{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2026,10,13]],"date-time":"2026-10-13T06:48:09Z","timestamp":1791874089385,"version":"4.3.4"},"posted":{"date-parts":[[2026]]},"group-title":"SSRN","reference-count":0,"publisher":"Elsevier BV","license":[{"start":{"date-parts":[[2026,1,1]],"date-time":"2026-01-01T00:00:00Z","timestamp":1767225600000},"content-version":"unspecified","delay-in-days":0,"URL":"https:\/\/creativecommons.org\/licenses\/by-nc-nd\/4.0\/"}],"content-domain":{"domain":[],"crossmark-restriction":false},"short-container-title":[],"abstract":"<jats:p>Two mechanisms can make the handedness of an option-implied volatility surface larger than its cause: a non-linear transmission of client demand imbalance, and self-reinforcement, in which handedness raises the hedging pressure that produces it and drives a vanishing imbalance towards near-total dominance. We study both within an arbitrage-free framework. Option prices are generated by an intermediary's pricing measure, which tilts a reference law by the risk-weighted payoff of the client positions the intermediary absorbs, subject to keeping the index a martingale. With demand imbalance e and a relative risk weight q on netted opposite-handed positions, the odd part of the tilt is proportional to 2e and the even part to (1 + e 2) + q(1-e 2). A handedness measure normalised by the even surface, such as the chirality index \u03c7(T) = \u03a3k\/\u03a3kk, therefore follows the netting curve 2e\/[1 + e 2 + q(1-e 2)], amplifying for q &amp;lt; 1, while the risk-reversal index \u03c7 L is linear in e for every q: the non-linear effect is a property of the normalisation, not of the transmission of demand, unless netting acts on the odd part of the tilt. For self-reinforcement, a model of downside and upside hedging pressure with mutual netting and relative-value reversion reduces exactly to a pitchfork whose symmetric state loses stability at total pressure H* = 2\u03b4\/d. The absence of arbitrage adds two restrictions. Bounded handedness with shocks that vanish at the no-arbitrage bound is admissible only if relative-value reversion is at least as large as the shock variance, so arbitrageurs keep the pressure state admissible and, through a monotone map from pressure handedness to surface handedness, keep a self-amplifying surface within the no-arbitrage bound on handedness. And because the pricing-measure drift of every implied volatility is fixed by the second moments of the index, self-reinforcement can reach the surface only through a feedback from handedness to the spot-volatility covariance, to the even part of the surface or to the premium for handedness risk. We state testable signatures for each mechanism and the conditions under which spontaneous and intermediated handedness can be told apart.<\/jats:p>","DOI":"10.2139\/ssrn.7593204","type":"posted-content","created":{"date-parts":[[2026,10,13]],"date-time":"2026-10-13T06:04:36Z","timestamp":1791871476000},"source":"Crossref","is-referenced-by-count":0,"title":["Non-Linear Effects and Autocatalysis in Financial Chirality&amp;nbsp;An Arbitrage-Free Treatment of Amplified and Spontaneous Handedness on the Volatility Surface"],"prefix":"10.2139","author":[{"given":"Jerome L","family":"Kreuser","sequence":"first","affiliation":[],"role":[{"vocabulary":"crossref","role":"author"}]},{"given":"Ramasastry","family":"Ambarish","sequence":"additional","affiliation":[],"role":[{"vocabulary":"crossref","role":"author"}]},{"given":"Lester","family":"Seigel","sequence":"additional","affiliation":[],"role":[{"vocabulary":"crossref","role":"author"}]}],"member":"78","container-title":[],"original-title":[],"deposited":{"date-parts":[[2026,10,13]],"date-time":"2026-10-13T06:04:36Z","timestamp":1791871476000},"score":1,"resource":{"primary":{"URL":"https:\/\/www.ssrn.com\/abstract=7593204"}},"subtitle":[],"short-title":[],"issued":{"date-parts":[[2026]]},"references-count":0,"URL":"https:\/\/doi.org\/10.2139\/ssrn.7593204","relation":{},"subject":[],"published":{"date-parts":[[2026]]},"subtype":"preprint"}}