The volatility spasm that gripped financial markets in early August led to the biggest one-day spike in the 30-year history of the Cboe Volatility Index, or Vix.

But while equity indexes and options markets rapidly regained their poise, the episode has left more lasting questions for risk specialists at hedge funds and asset managers. Namely, how can risk models cope with these short-lived, freak events?

The Vix spike was largely missed by some traditional close-to-close risk models that are