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Dispersion Pods ‘Soul-Punched’ In Wall Street’s Latest Vol Shock
On Wednesday, Bloomberg reported that multi-strategy hedge funds managed to get through August largely unscathed.
The linked article documented "steady returns" for multi-strat firms, but noted that "tough trading conditions" did result in some liquidations and scattered pod casualties.
Note that the dispersion trade -- which, simplistically, funds longs in single-name vol with index-vol shorts -- is a pod shop favorite. Basically, the trade looks to exploit the disparity between surface-level
And to think that I had foolishly believed that the price action was in response to investors reassessing their projected earnings forecasts!
Great piece. Thanks H.
And thanks for including “soul-punched” from McElligott. How many more of those strikes can the dispersion “strategists” take before fear takes over?