t provide the same level of consistency

In column-oriented models, unit of aggregation is column-family, so updates to column-families for the same row may not be atomic

Graph-oriented models use aggregates differently – writes on a single node or edge are generally atomic, while some graph DBs support ACID transactions across nodes and edges


Materialized views

To enable data combinations and summarization, NoSQL DBs offer pre-computed and cached queries, which is their version of RDBMS materialized views for read-intensive data which can afford to be stale for a while. This can be done in two ways:


Overhead approach
Update materialized views when you update base data: so each entry will update history aggregates as well
Recommended when materialized view reads are more frequent than their writes, and hence views need to be as fresh as possible

This is best handled at application-end as it’s easier to ensure the dual updates – of base data and materialized views.

For updates with incremental map-reduce, providing the computation to the database works best which then executes it based on configured parameters.

Batch approach

Update materialized views in batches of regular intervals depending on how ‘stale’ your business can afford them to be



Domain-specific compromises on consistency to achieve:

a. High availability through Replication: Master-slave & peer-to-peer clusters

b. Scalability of performance through Sharding

In each case, the domain realities would matter than developmental possibilities –what level and form of compromise is acceptable in the given business case would help arrive at a fit for purpose solution.

Many NoSQL models offer a blended solution to ensure both High Availability and High Scalability - where sharding is replicated using either Master-slave or peer-to-peer methods.

Replication

Master-slave cluster:

Works best for read-intensive operations

Database copies are maintained on each server.

One server is appointed Master: all applications send write requests to Master which updates local copy. Only the requesting application is conveyed of the change which, at some point, is broadcast to slave servers by the Master.

At all times, all servers – master or slaves - respond to read requests to ensure high availability. Consistency is compromised as it is ‘eventually consistent’. Which means an application may see older version of data if the change has not be updated at its end at the time of the read.

Fail scenarios in Master-slave cluster and their possible mitigation:

Master fails: promote a slave as the new master. On recovery, original Master updates needful changes that the new Master conveys.

Slave fails: Read requests can be routed to any operational slave. On recovery, slave is updated with needful changes if any.

Network connecting Master and (one or more) Slaves fails: affected slaves are isolated and live with stale data till connectivity is restored. In the interim, applications accessing isolated slaves will see outdated versions of data.

Peer-to-peer cluster:

Works best for write-intensive operations.

All servers support read and write operations.

Write request can be made to any peer which saves changes locally and intimates them to requesting application. Other peers are subsequently updated.

This approach evenly spreads the load, but if two concurrent applications change the same data simultaneously at different servers, conflicts occur which have to be resolved through Quorums. If there’s a thin chance of two applications updating the same data at almost same times, a quorum rule can state that data values be returned as long as two servers in the cluster agree on it.

Sharding

Evenly partition data on separate databases, store each database on a separate server. If and when workload increases, add more servers and repartition data across new servers.

To make the most of sharding, data accessed together is ideally kept in the same shard. It’s hence recommended to proactively define aggregates and their relationships in a manner that enables effective sharding.

In case of global enterprises of widely-dispersed user locations, the choice of sites for hosting shards should be based on user proximity apart from most accessed data. Here again, aggregates should be designed in a manner that supports such geography-led partitioning.

Sharding largely comes in two flavors:

Non-sharing Shards that function like an autonomous databases and sharding logic is implemented at application-end.
Auto Shards where sharding logic is implemented at database-end.

Sharding doesn’t work well for graph-oriented data models due to the intricately connected nodes and edges which make partitioning a huge challenge.

Ways to improve ‘eventual consistency’ : Quorums Versioning

Read and Write Quorums

Quorums help consistency by establishing read and write quorums amongst servers in a cluster. In case of reads, data values stored by the read quorum are returned. In case of writes, it is approved by a write quorum of servers in the cluster.

Applications read and write data with no knowledge of quorum arrangements which happen in the background.

The number of servers in a quorum – read or write – have a direct bearing on database performance and application latency. More the number of servers, more the time for read and write quorum approvals.


