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Mycetoma is a chronic granulomatous, suppurative and progressive inflammatory disease that usually involves the subcutaneous tissue and bones after traumatic inoculation of the causative organism. In India, actinomycotic mycetoma is prevalent in south India, south-east Rajasthan and Chandigarh, while eumycetoma, which constitutes one third of the total cases, is mainly reported from north India and central Rajasthan. The objective was to determine the epidemiological profile and spectrum of eumycetoma from a tertiary care hospital in Delhi, North India. Thirty cases of eumycetoma were diagnosed by conventional methods of direct microscopy, culture and species-specific sequencing as per standard protocol. The spectrum of fungal pathogens included Exophiala jeanselmei, Madurella mycetomatis, Fusarium solani, Sarocladium kiliense, Acremonium blochii, Aspergillus nidulans, Fusarium incarnatum, Scedosporium apiospermum complex, Curvularia lunata and Medicopsis romeroi. Eumycetoma can be treated with antifungal therapy and needs to be combined with surgery. It has good prognosis if it is timely diagnosed and the correct species identified by culture for targeted therapy of these patients. Black moulds required prolonged therapy. Its low reporting and lack of familiarity may predispose patients to misdiagnosis and consequently delayed treatment. Hence health education and awareness campaign on the national and international level in the mycetoma belt is crucial.
Fifth generation (5G) is the current hot topic of the world's leading telecommunication companies. The compact designs of antennas made it possible for them to resonate at higher frequencies, thus to enable the devices to attain higher data rate as compared to 4G technology. Data rate of 5G technology for low mobility users is expected to be 50.0 Gbps and for high mobility users it is 5.0 Gbps. On the other hand, International telecommunication union's objective for 5G is 3 times more spectrally efficient thanlong-term evolution (LTE). The paper has carried out meticulous study over the impact of 5G antennas on the size of antenna, size/type of substrate, gain, efficiency, and isolation, etc. Also, different arrays andmultiple input multiple outputs (MIMOs) with patch antenna, magneto electric-dipole, microstrip grid array antenna, folded dipole, series-fed array, connected antenna array, MIMO are studied. The paper also includes the existing technology i.e 4G LTE and their isolation enhancement approaches. Many of the designs used the reflector plates to reduce the back lobe radiation problem in MIMO/array antennas to increase front-to-back ratio. The gain in 5G antennas can be increased by using balun, parasitic element as directors, multiple notch structures, three identical slot sub-arrays, etc. Mathematical equations of multi-element/port antennas are included to model the designed antennas. The beam steering is also included for the 5G technology in this paper.
To recount experience with cerebrospinal fluid otorrhoea and temporal bone meningoencephalocele repair in a tertiary care hospital.
A retrospective review was conducted of 16 cerebrospinal fluid otorrhoea and meningoencephalic herniation patients managed surgically from 1991 to 2016.
Aetiology was: congenital (n = 3), post-traumatic (n = 2), spontaneous (n = 1) or post-mastoidectomy (n = 10). Surgical repair was undertaken by combined middle cranial fossa and transmastoid approach in 3 patients, transmastoid approach in 2, oval window plugging in 1, and subtotal petrosectomy with middle-ear obliteration in 10. All patients had successful long-term outcomes, except one, who experienced recurrence after primary stage oval window plugging, but has been recurrence-free after second-stage subtotal petrosectomy with middle-ear obliteration.
Dural injury or exposure in mastoidectomy may lead to cerebrospinal fluid otorrhoea or meningoencephalic herniation years later. Congenital, spontaneous and traumatic temporal bone defects may present similarly. Middle cranial fossa dural repair, transmastoid multilayer closure and subtotal petrosectomy with middle-ear obliteration were successful procedures. Subtotal petrosectomy with middle-ear obliteration offers advantages over middle cranial fossa dural repair alone; soft tissue closure is more robust and is preferred in situations where hearing preservation is not a priority.
