Hedge funds pile into Japan dispersion trade

Rise in single stock uridashi issuance drives trade

Stock exchange

Increasing retail appetite for single stock uridashi structured products in Japan has driven a spike in dispersion trading by hedge funds as dealers look to the sector as a way to hedge their long vega positions.

The 2013 bull market phase of Abenomics saw the benchmark Nikkei and Topix indexes rise by more than 70%, whereas this year they are both roughly flat following a period of volatility early in 2014. However, some single stocks have continued to flourish – particularly those with an expo

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