Blog•Feb 18, 2026
Dispersion Trade ‘Cash-In’ Risks Index Vol Spike
A historic surge in dispersion across large‑cap U.S. equities has pushed the one‑month change in average S&P 500 constituent values to unprecedented levels. The spike stems from a confluence of early‑year sector rotation, the AI disruption theme, and divergent earnings outcomes. This volatility surge has heightened cash‑in risk for dispersion traders who rely on relative price moves. Market participants are now watching the dispersion index closely as volatility spikes threaten existing hedges.
