Is there that volatility adjustment formula or was I not careful enough? I've got problems with understanding plain English (and other languages), only formulas are sufficiently clear for me.
No volatility adjustment formula as such. From the appendix, there is σ’=sqrt[2(r−µ)], but this refers to the real world drift coefficient µ, for which there is no readily available market value.
Quants I guess like to base everything off of market prices and exercise no input from their own judgment ... which is good work if it pays well.
But also ultimately equivalent to working in library stacks, returning books to their proper places. Which really shouldn't pay terribly well.