This study examined the hypothesis that xanthosine (XS) treatment would promote mammary-specific gene expression and stem cell transcripts and have a positive influence on milk yield of dairy goats. Seven primiparous Beetal goats were assigned to the study. Five days after kidding, one gland (either left or right) was infused with XS (TRT) twice daily for 3 d and the other gland with no XS infusion served as a control (CON). Mammary biopsies were collected at 10 d and RNA was isolated. Gene expression analysis of milk synthesis genes, mammary stem/progenitor cell markers, cell proliferation and differentiation markers were performed using real time quantitative PCR (RT-qPCR). Results showed that the transcripts of milk synthesis genes (BLG4, CSN2, LALBA, FABP3, CD36) and mammary stem/progenitor cell markers (ALDH1 and NR5A2) were increased in as a result of XS treatment. Average milk yield in TRT glands was increased marginally (approximately ~2% P = 0·05, paired t-test) per gland relative to CON gland until 7 wk. After 7 wk, milk yield of TRT and CON glands did not differ. Analysis of milk composition revealed that protein, lactose, fat and solids-not-fat percentages remained the same in TRT and CON glands. These results suggest that XS increases expression of milk synthesis genes, mammary stem/progenitor cells and has a small effect on milk yield.
High frequency of low birth weight (LBW) is observed in rural compared with urban Indian women. Since maternal BMI is known to be associated with pregnancy outcomes, the present study aimed to investigate factors associated with BMI in early pregnancy of urban and rural South Indian women.
Prospective observational cohort.
A hospital-based study conducted at an urban and a rural health centre in Karnataka State.
Pregnant women (n 843) aged 18–40 years recruited in early pregnancy from whom detailed sociodemographic, environmental, anthropometric and dietary intake information was collected.
A high proportion of low BMI (32 v. 26 %, P<0·000) and anaemia (48 v. 23 %, P<0·000) was observed in the rural v. the urban cohort. Rural women were younger, had lower body weight, tended to be shorter and less educated. They lived in poor housing conditions, had less access to piped water and good sanitation, used unrefined fuel for cooking and had lower standard of living score. The age (β=0·21, 95 % CI 0·14, 0·29), education level of their spouse (β=1·36, 95 % CI 0·71, 2·71) and fat intake (β=1·24, 95 % CI 0·20, 2·28) were positively associated with BMI in urban women.
Our findings indicate that risk factors associated with BMI in early pregnancy are different in rural and urban settings. It is important to study population-specific risk factors in relation to perinatal health.
Survival for hypoplastic left heart syndrome patients following the Norwood procedure is 71–90%. Mortality in patients with Turner’s syndrome and hypoplastic left heart syndrome after conventional palliation (Norwood operation) has been reported as high as 80%. This questions the approach of traditional staged palliation. Here, we report a patient with hypoplastic left heart syndrome and Turner’s syndrome bridged to orthotopic heart transplantation following a hybrid procedure.
Throat swabs are neither specific nor sensitive for micro-bacteria causing sore throat symptoms; however, current guidelines suggest they are still useful in some cases.
Retrospective and prospective analyses were conducted of throat swabs requested within the months of January 2016 and August 2016, respectively.
The study comprised 247 patients. Fifty-nine (24 per cent) had a positive culture. Forty-six grew group A beta-haemolytic streptococci, with the remainder growing candida (n = 10), coliform (n = 1) and klebsiella (n = 2). There was no significant difference in culture rates between primary or secondary care sources (χ2 = 0.56, p = 0.45). None of the swabs influenced a variation in patient management from local antimicrobial policies. Current practice has an estimated annual financial impact of £3 434 340 on the National Health Service.
Throat swabs do not influence the antimicrobial treatment for patients with sore throats, even under current guidelines, and incur unnecessary cost. Current clinical guidelines could be reviewed to reduce the number of throat swabs being conducted unnecessarily.
