Wall Street's hottest strategy hits its worst moment! Hedge funds crowded into dispersion trades suffer drawdowns, traders wait anxiously for tech earnings to "explode" big volatility.

Zhitong Finance APP has learned that for U.S. equity options traders who have long tracked dispersion strategies, the coming week or so will be a critical window determining their annual profit and loss. As earnings from major semiconductor and artificial intelligence (AI) companies are released in quick succession, combined with the dual macroeconomic shocks of the Federal Reserve's policy meeting and the U.S. midterm elections, whether single-stock volatility can rebound significantly from its recent slump will directly determine the fate of this crowded trade.