Surviving skew

Man with umbrella under stormy skies

There's a saying that lightning never strikes the same place twice. Tell that to equity derivatives traders. Painful memories of the 2008 market dislocations were evoked in May this year, as banks were presented with a remarkably similar set of violent upsets in volatility, skew, dividends and correlation.

In the second half of 2008 and early 2009, a spike in volatility and correlation, combined with a collapse in dividend expectations, was disastrous for virtually all dealers. Turmoil was parti

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