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XIV termination event?

  1. I'm not in this but there's lot of talk about the XIV hitting the -80% mark which is a termination event according to the prospectus of the ECN?

    So what's going to happen now? Is it really then end or not?

    Also, what will happen to related products like SVXY or UVXY?

    Discuss.
     
  2. I think that only applies to intraday losses. So an AH loss plus an intraday loss would not result in termination. We are really close though. XIV looks like it's going to get terminated
     
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  4. I wonder how many noobs put their life savings into this?
    it's hard not to laugh, it is such a retarded r:r bet.
     
  5. I shorted it back when it was high 90s and covered at 75. Glad I got out there alive because it went to $146. Aww... Had I got the balls to re-short at $146... shoulda coulda woulda..

    LOL
     
  6. Now we need VIX futures to drop 50% and wipe out UVXY too. Clean slate!
     
  7. do leveraged etfs like TQQQ carry the same type of risk ?
     
  8. T1 (material news) trading halt issued for 3 inverse VIX ETNs this morning: SVXY, XIV, and ZIV.
     
  9. Seriously, could happen.

    What a way to clean house though. Maybe someone hated the retail VIX traders and decided to clean them out. Engineer massive drop. Then engineer massive rally. Short VIX ETN goes first. Then long VIX ETN goes after. All gone like you say.

    Why the retarded rule about terminating at -80% anyway, especially for a short VIX product? I mean, by the very nature of the VIX, which has a tendency to spike, and then drop rapidly, a short VIX ETN is bound to get hosed the moment any volatility comes in. It's a matter of time. Which goes back to the point, why write in a rule of terminating at -80%? Obviously it can happen. It just did. wtf.
     
  10. Presumably the issuer trying to protect themselves and limit their own exposure in the event of a big move like this.
     
  11. the real question is why did the VIX make such a move? there's no reason for it
     
  12. why would buying of the vix futures cause real volatility in stocks?
     
  13. This twitter thread outlines the mechanics of the XIV in simple terms:



    Essentially inverse ETF's are worthless long-term investments and should not be used by retail customers.

    XIV Prospectus.jpg
     
  14. The yuuuge UX front end backwardation suggests hedging of short term moves.
     
  15. a) Because sometimes the tail wags the dog
    b) IV-RV spread can widen, i.e., higher IV does not necessarily mean higher RV.
     
  16. XIV gone. CS announced acceleration event. A lesson for all picking nickels in front of steamrollers.
     
  17. Wow, UVXY just went from 30 to 15. Amazing. VXG8 & VXH8 both down over 30%... 20% to go.
     
  18. XIVH is still trading
     
  19. No, but good question...there'd be a lot more XIV buyers with an account today had they asked this.

    Funds have real assets with intrinsic value. Eventually, as their price drops, it will find a place that a big investor will step in (think Buffett circa 2009) and start buying. As a leveraged ETF, there is a chance of total loss, but it's a very different (much less likely) risk factor, and heavily mitigated by diversity.

    Also, I'm not sure the panic sale of XIV didn't generate a feedback loop that became a self fulfilling prophecy...I.e. The derivatives lead the underlying. We shall see as this one is dissected more.

    The risk on XIV that this could occur was somewhere along the lines of 0.2% on any given trading day (that's a rough calculation a buddy of mine and I worked up yesterday...but should be reasonably accurate). A rare, but ordinary occurrence.
     
  20. Probably not, but the bigly lesson here is to always read the prospectus... The devil is always in the details and there is never any free lunch.
     
  21. That sounds risky and it does not seem like its optionable so you cant short it using a limited risk trade.

    Wow that thing is down to under 8 bucks!

    Just found this article Holy shit! This is why I trade my own capital. you never know what risk management/controls are in place.

    UPDATE: XIV trader: 'I've lost $4 million, 3 years of work and other people's money'

    By Shawn Langlois, MarketWatch

    The VelocityShares Daily Inverse VIX Short Term ETN (XIV) was created to give traders an opportunity to bet against a rise in volatility -- the calmer the markets, the more profitable the trade. And it's been one of the best plays out there amid the bull's long and steady assault on new highs.

    All that changed, however, when the stock market began to seriously flame out last week. The ultimate gut-shot landed Monday when the Dow Jones Industrial Average was smacked with a record-setting retreat. The XIV dropped 90% after hours (http://www.marketwatch.com/story/vo...f-wall-streets-most-popular-trades-2018-02-05) following the selloff, leaving a trail of destruction in its wake.

    Nowhere was the pain more palpable than on Reddit's "Trade XIV" group (), which counts more than 1,800 members. One of them goes by the cyber-handle Lilkanna (https://www.reddit.com/user/Lilkanna), and to say he's had a rough stretch would be a huge understatement.

    "I've lost $4 million, 3 years worth of work, and other people's money," he wrote in a post that's garnering lots of attention. "Should I kill myself?"
     
  22. hey is it worth buying 100 shares as a wager on XIV. 632 bucks its like buying an option at this point. worst case you lose your 632 dollars. I dont trade ETNs or any of these funky type funds. Whats the Cash payment expected? per ETN share.


    Found this info. I guess the closing price Feb 20 is the cash payment you will get.

    On the acceleration date, investors will receive a cash payment per ETN in an amount equal to the closing indicative value of XIV on the accelerated valuation date. The last day of trading for XIV is expected to be February 20, 2018. As of the date hereof, Credit Suisse will no longer issue new units of XIV ETNs.

    Found out its 4 dollars 22 cents
    wow!
     

  23. Whoa, that would happen? Thanks!
     
  24. Why the hell would you buy into something that is going to zero? You ETN guys are crazy.