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More on the collapse in TVIX : "The long term expected value of your ETN is zero. If you hold...

More 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)
Comments (22)
  • montanamark
    , contributor
    Comments (1444) | Send Message
     
    stay away
    toxic
    22 Mar 2012, 05:20 PM Reply Like
  • Marlin Keith DeBramaletta
    , contributor
    Comments (262) | Send Message
     
    Who is the market maker for the ETN (Exchange Traded Notes)? Isn't their a financial advisor who is regulating the use of the notes as a strategy in a portfolio, rather than a strictly long term hold strategy. The only reasonable investment that does not require consistent management of the funds is a savings account or a checking account. There are those that want to preserve income and make a long-term investment. So will they ever assign TVIX and/or wealth of holders of the ETN to a asset management entity and let them do their job?
    22 Mar 2012, 05:22 PM Reply Like
  • SoldHigh
    , contributor
    Comments (1013) | Send Message
     
    These "ultra" ETFs are 100% garbage with slippage that means the long-term price target is -0-.
    22 Mar 2012, 05:38 PM Reply Like
  • User 1335761
    , contributor
    Comments (2) | Send Message
     
    I'm wondering what Credit Suisse defines "long term" to be. I've held TVIX for about one month and it's lost about half it's value.
    22 Mar 2012, 07:34 PM Reply Like
  • vision3001
    , contributor
    Comments (212) | Send Message
     
    Hi U13, sorry to hear about your situation.
    22 Mar 2012, 10:12 PM Reply Like
  • realornot
    , contributor
    Comments (1281) | Send Message
     
    You need to watch our threads. We have placed many warnings on TVIX. This thing is for traders on a day to day hedging.
    23 Mar 2012, 10:46 PM Reply Like
  • mikeinnyc
    , contributor
    Comments (65) | Send Message
     
    I have a new system now:

     

    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.
    22 Mar 2012, 09:19 PM Reply Like
  • streetflame
    , contributor
    Comments (137) | Send Message
     
    This approach will fail because a company will reinstate unit creation sooner than you anticipate.
    23 Mar 2012, 08:49 PM Reply Like
  • mikeinnyc
    , contributor
    Comments (65) | Send Message
     
    Think about that just for one second..... from IV and beyond
    24 Mar 2012, 10:13 AM Reply Like
  • mikeinnyc
    , contributor
    Comments (65) | Send Message
     
    Credit Suisse Plans to Reopen Issuance of VelocityShares Daily 2x Long VIX Short-Term ETN (Ticker Symbol: “TVIX”) on a Limited Basis

     

    That explains this hard drop today.
    22 Mar 2012, 10:10 PM Reply Like
  • losingbeta
    , contributor
    Comments (8) | Send Message
     
    My problem was that I was unaware of CS halting share creation back on 2/22. Otherwise I would have never been holding on to this turd sandwich. Obviously something didn't seem right given how it was not tracking the VIX well at all.

     

    Is there to be notified of any other ETNs that would have a similar halt of its underlying assets?
    23 Mar 2012, 02:41 AM Reply Like
  • streetflame
    , contributor
    Comments (137) | Send Message
     
    There is no substitute for due diligence: reading company SEC filings.
    23 Mar 2012, 08:47 PM Reply Like
  • peter6000
    , contributor
    Comments (2) | Send Message
     
    i have lost more than 50%, and wondering should sell it now? And who is buying now. Tomorrow will be more panic. Give it up in fear or loose it all in greed.
    23 Mar 2012, 06:05 AM Reply Like
  • vision3001
    , contributor
    Comments (212) | Send Message
     
    Peter,

     

    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.
    23 Mar 2012, 09:02 AM Reply Like
  • realornot
    , contributor
    Comments (1281) | Send Message
     
    I don't know how you can go to bed and still able to sleep. The past days has been double digits losses. It is now stop at $7.00.
    23 Mar 2012, 10:48 PM Reply Like
  • realornot
    , contributor
    Comments (1281) | Send Message
     
    how far is not too far if market bumps back up again???
    23 Mar 2012, 10:49 PM Reply Like
  • vision3001
    , contributor
    Comments (212) | Send Message
     
    TVIX hit a lot of 7.95 a few hours ago... bringing it close to it's indicative value (TVIX.IV) of 7.83.

     

    See TVIX-TVIX.IV over the past 3 months here: http://bit.ly/GIRAGM

     

    Painful call regarding whether to sell... I share your anxiety.
    23 Mar 2012, 07:43 AM Reply Like
  • jnm3
    , contributor
    Comments (2) | Send Message
     
    Fairly green retail investor here with a question to those experienced with leveraged ETNs.

     

    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?
    23 Mar 2012, 07:14 PM Reply Like
  • streetflame
    , contributor
    Comments (137) | Send Message
     
    Sell immediately and don't look back.

     

    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.
    23 Mar 2012, 08:45 PM Reply Like
  • realornot
    , contributor
    Comments (1281) | Send Message
     
    PPL are using TVIX as an investment vehicle rather than hedging. After the day of stop stocks issuance, this whole vehicle is broken.
    23 Mar 2012, 10:53 PM Reply Like
  • mikeinnyc
    , contributor
    Comments (65) | Send Message
     
    I wouldn't take a 50% plus haircut now. You already got hammered to hell. Now if you need the money get out asap and learn to use tight stops next time. You could of lost some money but not 1/2 or all. "The first loss is the hardest."

     

    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.
    24 Mar 2012, 09:41 AM Reply Like
  • jnm3
    , contributor
    Comments (2) | Send Message
     
    MikeInNYC, StreetFlame, and RealOr Not,
    Thanks for your thoughtful, insightful comments. There is wisdom to be taken from each... JNM
    30 Mar 2012, 01:48 AM Reply Like
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