Global events fail to rock dispersion trades

Yuriko Mita
Yuriko Mita, BAML

Despite recent market woes, dispersion trades continue to be popular with sophisticated market players such as hedge funds, according to dealers.

Dispersion trades involve investors selling a variance swap on an index and buying variance swaps on the constituent stocks, giving them a short correlation position. In other words, the investor would profit if the individual stocks move in an idiosyncratic way, with variance for those stocks rising more than the index.

In essence, the trade benefits

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact or view our subscription options here:

You are currently unable to copy this content. Please contact to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to View our subscription options


Want to know what’s included in our free membership? Click here

This address will be used to create your account

What gold's rise means for rates, equities

It has been several years since we have seen volatility in gold. An increase in gold volatility can typically be associated with a change in sentiment and investor behavior. The precious metal has surged this year on increased demand for safe haven…

You need to sign in to use this feature. If you don’t have a account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here