Unhedged Call Options Can Lead To Technical Debt

Technical debt metaphor can be a good thing as it will need executives to look for better options to make finances work better. It can also be encouraged by tax breaks. Call option is selling someone with the right to an agreed quantity at an agreed price and not the obligation. This enables to reap the profit when the price is low and suffer a loss when the price rises. To avoid such situation, you can either arrange another party to acquire the same at the same rate and create a stock. If you do not do so, you will only collect the premium and suffer loss later. This theory is called unhedged or naked call.

Call Option Is Better

So, it is clear that call option is a better model than debt for faulty codes as it is meant to capture the unpredictability of it. If you introduce a feature and never see that code again afterwards, then you are ahead and can reap the premium. In such a case, it would have been foolish on your part to spent time trying to clean it up. On the other hand, you can come up with new features for which you have to spend some time fixing it. Moreover, if your team is not able to fix the code and ship it in time, you lose business and your action is called.

Unhedged Call Options Can Lead To Technical Debt

It Is Less Risky

If you face serious tech debt, it is very costly to fix things cleanly. It also takes much of your time and you not only lose business but also fall behind in the race. By taking call option properly, you can both save time and money as well. If your system is messy, it is bound to have a number of naked or unhedged calls. Each call can cost you a fair bit of amount in terms of money and time. Just like the impact it has in the financial market, it has the same effect in software companies as well. Until there is any failure, it is well and good, but as soon as there is one, you need to take call option.

Refactoring Is An Option

With the passage of time, it becomes hard to change or fix codes unattended and you cannot keep up with the competition. In such a case, refactoring is most suitable call option. This will give you more options as to where you can take your code later since you have bought a premium now. This is an elementary activity in various aspects of business, including software management and development. If you know what is going to happen in the future, you do not have to spend any money now.

Take Proper Call

Just like best consolidation loans save you from debt trap; it is thus necessary to take proper call in order to deal with faulty codes and delivery dates which are implausible. If you have tech debts then you do not have to worry as it is manageable just like any other tool. If you try to deal with the unhedged calls, then you can successfully pay off your technical debts as you will see then that debts are not just bad codes, but are all about dealing with naked calls with proper call options.