In the early 1980s, the word ‘derivative’ was used mainly in chemistry (as in, hydrocarbon derivatives) or mathematics (as in, the second derivative of a function). Today, it is most commonly used in the context of financial markets. This is a reflection of the phenomenal speed with which these new financial instruments have evolved. Derivative markets today have an estimated value of over 378 crore crores or 3.78 x 1016. To put this figure in perspective, it is several times larger than the whole world's Gross Domestic Product (GDP)! Once considered exotic instruments used only by the high priests of international finance, these have now become ubiquitous. More and more companies and even some governments are using, or being forced to use, derivatives in a fast-changing world of unprecedented opportunities and unprecedented risks. An understanding of derivatives is thus a necessity for anyone interested in the financial markets.
Definition of derivative
A derivative security (commonly shortened to derivative) is a security or contract designed in such a way that its price or value is derived from the price of an underlying asset.
For instance, the price of gold ‘futures contracts for October maturity’ is derived from the price of gold. The value of a ‘September call option’ on sugar is derived from the price of sugar. The value of a ‘five year interest rate swap’ is derived from the prevailing rate of interest. The price of a derivative security is not arbitrary; it is linked to the price of the underlying asset. A rise in the price of the underlying may lead to a rise (or fall) in the price of the derivative, but in a predictable way. Because the relationship is predictable, transactions in derivatives can be used as a method to compensate for, or offset, the risk of price changes in the underlying asset. Formulae can usually be used to calculate the effect of the price of the underlying in the price of the derivative. However, the relationship is not always precise and the formulae are not always accurate and hence derivatives may not always work exactly as intended.
As discussed in the introduction, interest rates have become quite volatile in the modern era. Changes may occur either because of policy action by the central bank or because of changes in the money market triggered by macro-economic changes in the domestic market, or even because of fluctuations in the foreign exchange market. Whatever the cause, institutions and individuals who borrow or lend significant sums, especially those who borrow or lend at floating interest rates, are exposed to risks arising from fluctuations in interest rates. Interest rate futures are an instrument allowing hedging and speculation in these risks. Interest rate futures are a sub-set of interest rate derivatives.
Interest rate futures or debt instrument futures
Strictly, interest rate futures are not futures contracts on interest rates per se, but rather futures contracts on underlying interest-bearing debt instruments like corporate, government and other bonds or short term deposits with a pre-specified face value and coupon (i.e., interest rate). When the maturity value of a bond or deposit is known, the implicit rate of interest (yield) can be calculated.
The underlying can be either a short term debt instrument (like a bank deposit) or a long term debt instrument (like a bond or debenture). Therefore, a futures contract on a debt instrument is ipso facto a futures contract on interest rates, but the relationship is inverse. This is different from stock or commodity futures: when one talks about these terms, one knows that one is substantially and directly dealing with the price movement in the stock and/or commodity itself, and not some implicit number therein.
The price in its own domestic market of a sovereign (i.e., central or federal) government security denominated in local currency varies exclusively and inversely on the basis of interest rates because credit and liquidity risks are nil. The coupon rate of interest on a bond reflects the rate of interest prevailing at the time the bond was initially issued, but interest rates change over time.
This chapter examines exchange traded funds (ETFs) and ‘structured products’. Some, but not all, ETFs and structured products are effectively derivatives.
Exchange traded funds
ETFs are investment funds that can be bought or sold on an exchange like a share. They may be of two types:
• ‘Index mutual funds’ or ‘Cash ETFs’ whose composition and performance matches a specified equity or other price index; such funds may hold the actual underlying asset in the same proportion as the index. For example, an ETF mirroring the Nifty index might hold the shares comprised in the Nifty in exactly those proportions; a gold ETF will hold gold. Cash ETFs may be geared up by borrowing.
• Synthetic funds whose performance matches a specified underlying without actual ownership of the underlying.
ETFs usually trade close to, but not exactly at, their Net Asset Value (NAV) although depending on demand and supply they can trade at significant premia/ discounts. The NAV is the value of the assets owned by the fund but the shares of the fund may trade at values higher or lower than that underlying value. To the extent the fund actually owns income-earning assets; ETFs may have a yield through dividends.
