The empirical history of option pricing in the United States, therefore, falls into three distinct phases. The first two phases were described in chapter 6. Before the April 1973 opening of the Chicago Board Options Exchange, and in the first year or so of its operation, there were substantial differences between patterns of market prices and Black-Scholes values. A second phase had begun by 1976 and lasted until summer 1987. In it, the Black-ScholesMerton model was an excellent fit to market prices. … The third phase in the empirical history of option pricing is from autumn 1987 to the present, when the Black-Scholes-Merton model's fit has again been poor, especially for index options, in the crucial matter of the relationship between strike price and implied volatility. The Black-Scholes-Merton flat-line relationship vanished, and it has not returned.

Donald MacKenzie, An Engine, Not a Camera, loc. 902