How Credit Suisse Blew Up the (XIV)
Date: 2/8/2018
Source: The Mesh Report
I feel like I have been robbed, and then robbed again. I received notice today from Credit Suisse, the issuer of the Velocity Shares Daily Inverse VIX Short term ETN (XIV), that it is resorting to a forced liquidation of the fund (see note from the company below). All investors will receive cash value for their holdings sometime after February 20. The last NAV they had on their screen was $4.00 a share, compared to the previous day’s close of $99.00. (XIV) is currently trading at $6.50.
Credit Suisse has the right to commit this theft thanks to a “poison pill” provision buried in the prospectus. This provides for a forced call of the shares during any single 80% decline of the net asset value in a single day… read more
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The Astonishing Story Behind What Really Happened to XIV
Date: 2/6/2017
Source: cmlviz.com
During the market’s closing hour on Monday, February 5th, some sort of “flash crash,” likely triggered by margin calls, attacked the CBOE Volatility Index (INDEXCBOE:VIX), also known as the “fear index.” Whatever it was, the VIX went from 17% to 37% in a matter of two-hours, or up 115%. That is the largest percentage gain in the VIX in one day ever recorded.
Even then, while that is a huge move, it wasn’t really market disruptive in any great way other than, the market had a bad day. But then the after hours margin calls came in — and that was an unmitigated disaster for one particular instrument of interest to us: Credit Suisse AG – VelocityShares Daily Inverse VIX Short Term ETN (NASDAQ:XIV)… read more