This is the story of how Chicago evolved from a wilderness outpost of 350 residents in 1833 to the global capital of derivatives trading.
Why consider volatility as a separate asset class? Because it is endemic.
I use a mathematical model to illustrate the parallel paths traveled by infectious viruses and market volatility.
Option prices, including the VIX index, have failed to provide advance warning of market crashes from Black Monday to last year’s coronavirus crash.