Tuesday, July 04, 2006

The Leaving

For G- who left today for greener pastures.

Another farewell, and when the optimists, finding the glass half full, have left looking for new beginnings, the pessimists, finding it half empty, have left predicting apocalypse, it is left to us, the realists, to hang around, finish the drink, settle the bills and head home, in a contemplative mood.

I step out, refusing the offers to drive me home, as a soft rain soaks Bombay’s remaining nocturnals- the Drunkard and the Destitute. A soft drizzle, the halogen shimmer under a street lamp, allowing a slight rustle in the few trees that inhabit this part of town. And an occasional thunderclap- a noise I had been told happens when a white, fluffy, lazy cumulus, finds itself in the way of a darker, sprightly and more blithe stratus.

And I wonder, what is family. Do we reserve the sentiment for the unit we’re born into: father, brother, sister, mother- in singular and plural, alternatively. Is it the one we acquire, the spouse, the kids?

Or does one attach a similar importance, which one normally reserves for the text book family, to people who change you in a certain way, unique in the way they do, and not always making you happy, but affecting you, definitely and irreversibly.

So G (short for Gamma) was gone.

Gamma, that letter of the Greek alphabet, which simply implied that in our professional scheme of things he was third in the hierarchy. Globally. But to us the word had a special meaning, which had no meaning outside our little world of volatility traders. That unpredictable element, the irrelevant first derivative of Delta, which whipsawed us when we least expected, or on better days left us with an unexpected but welcome profit. The one who would Smile upon our minutest errors, or Smirk, at the greatest achievements. Yes, that he truly was. Unpredictable.

G and I assumed our respective roles at around the same time some three years back- me at the bottom of the pile, and he, leading the pack. In fact he was the one who took me into this line of work. I think that, more or less, caused a certain bond. Apart from the usual rigmarole of making money for the desk and the room, I ran his errands, as is the norm in our line of work. Pulling out data from Bloomberg, formatting his Man Comm presentations, spreadsheets and spreadsheets, with tons and tons of numbers. Very vital, very confidential, and at that time very meaningless.

Since we couldn’t compromise trading hours, we sat through these things on late evenings, Saturdays, holidays, Sundays too. His work was too important to delay, and even though it didn’t form a part of my mandate, I’d do it. One such holiday, on a festival of utmost importance to most, he told me that he loved to come into to work. To watch the markets move around the world, around the clock, unrelenting, without passion, without sympathy. Just the cold blinking numbers on a screen, and the unusual dead of the trading floor. And slowly, I got to like them too. Flashing. With or without any meaning.

And between these things we talked, and talked. About markets, about the volatility, the future of interest rates in Brazil, or exchange rates in New Zealand, breaking down of correlations, commodity prices in Russia, relationships, my imaginary girlfriends, out of the money personal equity exposures, in the money positions which we couldn’t book profits on, because of some silly compliance rules which debarred us from selling too soon, and property markets. While macros ran on complex spreadsheets, while pizzas were sliced and cokes were downed. Complex questions of life easily crystallized, and randomly resolved.

And over the next three years, even when I didn’t really need to do that stuff, I carried on nevertheless, much to the delight of those who followed my footsteps into the trading floor. Just because, he’d stick his head out of his corner office, and holler- “T.O.!” I spent hours at his house, sometimes partying or just chatting, late into the night.

From him I learnt… oh what a shit load I learnt. I learnt to trade, to sell, to buy. When to sit out, and when to take the plunge. When to respect greed, when to resist it. I learnt that there is a method to the madness, to the numbers flashing on a Bloomberg terminal. That complex algebraic formulae, do mean something in the real world. That the Taylor’s and the Fourier Series, are not just words. That there lies a beauty in numbers and models, in equations of variables and that the Greeks aren’t always just that. That people are intelligent, and weak, all at once. I learnt to make deals, I learnt to walk away from them. I figured that I this world there aren’t just big things and small things- that there big things that you must ignore, and small things that you just can’t afford to. And that’s what has made the difference between- Greed and Greatness.

I realized that greatness lies not in numbers, and not just in your account balance, but in realizing your responsibilities and reacting to that realization. That there is a time to holler, and a time to pat a person on the back. That your anger has a value and so does your compassion, and if you use either of them too often, you risk losing respect. Respect. I learnt that respect is not reserved only for those above you, but also to be showered on the perceived insignificant, when they deserve it. That putting your arm, that mighty arm of G, around a person when he’s down, means so much, as it does multiply your elation when the going is good. That to reach out, you must do it at a level which is neither too high, nor too low, but just right. That you must retain that humility and the humanity to be able to make the difference. Make the difference.

I learnt that the biggest thing that you can have in a relationship, any relationship is trust.

This has taken me 2 days to write. Now, I sit in the empty dealing room once more, only that this is the first day that you’re officially not around. I’ll miss having you around… but I know, I know that one can’t bind themselves to people like you. You were meant to move on to bigger things, like I will one day. That we were just meant to brush past each other, and yet make that slight ruffle, an occasion to remember, to rejoice.

And today as I shut down my PC and I collect my things, my debris of existence, I find myself realizing that things will never quite be the same.

All the best!

(Delta is the change in the price of an option for a one point moves in the underlying.
Gamma is the change in an option’s delta for a one-point change in the price of the underlying
Volatility Smile refers to the long-observed pattern in which at-the-money options tend to have lower implied volatilities than other options. The pattern displays different characteristics for different markets, and is an area of significant academic research (i.e., it is not well understood). A closely related concept is that of Term Structure of Volatility, which refers to how implied volatility differs for related options with different maturities.
Smirk is an inverted Volatility Smile)


Anonym said...

And that was an alpha post!

dazedandconfused said...

One of your best, T.O.! Especially liked this line,

"That your anger has a value and so does your compassion, and if you use either of them too often, you risk losing respect."

shikha said...

very heartfelt T.O!