The Physics of Market Regimes

Markets don’t move randomly—they shift between distinct volatility regimes that determine which strategies work and which fail. In this episode, we explain why volatility clusters, how markets transition from calm to crisis, and how those shifts move the structural edge between option sellers and buyers.

Drawing on a century of market data and the work of Benoit Mandelbrot and Robert Engle, we break down ARCH-style regime analysis, variance risk premia, dealer gamma, and volatility term structures—connecting theory to real trading decisions.

This episode is about understanding what regime you’re in, managing risk through transitions, and surviving when markets change character.