Most ETFs have an annualised expense ratio – ranging from 0.1 per cent of the price or NAV to around 2 per cent, depending on the liquidity, quantity of assets under management and strategy. (A strategy requiring more frequent trading or ‘rolling over’ of underlying assets will require higher costs than one involving passive holding of a fixed set of assets.) In this respect, the cost of holding the index fund is different from an actual holding of the underlying.
As with company shares, unless there is an Initial Public Offering (IPO) or Follow-on Public Offering (FPO), most trading takes place in the secondary market. Only some dealers buy ETF units in large blocks called ‘creation units’ directly from the ETF distributor.
The three main derivative securities (futures, swaps and options) have been discussed at length in preceding chapters. This chapter covers other derivatives, in brief. Analytically, many of these derivatives can also be viewed as being constructed from the basic building blocks of futures and options, an exception being event-based derivatives which are closer conceptually to insurance contracts.
Forward rate agreements
A forward rate agreement is a contract, generally entered into between a bank and a customer, which gives the latter a guaranteed future rate of interest to cover a specified sum of money over a specified period of time in the future. A forward rate agreement (FRA) does not involve actual lending or borrowing of sums of money. It is merely an agreement which fixes a rate of interest for a future transaction. At the time when the customer actually requires funds, he has to separately borrow the money in the cash market at the rate of interest prevailing then. If the rate of interest payable in the cash market turns out to be higher than the rate of interest fixed in the FRA (entered into earlier), the bank which signed the FRA will pay to the customer the difference in the interest rate. However, if the rate of interest payable in the cash market turns out to be lower than that fixed in the FRA, the customer has to pay the difference in the rate of interest. This transaction is known as purchase of a FRA from the bank.
It is worth repeating that no actual lending or borrowing is involved in the FRA. If the customer eventually decides not to borrow the sum of money, no amount is payable from or to the bank. While reference was made to a customer intending to borrow, it is also possible for a customer to enter into an FRA for his deposits. A customer may wish to have a guaranteed rate of interest for a sum of money which he intends to deposit at a future point of time. He can enter into an FRA with a bank. He has to separately make a deposit in the cash market at the appropriate point of time.
Derivatives can be traded on exchanges, or OTC. In principle, not much infrastructure is required for OTC trading – all it requires is for two parties to agree. Exchanges originated as informal below-the-tree marketplaces for hedging and speculating. In earlier days, an exchange was often merely a known marketplace in contrast to isolated one-on-one transactions, and did not afford one the counterparty protections of a modern clearing house. Nonetheless, the public and open nature of the transactions meant that the credibility and reputation of both parties were involved and this offered some protection against default.
Exchanges are essentially the first layer of regulation for exchange-traded derivatives. Modern exchange trading generally reduces counter-party risks because the two parties are shielded from each other by the exchange's clearing houses, their margin requirements and regulatory safeguards. For example, A and B can decide on a wheat transaction for next year directly with each other (that would be a forward contract) or through an exchange (a ‘futures’ contract). In India, forward contracts in commodities outside an exchange are, unless intended for and closed by delivery, generally illegal. Since the financial crisis of 2008-09 there has been a global push towards promoting exchange-based trading above OTC trading (bringing it closer to the long-standing Indian position). The infrastructure requirements of an exchange and its various stakeholders are acquiring greater significance.
Yet, non-exchange contracts will always remain, primarily because the standardised terms of exchange traded derivatives may not match the specific needs of certain hedgers. The biggest advantage of OTC markets for participants is that terms can be customised.
Apart from this ‘genuine’ reason for using OTC contracts, another motivation for treating contracts as OTC (even when customisation is not needed) is regulation. OTC contracts may be legal but exempted from the regulatory requirements applicable to exchange-traded transactions, in many countries. Therefore, large but semi-standardised ‘OTC’ markets have grown in certain countries and for certain instruments. Many of them use a large number of standardised terms agreed upon by industry participants. Such contracts, though nominally are over the counter, have exchange-like characteristics: they are OTCs for the purpose of avoiding government regulation, but in practice an informal ‘exchange’ or association works.
