Exotic Stock Trade Beloved by Hedge Funds on Wall Street’s Radar
- Firm launches offering to track so-called dispersion trading
- Strategy in demand as Fed hikes create new winners and losers
Cboe Global Markets Inc. building in Chicago.
Photographer: Daniel Acker/BloombergAn under-the-radar options trade beloved by hedge funds pouncing on stock dislocations is entering the mainstream.
The Cboe S&P 500 Dispersion Index (ticker DSPX), created to capture the difference in prices of options between the equity gauge and its underlying constituents, made its debut Wednesday. Cboe Global Markets says it aims to list a futures product tied to the new offering by the second quarter of next year.