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Today I had to leave work early to go to Bandra to pick up some stuff from NSE. I had to be at Bandra by 6PM and there was no way I could reach Bandra with in a short time other than taking up a fast train from Churchgate. I took a fast train and as the train moved , there were 2 youngsters , early 20’s I guess, who were standing next to me, infact literally falling on me as the compartment was jam packed. I could not help but overhear their conversation. They were recounting some of their campus experiences a year ago. It was clear that they had graduated from one of the engineering colleges and hearing their lingo, it was easy to guess the institute. In any case, the thing which was caught my attention was that they were discussing /debating/ ruminating about some delta hedged position on an index option!!.They were both working for some brokerage firm in Mumbai and were barely an year in to their job. I somehow have this feeling, that when options are discussed by youngsters in a jam packed train compartment, it is a sign of positive things to come, as far as financial instruments evolution in India is concerned.

With things slowing down in US, a lot less people would opt for masters (math-fin) degrees as they are priced at a premium, given the current recession environment. Looking at these market conditions, a lot less people would like to spend a ton of money on courses where the employment opportunities are fleeting. Also , there is an increasing realization amongst university professors that they have milked a lot of money from math fin programs and it is becoming a painful reality to the freshly minted grads that blackscholes, risk neutrality , stochastics are good to know..but you are valued only if you have worked on them . And working on them( read doing justice to them ) , especially in a jam packed masters program is little difficult. It comes only thorough working on data. One of the professors at a famous institute in US remarked, " How long are we going to teach the same old Black scholes? By the time they even understand these things, they have to focus their attention on impressing sombody(read job interviews) ? " ..Anyways, I have digressed a bit .The point is , thanks to the economy, more people would be forced to learn the stuff directly from the market rather than classrooms!!

My experience today has somehow left me with a feeling that Indian financial markets will innovate and more sophisticated instruments will be traded as time goes by. I don’t have to read a research report about financial innovation that could happen in India …..Markets will become sophisticated, thanks to the kind of youngsters I stumbled on , in a jam packed train ride. With these kind of people discussing , debating, trading in Indian markets, markets are bound to become efficient.