November 22, 2024
ETF dispersion set for election revival #NewsETFs

ETF dispersion set for election revival #NewsETFs

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ETF dispersion set for election revival – Risk.net





Risk.net

Sector-based approach to popular vol trades boasts cheaper entry cost than classic version, proponents argue


US-election-ETF-dispersion.jpg

Dealers are pitching a long-derided version of the equity dispersion trade which could benefit from sector rotations that typically occur ahead of US presidential elections.

While classic dispersion trades see investors pair a short position in the volatility of a major index – typically the S&P 500 – with a long position in the volatility of a group of single stocks, a sector-themed alternative replaces the long stock vol position with a long volatility position on sector-based exchange-traded

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