Black Scholes and the formula of doom http://ftalphaville.ft.com/blog/2012/04/30/979851/black-scholes-and-the-formula-of-doom/ Robin Dymond, CST Managing...
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Chris Matts
chrismatts1968
Apr 30, 2012 4:47 pm
Hi Robin Thanks for posting this. For anyone not sure about the relationship between Black Scholes and Real Options......
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radimspicar
Aug 20, 2012 1:24 am
Hello, I have a question that I couldn't find an answer to in any literature. Suppose we have a company with multiple opportunities to expand, each dependant...
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Patrick Steyaert
p.steyaert
Mar 14, 2013 7:35 am
Just a quick question. As real liquidity goes up in IT projects - shorter cycle times, more pull transactions - are we then creating the conditions were...
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Chris Matts
chrismatts1968
Mar 14, 2013 2:13 pm
Hi Patrick Liquidity is just one of the considerations. If you look at the comic strip, there are other issues that will remain.... "What is a glass of water...
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David Anderson
netherby_uk
Apr 23, 2013 7:21 pm
I was asked in an advanced Kanban class 2 weeks ago in Brazil whether there actually needs to be a commitment point? Couldn't everything in the system remain...
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David Anderson
netherby_uk
Apr 23, 2013 7:33 pm
Did you see this article on BBC today discussing new science linking the 2nd law of thermal dynamics, the concept of entropy in the universe to option theory...
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David Peterson
dpeterson72
Apr 23, 2013 7:37 pm
I think it depends what they mean by "everything". Management can pull the plug on development at any time, so the *features* of the system are options until...
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Graham Oakes
grahamdoakes
Apr 23, 2013 7:58 pm
Options have value, but they also have a carrying cost. For example, there's a cost (e.g. in cognitive load) to keep track of what options are live, when...
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David Anderson
netherby_uk
Apr 23, 2013 7:59 pm
Hi Chris / Patrick, I just re-read the cartoon - wonderful. :-) I have a few thoughts on this. Patrick, as system liquidity improves (let's leave it as an...
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David Anderson
netherby_uk
Apr 23, 2013 8:06 pm
David, There is still a concept of "committed work" versus "speculative work". The pre-planning and development of ideas for the annual portfolio management...
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Nick de Voil
nickdevoil
Apr 23, 2013 8:11 pm
... carrying options, so they like to close them off sooner. Other people incur a lower cost, so they like to keep their options open for longer. I believe...
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David Peterson
dpeterson72
Apr 23, 2013 8:17 pm
Is there a distinction in reality between "speculative work" and "committed work"? Or is it just a label and a change in the scale of investment? David...
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Raoul Duke
theraoulduke
Apr 23, 2013 8:23 pm
... €0.02, ja wohl, something that is said to be "committed" to can still be yanked out from under people. so i would see all these things as just being at...
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David Anderson
netherby_uk
Apr 23, 2013 8:24 pm
Graham, Do you consider discarding an option a "commitment"? Do all options expire? In the case of those that do, I believe the expiry date (or conditions) can...
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David Anderson
netherby_uk
Apr 23, 2013 8:26 pm
David I think this depends on the point of view. If you commit to do something for me, but treat that commitment as option and choose not to deliver it then I...
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Raoul Duke
theraoulduke
Apr 23, 2013 8:33 pm
... reads to me like those terms are being flung about with many different connotations or contexts, which can both be interesting and educational, but also...
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David Anderson
netherby_uk
Apr 23, 2013 11:28 pm
Raoul, Do not confuse a commitment to spend time on something and be paid for the time, against a commitment to deliver something? If the something is...
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Raoul Duke
theraoulduke
Apr 23, 2013 11:50 pm
i personally continue to see in this thread that there are too many /levels at which/ and /objects (in the grammar sense) for which/ the terms 'committed' and...
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Graham Oakes
grahamdoakes
Apr 24, 2013 5:08 am
... Often I discard an option by committing to another, mutually exclusive option. The act of committing can't be separated from that of discarding. Sometimes...
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Josephine Gemson
josephine4685
Apr 24, 2013 7:25 am
The option to commit can be very real and expensive in some decisions, esp those that require infusion of resources in stages / tranches and/or industries...
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Mike Burrows
asplake
Apr 24, 2013 7:47 am
Not picking on Graham, but I fear that this casual "options have value" phrase bothers me a bit. Niggle 1: They have value to whom? Where? I am pretty...
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Patrick Steyaert
p.steyaert
Apr 24, 2013 7:35 pm
The definition of an option is "the right to do something, but not the obligation". When a lean startup launches a probe it creates itself the "right" to...
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Graham Oakes
grahamdoakes
Apr 24, 2013 8:45 pm
Hi Mike, Don't disagree with you. I was trying to say that, yes, options have value, but they also have costs. There can be a cost to create them and a cost...
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Patrick Steyaert
p.steyaert
Apr 25, 2013 4:56 am
Ther's actually some mathematics that can help you here. The statistics problem of the multi-armed banded studies the optimal point between exploration...
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David Anderson
netherby_uk
Apr 26, 2013 6:08 am
Patrick / Raoul, I believe that there is a point where the customer believes you are obliged to deliver. An obligation has been made. Whether or not some third...
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David Anderson
netherby_uk
Apr 26, 2013 6:11 am
Yes, I think so!...
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David Anderson
netherby_uk
Apr 26, 2013 6:21 am
Does the phrase need to be "options have a value in the face of future uncertainty"? And the value of the option is determined by the cost of delay of creating...
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David Anderson
netherby_uk
Apr 26, 2013 6:24 am
Mike, This is a very thoughtful post. So thoughtful in fact that I feel I will need to think about it quite a lot. I like the idea that we should focus on...
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David Peterson
dpeterson72
Apr 26, 2013 7:31 am
I think the sociological and psychological elements depend on the circumstances so are hard to generalise about. Options-thinking to me is about looking at...
