Increased structured product sales reboot Asian dispersion market

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There has been a sharp uptick in dispersion trades in Hong Kong and Japan this year as growth in structured product sales has left dealers with increased long vega exposure on their exotic books which they have then looked to offload on to hedge funds.

Dealers estimate that single-stock uridashi issuance in 2013 will be nearly double last year's figures, meaning that banks have already built up long vega positions from their Japan equity derivatives books which they have been aggressively recycl

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