Market Currents
More on the collapse in TVIX : "The long term expected value of your ETN is zero. If you hold...
-
Thursday, March 22, 2012, 5:08 PM ETMore on the collapse in TVIX : "The long term expected value of your ETN is zero. If you hold your ETNs as a long term investment, it is likely that you will lose all or a substantial proportion of your investment." That line from the Credit Suisse prospectus is bolded and underlined. Don't say you weren't warned. (h/t Kid Dynamite)
Other date
Latest Articles
This news story has 22 comments:
toxic
Halt on Creation Units = BUY HARD at market both legs and wait for 90% vig then dump and short.
TVIX is now the 2nd poster child for this.
Hopefully, those that lost there a$# will look into the mirror and blame themselves only because that the one person you can blame.
Remember if you just spent 3 seconds to check the .IV you would of never done this trade. Right?
If you went long TVIX last week and understood the IV you should go to rehab.
That explains this hard drop today.
Is there to be notified of any other ETNs that would have a similar halt of its underlying assets?
Short-term reversal for UVXY, VIX and VXX is evident.
http://bit.ly/GLWyQn
While the chart for TVIX is gloomy, it should be noted that TVIX is now catching up with it's indicative value. The implication here is that if the other VIX-related counters are in the reverse mode, TVIX probably should not fall too far off it's indicative value.
See TVIX-TVIX.IV over the past 3 months here: http://bit.ly/GIRAGM
Painful call regarding whether to sell... I share your anxiety.
This is hard to admit (and swallow), I'm long above $20. I've looked in the mirror and accept responsibility. I've learned a valuable, expensive lesson.
Okay? So with TVIX 're-calibration' complete, what's to be done? Sell n walk now? Or hold n wait for an exogenous catalyst to drive up the VIX?
Green retail investors should not be hedging. They should just buy and sell high quality stocks (or ETFs or mutual funds if you prefer an indexing strategy).
If you ever want to hedge in the future, do it with puts, short positions, or 1x short ETFs. Simple stuff with a much lower price tag.
The only thing a patient TVIX holder could do now is a GTC or at or above cost basis and scale out as she falls. Yeah, she probably reverse split soon. Your lucky in that the most you can lose is your TMV not so in the futures game. You can lose more than you have. "Trading Places" - Eddie Murphy
You would be surprised when and IF Volatility comes back. It comes back hard and fast. In your case due to contango premiums you should hope the options on SP start to widen as panic or protection appears. Watch the BOND market carefully for those rates to come up.
So far the VIX forget TVIX, has been hammered just about everyday and now we sit at fresh highs on the Dow. I'll be perfect on my death bed but even today I still learn every day. I've seen this picture before many times. Just think rational forget the losses.
Would you buy protection right now given the DOW JONES at 13000K plus? and PUT/Call ratio at 1:1 basically on Total Options and for VIX; That's the 64,000 question.
Me personally, I would but not just yet. I am planning to take a long position in Vol even though I know low volatility can't predict direction but enough position just enough to cover the tail. If she drops I'll just scale out but I will react something you will learn.
Once the market starts to roll down, ONLY then do we go hard or go home just like TVIX.
Hope this helps.
Thanks for your thoughtful, insightful comments. There is wisdom to be taken from each... JNM