Normal brain: there is a variance risk premia to be earned Genius brain: volatility can only go down Galaxy brain: ~*~ volatility might go negative ~*~pic.twitter.com/CaK7MomC9J
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This is from the WSJ write up of Infinity Q Diversified Alpha, the mutual fund that misvalued a bunch of weird equity derivatives to hide a $500m losshttps://www.wsj.com/articles/behind-the-mysterious-demise-of-a-1-7-billion-mutual-fund-11618911000 …
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One of the misvaluations was, uh, marking a profit on a variance swap position that would only have been possible if volatility had traded negative 
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Income statement fails to compile
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if i cooked the books i would simply not mark my positions outside of theoretical bounds. this also kinda proves that this guy had no idea what he was doing
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When you run out of storage for your vol deliveries and are forced to sell front-month futures at negative prices they'll be laughing all the way to the bank
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This is a fun game we play in the office: In what scenario could the price of asset X go negative? “Shitty regulatory model forcing fire sale to clean out balance sheet” works for everything. Bet you we will see entities pay to have options taken off them in our lifetimes.
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I've seen butterflies sold for negative premium to take off strike risk
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Negative vol, data feed collapses in upon itself?
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I feel like we said the same thing about oil, too. I get that they're not the same, but they're not so different either.
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