Reported 5 months ago
The article discusses the growing popularity of a once-niche stock trade called dispersion, traditionally favored by hedge funds and volatility players, which has now become one of the largest options strategies on Wall Street. The strategy involves profiting from differences in volatility between an index like the S&P 500 and its individual components. As more investors flock to this trade due to its performance in a market with rising interest rates, concerns are rising about diminishing returns and the potential erosion of arbitrage opportunities.
Source: YAHOO