Version Stamps

Consistency problems can arise in Relational and Non-relational despite ACIDity or quorum rules. A case in point is a lost updates from concurrent access of the same data where one modification overwrites the changes made by other. In business cases which can’t afford pessimistic locking, version stamps are a way out:

An application reading a data item also retrieves version information. While updating, it re-reads version info, if it’s unchanged , it saves modified data to the database with the new version info. If not, it retrieves the latest value probably changed by another application and proceeds to re-read version stamp before modifying data.

In the time between re-reading the version info and changing values, an update can still be lost from a change made by another application. To prevent this, data can be locked in the given time frame in the hope that it will be miniscule.

Few NoSQL models like column-oriented DBS enable storing of multiple versions of the same data in an ag­gregate along with version timestamp. As and when needed, an application can consult the history to determine the latest modification.

When synchronicity between servers in a cluster is in question due to network constraints, vector clocks are seen as a way out. Each server in the cluster maintain a count of updates enforced by it, which other servers can refer to thereby avoiding conflicts.

What ‘schema-less’ actually means?

Onus shifts to Application-side

In NoSQL databases, data structures and aggregates are created by applications. If the application is unable to parse data from the database, a schema-mismatch is certain. Only that it would be encountered at application-end.

So contrary to popular perception, the schema of the data needs to be considered for refactoring applications.

That applications have the freedom to modify data structures does not condone the need for a disciplined approach. Any unscrupulous changes in structure can invite undesirable situations: they can complicate data access logic and even end up with a lot of non-uniform data in the database.

Sunday, May 28, 2017

Operation Theatre: The Life and Times of Dr. Subhash Munje


Reproducing this dated piece on the request of a few close friends. Hemant, Sai and Akhilesh - this one's for you:


Dr. Subhash Munje, renowned surgeon and stanch humanitarian, firmly believed in sharing his life stories to the tee. Insight or indecision, accomplishment or astonishment, delight or disappointment; he was keen to lay open his mixed bag of experiences for public dissection. A film on his life will go a long way in restoring the credibility of the medical profession in the guiding light of Dr. Munje’s example.

Dr. Munje’s memoir “Behind the Mask”, an honest and humorous account of his umpteen surgical trials and triumphs in the course of his momentous but largely unsung career – a great window into the mind of a sensitive surgeon who breathes the patient’s sigh of relief every time his treatment works and feels deeply wounded each time he falls short.

Dr. Munje narrates such diverse tales – real-life stories of human courage and conviction, frailties and failures, insecurities and inhibitions – that both enrich and endanger the medical profession in copious ways.

Dr. Munje began his career at age 26, as the youngest civil surgeon of Alibaug near Mumbai. This place in the 60-70 decade was bereft of electricity to safeguard the world’s purest magnetic observatory situated in this sleepy beach town. Unfortunately, the global distinction came at the cost of the general public welfare and community development as the town was left groping in the dark while most of its neighboring regions basked in the glory of lights.

So, Dr. Munje had to operate aided by his hunting light in a deprived district hospital equipped with 12 beds and only two medical officers. Needless to say, he played multiple roles in catering to diverse situations – surgeon, physician, obstetrician, gynecologist, pediatrician, ophthalmologist and even psychiatrist. Had Dr. Munje been in the US, his chronicles would have traveled far and wide as glittering case studies of innovation amidst abject deprivation but here he was in far-flung Alibaug, far-away from the mainstream, oblivious from the glamour of sprawling labs and spacious hospitals and yet, neck deep in the flowing stream of every-day strife that he took by its horns. His manifold trials and tribulations would make the best of surgeons gasp for breath. Let’s take a look at a few:

• The insecure outgoing Civil Surgeon of Alibaug, the one preceding him, had the impudence to mislead unsuspecting patients with a ridiculous assertion (Dr. Munje is only an MS, I am an MBBS) and worse, once he recklessly went ahead with the draining of an abscess only to please his bloated ego. The abscess was a rare case of aneurysm of the Aorta and he was forewarned by Dr. Munje against the drain for the potential blood deluge it would cause (which did happen in full force)

• Dr. Munje successfully managed a surgery of acute appendicitis on a furiously swaying makeshift operating table. Reason? The patient was a notorious sea pirate and the surgery happened at gun point in a rocking boat floating in the middle of the sea.