W. R. Natu, a former Chairman of the Forward Markets Commission and one of the pioneer futures regulators in India summarised the need for regulation in the following words:
The private interest of an operator can … be at considerable variance with the interest of the trade and public interest. It is because of this divergence that the need for regulation arises.
While this was in relation to futures markets, it is applicable to derivatives generally. In addition to the need for regulation in order to secure the public interest, there is also another justification, at a more practical and down-to-earth level, for regulating derivatives. This arises in connection with such matters as which varieties of a particular commodity or financial instrument may be delivered against the futures market, where delivery can be given or taken, how price differences are to be fixed between one variety and another, etc. Generally, regulations on such matters are framed by the exchanges which operate futures markets, and the national regulatory authority does not come into the picture except in abnormal circumstances.
The main instruments of regulation used by the regulatory authorities and/or governing bodies of individual markets for ensuring orderly trading, are the following:
a. Margin variation: As explained earlier in this book, margin is a proportion of the contract value which a buyer or seller in the futures market is required to put up against his transaction. The purpose of margin is to prevent defaults. The higher the margin the greater the amount of capital which is locked up against a particular transaction and, therefore, the higher the cost of the contract. Increase in margins is an inducement to reduce the volume of trading, and vice-versa. Increase in margin is generally resorted to when the regulatory authorities feel that there is an excess of speculative activity. On the other hand, decrease in margins is prescribed when it is felt that there is inadequate trading activity thus impairing liquidity of the market.
b. Imposition of special margins: Special margins, which are over and above the ordinary margins referred to in (i) above, are generally imposed on only one side of the market-place. For example, when it is felt that there is an excessive amount of speculative buying in the market, it may be decided to impose a special margin on buyers alone.
This book provides a comprehensive but concise treatment of the subject of derivatives. It focuses on making essential concepts accessible to a wider audience. The book eschews complicated mathematics and high school level mathematics is sufficient to understand it. It describes and explains various derivative instruments, their use and pricing, and the functioning of derivative markets. It uses a large number of examples to elucidate concepts and illustrate their real-life application. A distinguishing feature of the book is that it goes beyond the narrow perspective of derivative traders and investors and takes a broader approach which enhances its appeal to a range of readers. This book will be useful for students in the fields of economics, econometrics, derivatives, and finance and financial professionals, bankers and investors.
As briefly mentioned in chapter 10, the price of an option is the sum of two components: intrinsic value and time value.
To recapitulate, the intrinsic value of an American option is:
• For call options: The difference, if positive, between the current price of the underlying and the strike price of the option.
• For put options: The difference, if positive, between the strike price of the option and the current price of the underlying.
The intrinsic value of a European option is the difference, if positive, between the current price of the underlying and the discounted present value of the strike price for calls and vice versa for puts.
As was seen in chapter 10, an option which has intrinsic value is said to be ‘in-the-money’ and one with no intrinsic value is either ‘at-the-money’ or ‘out-of-the-money’. In the case of traded options the premium is usually referred to as the ‘price’ of the option and hence the term pricing refers to how the premium is determined.
As regards the second component, time value, this is due to the fact that even if the price may be unattractive today, future fluctuations may make the option profitable. The time value depends on the interplay of a number of factors:
It is obvious that the longer the period of time, the greater are the chances of price fluctuations and vice-versa. Thus, time value generally varies directly with amount of time left to maturity. This leads to the fact that options are wasting assets: as an option's expiration date approaches, its time value diminishes and eventually becomes nil. The only value remaining is the intrinsic worth, if any. Therefore, if an option is not sold or exercised by the expiration date, it becomes worthless. (This is important from an investor's point of view: in contrast to options, underlying assets like shares can be held indefinitely.)
Extent of the difference between current price and strike price
An option which is deeply out-of-the-money has a lower time value than an option which is only slightly out-of-the-money. A deep OTM option has a much lower probability of ever becoming profitable than one which is slightly OTM for the same maturity period.