The overall point is that the statement that quants don't understand price distribution is a laughably-ignorant thing to say. Joseph de la Vega described how the Dutch options traders priced them in the 1600s, and they were aware of fat tails even then. But blithering about how Those Evil Big Guys are stupid, and hyperfocusing on the mistakes of the few (while the majority of the industry goes on quietly making huge profits) will always be popular. After all, there's endless amounts of butthurt to be soothed among the losers... so they're always ecstatic to hear about professionals making mistakes.
Sure. As a general/non-mathematical treatment (but a rather good description of options trading on the Dutch Bourse nevertheless): amazon . com/Confusion-Confusiones-Portions-Descriptive-Amsterdam/dp/1614274517 (Posting this with spaces in the URL because the ET editor converts it to an invisible Amazon link. Grf.) Somewhat more specific descriptions of Amsterdam grain dealers using options and forwards: https://www.researchgate.net/public...Futures_Trading_and_Options_Trading_1550-1650 I'm having a bit of trouble finding Professor Sprenkle's modification to the Bachelier pricing formula (his doctoral thesis, I believe), but it was specifically intended to codify log-normal distribution as part of that formula. It's worth noting that the pricing had been done "by hand" for ages, and accounted for skew, etc. by hands-on, master-to-journeyman training - as Taleb refers to it, "techne rather than episteme" - but was being reduced to formulae by people like Bachelier and Sprenkle among others. That should be a good start, and will lead you to other authoritative literature.