• On one occasion, he faced a queer request, a tempting surgical challenge, but one he downright refused for ethical reasons. The request was to make yet another invisible “pocket” in the inside of a person’s thighs to help smuggle diamonds. Dr. Munje however was all praise for the dexterity of the anonymous surgeon who had made the first pocket leaving only a thin 1-inch scar that invariably escaped the custom guys’ attention. Just because the surgeon was no more, the designer task had been “referred” to Dr. Munje.

• Guided by his impressive track record of quite a few thoracotomies in the district hospital, the incredible doctor performed a phenomenal surgery for the widening of a narrow heart valve on a complex case of Mitral Stenosis, on a patient with Situs Inversus (major visceral organs mirrored from their normal position). In hindsight, he admits it was a risky proposition at a small place like Alibaug. This feat won the admiration of India’s best known cardiologist who was vacationing in Alibaug at the same time. He was intrigued by the blood packs in his Alibaug-bound motor launch and decided to discreetly observe the “village surgeon” in action. Thrilled with what he saw, he offered Dr. Munje a lifetime opportunity to join his privileged team in Mumbai. No doubt, Dr. Munje would have scaled new heights with specialized training in cardiovascular surgery but he decided to stay put in Alibaug. The glorious sense of achievement amidst all the adversity was more precious than any professional recognition.

• Once he traveled all the way to Murud fighting rain and thunderstorm to attend to a bleeding pregnancy crisis but even before he could go about his job, the patient expired. For the sake of an old woman visibly frantic about the child in the womb, he decided to examine the dead body and actually felt a foetal movement. In a miraculous development, he delivered a badly asphyxiated but revivable child through a postmortem cesarean – a girl child after seven boys – who was named after the mother and grew up into a healthy woman and mother of three children herself.

• In one chapter titled “A dose of his own medicine” he recounts his own horrifying first-hand experience of awareness in anesthesia, having woken up in the midst of a routine operation to find him paralyzed, yet aware of every single surgical procedure from incision to retraction to dissection. It was only a miracle that he survived that near-death experience – akin to a blaze of spiritual enlightenment.

There are so many such instances – unbelievable but true - but the most astonishing feature a drunken ward boy called Mr. Sandey who regularly helped the doctor with such ingenious “Eureka” remedies that would find no mention in medical journals but they worked wonders when all medical possibilities had come to a screeching halt.

Here’s an account of one such Sandey solution:

A seven-month pregnant woman was attacked by a wayward bull causing a goring abdomen injury. The wound had perforated the abdominal wall exposing not only the intestinal loop and the protective abdominal fat (called omentum) but also the uterus which clearly showed the baby’s protruding forearm. Dr. Munje successfully opened the abdomen and fixed all injuries save for the baby’s hand. Even as desperate thoughts like amputation or a forced delivery crossed the doctor’s mind, our Mr. Sandey suggested a mild shock with a red hot needle. The suggestion seemed outrageous but Dr. Munje decided to pursue it. Heating an injection needle on a burning spirit swab, he placed it on the hand – and wonder of wonders, the child instinctively pulled its hand back. The birth two months later was perfectly normal and more important the hand had no tell-tale signs of the pre-birth mishap. And Dr. Munje had no qualms in unconditionally accepting Sanday’s genius as also proclaiming him as his most trusted advisor. Quick to express gratitude wherever it was due, he never sought attention or did his own promotion. Else, his world record of performing as many as 400 Tubal Ligations in a small village called Ainpur (that found mention in the London Times) could have easily entered the Guinness Book of World Records.

In the concluding chapter, Dr. Munje reminds us of Hippocrates, father of medicine, who remarked “I would like to know what sort of person has the disease rather than what sort of disease the person has”.

