Dispersion trades weather AI selloff, for now
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Gamma-weighted versions of the popular trade gained almost 7% as single-stock volatility surged
Equity dispersion trades have largely weathered Thursday’s tech-led stock market plunge, with some defensive versions of the strategy gaining almost 7% on the day as single-stock volatilities surged.
The most common versions of the trades – which pair a short position in S&P 500 volatility with a long position in the volatility of top constituent stocks with equal vega exposure on both two legs –
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