{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2026,10,30]],"date-time":"2026-10-30T07:32:07Z","timestamp":1793345527223,"version":"4.5.0"},"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:\/\/www.uspto.gov\/ip-policy\/copyright-policy\/copyright-basics"}],"content-domain":{"domain":[],"crossmark-restriction":false},"short-container-title":[],"abstract":"<jats:p>The CBOE Volatility Index (VIX) is widely treated as a gauge of market risk, yet it measures only the market's expected volatility over roughly the next 30 days, as implied by S&amp;amp;P 500 option prices. This paper argues that such a measure gives an incomplete picture of systemic risk, because structural vulnerabilities can build during calm periods without appearing in option prices. Drawing on Minsky's Financial Instability Hypothesis, Kownatzki's evidence on the VIX, Adrian and Brunnermeier's CoVaR, and research on margin spirals and short-seller behavior, it proposes Latent Stability Risk (LSR), a conceptual framework organized around three channels of hidden fragility: leverage accumulation, short-seller retreat, and liquidity overconfidence. A qualitative look at 2006-2008 illustrates how the channels fit a known crisis. LSR is intended to complement the VIX, not replace it, and it has not been tested. It is a proposal for future empirical work, not a validated measure or prediction tool.<\/jats:p>","DOI":"10.2139\/ssrn.7667138","type":"posted-content","created":{"date-parts":[[2026,10,30]],"date-time":"2026-10-30T06:51:58Z","timestamp":1793343118000},"source":"Crossref","is-referenced-by-count":0,"title":["The Volatility Illusion: Why Markets Misprice Calm"],"prefix":"10.2139","author":[{"ORCID":"https:\/\/orcid.org\/0009-0006-4732-2025","authenticated-orcid":true,"given":"Adwita","family":"Maheshwari","sequence":"first","affiliation":[],"role":[{"vocabulary":"crossref","role":"author"}]}],"member":"78","container-title":[],"original-title":[],"deposited":{"date-parts":[[2026,10,30]],"date-time":"2026-10-30T06:51:58Z","timestamp":1793343118000},"score":1,"resource":{"primary":{"URL":"https:\/\/www.ssrn.com\/abstract=7667138"}},"subtitle":[],"short-title":[],"issued":{"date-parts":[[2026]]},"references-count":0,"URL":"https:\/\/doi.org\/10.2139\/ssrn.7667138","relation":{},"subject":[],"published":{"date-parts":[[2026]]},"subtype":"preprint"}}