In the pursuit of medical advancement like genetic engineering, heart and kidney transplants, coronary bypasses and laser angioplasties, Dr. Munje laments, we have lost track of the human mind. Corporate entities have turned modalities like C T Scan, MRI, Sonography and nuclear studies into a profitable business. Doctors, he reflects, don’t feel the need to strike conversation with the patient any more. The diagnostic tools, which are only for the sake of confirming diagnosis, dictate the treatment instead.

In one instance, a patient was advised surgery for suspected cancer following a CT Scan which revealed a doubtful shadow in one of the nasal sinuses. Overcome with grief and stress, the patient had lost considerable weight which was linked back to the suspected cancer. When Dr. Munje examined him, he found the patient’s uncontrollable diabetes pointing towards diabetic neuropathy. The patient was taken into confidence and treated for diabetes. He had a full recovery in good time.

Despite his single-handed humanitarian work in remote areas, Dr. Munje was never adequately recognized by the government. Worse, he was repeatedly victimized and cornered by the powers-that-be – by peers and adversaries alike. Thanks to the supremacy of his conviction, he emerged unscathed every single time. And amidst all the strife, he never lost his zest for life. A wildlife enthusiast, he was fond of pets and as the pages of the book reveal, lover of poetry and shayari too. His striking sense of humour makes him a P L Deshpande among surgeons. He narrates many jokes and anecdotes in the book including this one popular in medical circles on the needless but rampant ordeals like Appendectomy: “A pretty nurse was called Appendix. Why? Because every surgeon wanted to take her out”

Whether at Alibaug or later at Thane, the doctor continued his practice largely on the goodwill he generated from his good work. Donations poured in from grateful patients but the doctor ensured they were always in kind – whether x-ray machines, refrigerators, cots, lockers, stretchers or even linen. In this context, Dr. Munje narrates one telling incident which reflects the sorry governmental practices in the name of rules and regulations. At some juncture, he had some of the worn-out instruments replaced with genuine stainless steel ones to sustain the hard water and sea shore proximity of Alibaug. Since the purchase exceeded the Government rate contract, he was questioned for the “exorbitant” expenditure. (He was never congratulated for the good work) Dr. Munje silenced the nuisance makers with some irrefutable logic “If you were to be operated yourself, which instrument would you prefer?” Obviously, there was no answer from the other side.

Dr. Munje’s will and skill in establishing a candid dialogue with his patients as also his unwavering commitment to the larger cause of medicine is a life lesson particularly for those medical professionals who choose to play safe at the cost of human life, and who treat their fraternity as nothing more than an elite club of the chosen few, consciously placed way above the reach and comprehension of the common people.

To put his profession in perspective in his own words “Surgery is a performing art, just like music, dance and stagecraft. But there are no retakes or replays. And as much an art, it’s a science and sacrament too.”

Sunday, April 09, 2017

The Riveting Rhythm of an Algorithm


Sudhir Raikar, IIFL | Mumbai |

Algo Trading represents a captivating convergence between Finance, Math and Technology. Before we explore its inherent potential, we need to explode a few myths. Here’s a primer for beginners.

The role of algorithms in addressing the needs and requirements of scores of disciplines across all walks of life – from commuting to computing – cannot be overemphasised. The answer to any challenge, common sense has it, is essentially a list of logically sequenced rules which is what an algorithm is all about. Named after Persian Mathematician Al-Khwarizmi’s set of arithmetic rules for Arabic numerals, algorithms evolved as potent tools for automated analysis, thanks initially to Charles Babbage’s pioneering Differential Engine and later Alan Turing’s dynamic Universal machine.

Today, the internet has truly unleashed the algorithmic potential in ways that were hard to imagine only a few years ago. Search engines, social networking platforms, e-commerce portals, hardware, software and middleware vendors - just about every entity relies heavily on the power of algorithms to identify preferences, define trends, influence target communities and build competitive edge in an ever-evolving marketplace. Data mining and analytics have taken a big leap forward with the recent marriage between algorithms and artificial intelligence.

