Escalating geopolitical tensions in the Middle East are rattling one of the hedge fund industry’s most widely used options strategies, raising concerns that a sudden spike in volatility could trigger broader market disruption, according to a report by Bloomberg.
The so-called dispersion trade – a strategy that exploits the difference between volatility in a broad index and that of its individual components – has been a popular bet in recent months as the S&P 500 Index edged higher while unde...
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