Thursday March 22, 2012
TVIX should be up today but it is down, something is wrong. An alert reader sends us this update.
My apologies for suggesting a fund of futures we will avoid all such arrangements in the future. I own 300 shares.
Credit Suisse, the sponsor behind the VelocityShares Daily 2X VIX Short-Term ETN (NYSEArca:TVIX), temporarily suspended creations of shares of the exchange-traded note because assets in the security had grown beyond what the bank, in a press release, called "internal limits."
While Credit Suisse officials weren't immediately available to elaborate on the press release, it appears that the halting of TVIX creations has nothing to do with any sort of limit imposed by regulators.
What is clear is that the ETN's assets have been expanding rapidly in recent weeks. TVIX had $691.8 million in assets as of Feb. 21, according to data compiled by IndexUniverse. The ETN had just under $500 million in assets only two weeks ago.
"This suspension does not affect the early redemption rights of noteholders as described in the pricing supplement," Credit Suisse said in the press release. It stressed that other ETNs it issues aren't affected by the halting of TVIX suspension.
Volatility products related to VIX futures have grown in popularity since the market meltdown of 2008-2009. They are regarded as portfolio insurance because they spike in value when stocks are in full retreat. A double-exposure product that competes with TVIX, but in an ETF wrapper, is the ProShares Ultra VIX Short-Term Futures ETF (NYSEArca:UVXY). It now has about $27 million in assets.
One of the oldest and most successful VIX-related ETN is the iPath S&P 500 VIX Short-Term Futures ETN (NYSEArca:VXX). It had just over $1 billion in assets as of the Feb. 21 close.
I opine that to get the home loans from creditors you should have a good reason. However, once I've got a commercial loan, because I wanted to buy a car.
Posted by: Christina26Day | March 23, 2012 at 02:32 AM