Talking of the bourses, algorithmic trading is a sterling example highlighting technology’s enabling role of enhancing financial decision making in a highly unpredictable environment. Algo trading is an emotion-free, bias-free, scrupulous and validated mathematical analysis of humungous volumes of market data. Apart from expediting the analysis and execution processes, it helps market players make better decisions across diverse spheres including market making, inter-market spreads, arbitrage, hedging or speculation – whether bullish, bearish or range-bound.

Algorithms analyze market data based on pre-defined parameters and mathematical models which could be diverse in nature – from purely fundamental to the pattern-based. The models are the same, but the algorithmic value-add comes from the precision, flexibility and speed of analysis. Contrary to popular perception, algorithmic logic is fairly simple to understand even if they are intricate to develop and design. Simply put, algorithms study the stock market by weeding out emotional, subjective and irrelevant factors from the analysis. For Algo trading, it’s elementary to define the set of rules for trade entries and exits as also to gainfully employ historical data to build trading strategies.

Now that we have some idea of the essence of Algo trading, let’s explode the popular myths surrounding the term. Based on the clarity of thought, it would become much easier to explore the Algo market space for identifying and engaging with credible vendors and value providers.

Myth 1: Algo trading is fool-proof



Risk is integral to Algo trading like it is to any form of market activity. When it comes to unpredictability, they become as infallible as the weather prediction at times if not more often. The market can beat the models in several unfathomable ways and it’s necessary to take a holistic view of the overall portfolio. You may win some claims, you may lose some stakes but if you end up being a net winner, you have reaped the rewards of Algo trading, much like the common investor who spreads his or her portfolio across sectors and businesses to profit from diversification. And like how one needs to evaluate one’s portfolio potency from time to time, even the mathematical models governing Algo trading need to be regularly assessed for their dynamism and suitability in line with the targets and sectoral specifics of every investment. Another issue of concern and consideration is the caustic Algo warfare wherein certain crafty algorithms regularly look to outsmart the others to make a killing based on the illusions they create. There have been instances of algorithmic manipulations in the market that essentially profit from misleading other algorithm-driven traders as well as common investors. For instance, some Algos create artificial buying pressure on certain counters to influence other players to make aggressive purchases in anticipation of attractive price highs. Once the intended triggers have borne fruit, the mayhem architect quietly exits the scene having reaped a fortune.

Myth 2: Algo trading is only for the big fish



This is more the result of a fear psychosis emanating from ignorance. Essentially an enabler, this tool is pretty democratic in its utility value and proves gainful provided one is prudent about risk management and constant evaluation. Expert help is available to the retail investor to reap the rewards of Algo trading like it is accessible to treasury houses, family empires and HNIs. Like it’s very common today for common investors to engage in technical analysis based on candlestick patterns and moving averages, they can do well to gain some familiarity about Algo trading as well. As it is, this space is gradually opening up its vistas to the retail investor. There are many companies, predominantly in the West, that now offer an unambiguous design environments and programming templates to common traders for developing customised Algo trading strategies. Many vendors are trying to optimize the coding and back testing time to make Algo trading more attractive for everyday investors who wish to get a flavour of the game without any help from computer whiz kids or mathematical geniuses. In the time to come, we may have more and more user-friendly platforms allowing common investors to input asset types, indicators and algorithms in order to track meaningful patterns and predict movements for specified time frames.

Algo trading is naturally suited to asset classes with limited number of participants with the time, inclination and wherewithal to develop quant-based strategies for high-volume trades in an extremely volatile scenario. There’s no surprise that retail investors are invariably not part of this segment dominated by hedge funds and arbitrage houses. However, this fact does not imply the absence of a level playing field as many like to believe. Even without quant-based trading, small traders could never match the might of the top-notch brokers and institutional investors. More importantly, a small investor looking to make steady long-term gains has no reason to compete with the big guns. He/she can still make gainful long term gains from fundamental analysis as also take benefit of the Algo space to sharpen his/her analytical abilities. No wonder, Algo strategies hitherto applicable to high-frequency trades of a few seconds are increasingly being extended to conventional trading of a larger time span – whether days, weeks or months.

Myth 3: Algo trading technology is copybook



Technology for Algo trading, hard as one may like to believe, is far from standard. Right from the choice of language to system architecture, much depends on the trading specifics including trading frequency and volumes.

