NNT, I'm still waiting for Pat Iuliano at Paloma to get back to me on that compliance issue we discussed. It's been almost 5 years now. How's Spitz doing? Keep in touch?
I have to chime in on this "black swan" idea. The problem is one of deduction, the statement, " no amount of white swans is proof that a black swan does not exist". Lets say that historically the greatest standard deviation dow move is x standard deviations, we have not seen the dow move any more than x standard deviations therefore puts or calls should be priced at x. The chances of Oct, 1987 happening at the time were astronomical. I don't know if this applies to the dow now as there are circuit breakers so the dow could fall only 8.9% as of today's close. I think there is a difference between an outlier and a "black swan" event. For example, global market correlation is an area where one can get burned like the correction last May where everything tanked. Maybe " black swan" as it pertains to trading can be better defined in distinction to an outlier or fat tailed event.
Search my name under google images and you will see the truth. Black Swan in its simplest form is accepting that there are events beyond realms of your wildest thoughts or forecasts ! Its all about probabilities. Remember it may be improbable but not impossible. For this reason Halle Berry is yet to call me.....
You can't go through life losing sleep because you can't disprove that there are no suitcases orbiting Saturn. Likewise, I don't think a person should go through their financial life worrying that a Black Swan event may happen because they have never experienced one. The only way to stop worrying and live sanely is to position yourself so that if a BS event does happen, it won't blow you up. In other words, don't bet the farm, or don't swing for the fences etc. Diversify into non-correlated asset classes when possible.