TVIX and Pissed


You can click on the above chart to magnify the image (and the pain) if you were long this broken, twisted, poorly managed ETN by Credit Suisse.

ETF’s (let’s be clear that this is an ETN) make gobs of money, there is a new one every day it seems. Wanna be short gefilte fish or raccoon pelts? They have an ETF and an app for that. Am I the pot calling the kettle black to a degree because I trade these freakishly aggressive items? Maybe I am, but that doesn’t change what happened today for a lot of traders.

My story:

On February 10, the market was having a bad day. All of a sudden $TVIX started to rip higher. I have been through a few market crashes and a “flash crash” so I bought the ETN. Something was up, right? Greece defaulted again, Israel hit Iran?  I paid about 18.50 and it ran to 21.10. That was the top and it started to implode after that. Why?


It turns out there was a monumental, if not an error of biblical proportions in calculating ( a shortfall) in the amount of shares  that needed to be issued by Credit Suisse.  This is old news. If you call old news two weeks ago . The bee in my bonnet is who knew to begin with? Who knew, and when I ask? And why did the ETN go from 14 to 20 in a day? This move happened before anyone was in the loop. I will defer to the authorities. I love good information, I thrive on it, but really?

Today, while the ETN was starting to die, the news wires reported that Credit Suisse made a statement that the true NAV (net asset value) of $TVIX was really only worth 8.50  a share. Thanks for that. At the time the stock was about 13 . There was nothing to short, I tried. the ETF closed at 10 bucks.

As traders we all opine about how retarded the $VIX really is as a leading indicator. The $VXX is more ridiculous. We now know that the $TVIX was now just a money maker for “the man”. Credit Suisse needs to come clean for their failure on this one, and Mary Shapiro, head of the SEC needs to talk to the trading community right away. By the way, have you heard her voice or  seen her face since 2008?

If you are new to the trading game, NEVER trade these names unless you have guidance.

P.S. Still pissed and I have a keyboard.

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