Readers will find the following thought piece highly informative in understanding the technology considerations of setting up a Algo trading environment including performance, ease of development, resiliency and testing, separation of concerns, familiarity, maintenance, source code availability, licensing costs and maturity of libraries:

http://www.quantstart.com/articles/Best-Programming-Language-for-Algorithmic-Trading-Systems

Myth 4: Algo trading is disruptive



This is more an expectation than a myth but still far from reality. Algo trading for all its promise is a great complement to conventional trading. In every trade, the human gut feel is of the greatest essence while the quantitative analysis is a great validation tool to remove ambiguity and bias. With the passage of time, Algo trading will only gain from strength to strength for its value proposition is indisputable in making trading decisions fast, reliable and cost-effective. As our trading and investing psyches evolve, we will be keener to take advantage of analytics to sharpen our financial decision-making. But that certainly won’t make Algo trading disruptive as the place and premium of human intuition and insight is irreplaceable especially in situations which are beyond machine comprehension including political instability and natural calamities. As for the future, it clearly belongs to those who show the maturity and alacrity to become masters of both worlds. This tribe will always be in minority but will rule over the majority.

Wednesday, March 15, 2017

मी जगून पाहिलंय


15th March is my dad's birthday. I am reproducing one literary gem from the timeless archives of his philosophical writings (thanks to Meena Aatya, I could access some of his old priceless letters)

असं कार्य मी करून पाहिलंय
ज्याची कदर कधी होत नाही
असा स्वार्थ मी सोडून पाहिलाय
ज्याला त्याग कुणी म्हणत नाही

असं खरं मी बोलून पाहिलंय
जे कधी कुणाला पटत नाही
असा धर्म मी झुगारून पाहिलाय
जो मनाला मोठं करीत नाही

असा विश्वास मी टाकून पाहिलाय
ज्याला किंतु कसा शिवत नाही
अशा बेअब्रूत मी बुडून पाहिलंय
ज्यातून वर कुणी निघत नाही

अशा आगीत मी जळून पाहिलंय
जिची हाळ कुणाला लागत नाही
असं मरण मी मरून पाहिलंय
ज्या मर्तिकाला कुणी जमत नाही

असा प्रवास मी करून पाहिलाय
ज्यात खंड कधी पडत नाही
असं वाळवंट मी पार केलयं
ज्यात ओऍसिस कुठं दिसत नाही

अशा मार्गानं मी चालून आलोय
ज्यात मदत कुणाची मिळत नाही
असं अंतर मी कापून काढलय
जे लक्षात कुणाच्या येत नाही

असं काहीतरी मी मिळवून पाहिलंय
जे सहसा कुणाला लाभत नाही
असं जीवन मी जगून पाहिलंय
जे वाया कधीच जात नाही

- यशवंत रायकर (बडोदा)

Wednesday, February 22, 2017

The Best Option: Trust the Greeks


Courtesy: An IIFL appetizer on Option Greeks and their pivotal significance in Options trading.
Sudhir Raikar, Content architect, IIFL



Ancient Greek philosophy, much like the Indian Vedic thought, is unanimously hailed as the mother of deep introspection and radical reasoning. In fact, the European renaissance owes a lot to the Hellenic republic for the knowledge repository in diverse areas including polity, philosophy, ethics, metaphysics, ontology, logic, biology, rhetoric, and aesthetics. No wonder, the Americans still turn to Aristotle’s Poetics to fathom the root cause of any tragedy. The tragic flaw, Aristotle reminds us, is hubris, an excessive pride that causes the hero to ignore a divine warning or to break a moral law.

In the context of financial tragedies, hubris could well be the collective complacency and conceit that breed inertia and indecision. Going deeper into the womb of the financial context, a conveniently complacent perception that guides most players in Options trading is that the macro variable of market direction rules the game, with little or no thought to the velocity and volatility of change as also the associated time bleed.

Trust the Greeks for providing a reliable compass to find our way through the often-turbulent, living waters of premium movements – in the form of a lighthouse popularly known as ‘The Option Greeks’. A better appreciation of the Option Greeks will help novice traders lock horns with the intricacies of Options pricing, which go far beyond mere price movements of the underlying stocks or indices and merit a deeper probe into the distinction between option price and option value.

The Option Greeks find their roots in mathematical models like Black-Scholes and Cox-Ross-Rubinstein. They quarantine a given variable to study the effect of its change on the options price. Consequently, we get a concrete rationale, albeit theoretical, to base our trading decisions which otherwise could prove to be a nightmarish experience if driven by blind faith, half-baked advice or reckless choices. If you develop some resonance for the Option Greeks, you would never say, “It’s all Greek to me”. To help you do just that, here’re five Greeks introducing themselves for the very first time in the history of Options Trading:


Delta: Prices change, so do premia




Hi folks, I am well known to students of physics and mathematics. In the context of options trading, I am a dynamic number revealing the change in premium following the change in the price of the underlying security. For call options, I move between 0 and 1. So if I am 0.3, the premium will vary by 0.3 points for every 1 point of change in the underlying price. For Put options, I range between -1 and 0 (diametrically opposite you see). So, for every gain of underlying price, put premium goes down to my extent (exact opposite for any fall in underlying price). By using an options calculator, you can match my values with the given moneyness applied to calls and puts as per the respective logic in contrary directions (ITM: positive intrinsic value and time value, ATM: strike price equal to current price or OTM: no intrinsic value)

Gamma: Who moved my delta



Hello, I am expressed as a positive number for both calls and puts, calculated in terms of my 2nd order derivative Vomma. I let you know the rate at change in the option’s delta in line with the change in the underlying. So, delta moves to the extent of my value for every point move of the underlying. A revised delta is thus original delta + (point change in underlying multiplied by me) I may appear hopelessly vague to you but do pay close attention nevertheless. It’s only when you consult me for risk analysis, you find that equal deltas may not bear identical outcomes. A delta with a higher value of mine will spell higher risk or reward, given the fact that any antagonistic change in the underlying stock or index will have a large adverse effect on the delta (ditto for favourable outcomes).


Vega: Left, right, centre of Ups and Downs


I measure the rate of change of option’s premium for every percent change in volatility which is in turn represented by fear and uncertainty over likely and unlikely market developments. All options, whether calls or puts, rise in value with the rise in volatility thereby increasing the likelihood of the option expiring ITM. No marks for guessing that I am a positive number, for both calls and puts. All other things being constant, I will always be higher for ATM options compared to the other two variants given that ATM options are most sensitive to volatility in terms of aggregate points. Need I add that OTM options are the most sensitive to volatility in percent terms.

Theta: All about time and its decay



I measure the rate at which an option loses value with the passage of time. As options get closer to expiration, the rate of money loss increases, so does the premium. The eroding premium represents the time decay. Simply put, I represent loss of points in the given time frame. I have different mood swings for different strike prices. For deep OTM and ITM options, I deplete at a furious pace in the initial stages and get reduced to almost nil during the concluding phase. But for ATM options, I do the contrary, constant during the initial periods and super-fast in decay during the last phase, with the pace of deterioration maximum in the last leg. I am the hot favourite of option sellers for obvious reasons. By the way, time expiry is more crucial than what you think. So even if my friend Vega shows high volatility, he may have a limited impact on the option value if the time to expiry is less. So, read mine and Vega’s values in concurrence given that time and volatility are interrelated variables.

Rho: Strictly a matter of interest



I begin (and end) with a humble submission! Yes, I don’t matter much to you given the relatively steady state of bank interest rates. Yet, no harm in knowing me better. I stand for the change in option value for every percent-point change in interest rates. My formula is rather complex, but it should suffice to say that I am calculated as the first derivative of the option's value with respect to the risk-free rate. Interest rates are used in pricing models to consider the options price based on its hedged value. I am positive for calls bought, as higher interest rates push call premiums up. Conversely, I am negative for puts bought as higher interest rates erode put premiums.

On Dementia

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