UPDATE: What sort of ETF has a termination event that is triggered in the after-hours to absolutely FUCK everyone is owns it? Moreover, how many active managers just got caught with their pants down like me? It’s all fun and games until your fucking ETF goes to zero in the after-hours.
UPDATE: Apparently, there is a termination clause on these VIX products that permits underwriters to liquidate the product in the event of an 80% move in volatility, which would explain the selling. However, and I must admit, this is the worst ETF fuckery I’ve ever seen. I have 10% of my account in this, so I’m guessing I will lose 10% of my account by tomorrow.
Can’t wait for the death of the short volatility trade which has been pumping this market for sooooo long! $UVXY $XIV $VIX $VXX pic.twitter.com/aXv0TqbDhb
— Sp3cul8r (@sp3cul8r) January 30, 2018
NIKKEI futures are -8% now. Other than that, I have no idea how this is possible, but XIV is now trading at $38 in the after-hours, down from $100.
As you know, I am long XIV, even bought more on Friday at $120 — and now it’s down 70% in after hours trade — a move that I cannot explain. I just got back from ordering sushi. I turned on the teevee and saw XIV scrolling on the ticker. I thought this was the result of a reverse split. But then I looked at the long VIX products, and they’re all up 25-30%.
Redpill me on how this is even possible?
As it stands, this will represent my worst percentage loss of my life — an ironic end to a calm market that knew nothing but upside. The very tool that kept order and emotions in check has dislocated from reality, which could lead to a truly harrowing decline tomorrow.
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Data is chaotic now but key numbers show $VXX IV value at +96.10 % for the day and $SVXY IV down -96.67%. It’s likely $XIV & $SVXY terminated. If so their final values will be set by what value the futures were when they closed out their position. Likely at least down 80%.
AHH
HAHAHAHHAHHAHAHHAHAHHAHAHHAHAHAHAHAHAHHAHHAHAHHH
HAHAHAHHAHAHHAHHHAHAHAHHAHAHAHAHHAHAHAHHHAHAHHA
AHHHAHAHHHAHHAHHAHAHHAHHHAAHHAHHA
Let’s be honest dude- you’ve made no money from this sell off
The timing is unbelievable, almost.
Suppose VelocityShares doesn’t want to liquidate. Sure would tarnish their brand, if anyone notices or cares.
Well, you did say “God is a Patriots fan,” so I guess he is in a bad mood.
the machines have taken over … AI in action .. not good
You were warned. These can gap to zero if futures move over 100%.
Even gave you the equation the other day.
Am I still speaking gibberish?
Hindsight is always 20/20. Get over yourself with the I told you sos.
Hindsight?!? LOL
There is only one rule to follow and you chose to ignore it. Don’t short until after contango.
This was childsplay.
So you *knew* XIV would trade from $120 to zero today?
There’s a difference between saying it would go down and not exist at all. If you cannot grasp the fabric of this difference, go fuck your own face.
I knew it could go to zero
I knew it would be liquidated at -80%
I knew it would have to start at a very low vol level to be possible
I knew most people didn’t know this
Short vol is simple.
1. Wait for contango while suffering FOMO.
2. Short vol when contango is over.
3. Try not to get blown up on the rare double dip.
I remember your cryptic comment(s) a few days ago…wasnt sure what you were babbling about cuz that’s not my forte but yeah, one thing is theory and another is to act on it and plunk cash to do it. Did you?? Prolly not cuz if it went the other way, your ass would have been handed to you behind the woodshed, yes?
Short vol is very simple. Wait for the vol event to happen, then pick up the pieces afterwards.
Doesn’t matter what happens during the event. Could go to VIX 40, could go to VIX 200. I don’t guess that. I just wait for it to happen.
It is the only trade that you do not need to forecast to get right. You just have to deal with the FOMO waiting for it to happen.
Guess I’ll be buying UVXY puts instead of SVXY outright.
What the fuck do you mean ‘short vol’ is simple, you fucking simpleton. It has been the absolute worst trade for a decade. I’d wager you have zero skin in the game and are merely talking out of your ass.
You did not think it would trade to zero. Stop your fucking fat filthy mouth from saying so. You said it’d trade down. Great, you called a trade. Now fuck off and stop being a dick.
@tonka, good for you if you did!!
I was blown up doing the same thing in 2011 when TVIX went up 900%.
Luckily short vol offers incredible opportunities to make it all back up.
meh, just a scratch. a flesh wound at worst. no worries laddies. it’s just a paper loss. same as paper gain. nothing to worry about until you book it (looks at a LBMA gold bar collecting dust and used as a doorstop. nope. still the same size. no shrinkage there) 🙂
Watch your parasite consumption. Take some Albendazole and Mebendazole from AllDayChemist online good sir!
the market maker will short these down to 80% of the close
XIV is a lay-up to 20 or less
VIX Futures settle Feb 15, so expect a bumpy ride for the next 2 weeks
The good news is that all the degenerates will be wiped out, and the big boys can again reign over the stock markets.
all of the vxx etf products are pieces of shit. always have been. just like USO and OIL and such. But that after hours shit is unreal. Wow.
When the markets go to shit you can keep quality, but sell junk.
Crazy that a lot of people I follow were still buying it AH until they realized it might go to $0.
anything can go to zero . there’s people traiding the bounce and gaining 3000$ . jfyi . someoneother sure is making a multiple of this .
…and this is what you call a black swan.
I don’t think it got triggered after hours–the ^VIX jumped 115% today. I think XIV and SVXY were just slow to react to that fact.
derivatives gone awry
xiv and hodl on!
Ha. Might as well, can’t sell it.
Actually, you can. The real bullshit is how does CS sell to some at $50 and others at $20? Kind of a big difference if your’re holding 20k shares.
I’m sure those fucks we’re on the phone at the close telling their buddies to hit the exists at $90, or worse yet, get short at $90. This is some smelly bullshit.
Damn! That is some serious bullshit. Fuckery on the grandest scale. Sorry to hear.. at least it’s only money.
Grande Fuckery, Indeud.
This is why I trade futures only.
Bought Ethereum @ $685…my first crypto purchase
After such a controlled sell off I highly doubt we have seen the crypo bottom. And I don’t expected quick SnapBack after these hodl idiots face their first ass raping
Moral Hazzard time.
Xiv is about a third Feb expiry, 2/3 March. Who knows.
$18.17, and dropping.
12.00
$14.06.
$13.73
$12.40
$11.58
Seems to be holding $10.00 area for now.
What happens if $VIX doesn’t open higher in the AM? Or FED does fuckery?
I read the XIV prospectus. I think what is happening is called “Acceleration Event”:
Acceleration Event: As discussed in more detail under “Specific Terms of the ETNs—Acceleration at Our Option or Upon an Acceleration Event”
in this pricing supplement, an Acceleration Event includes any event that adversely affects our ability to hedge or our rights in
connection with the ETNs, including, but not limited to, if the **Intraday Indicative Value is equal to or less than 20% of the
prior day’s Closing Indicative Value. **
Damn… so if XIV is 20% lower than the previous day’s close, then they have the option to do an “accelerated event” (i.e. liquidate)
NOWHERE in the prospectus does it say anything about after-hours… just INTRA-DAY hours (Is intra-day == after-hours?) You may have something to go on here.
Why avoid rush?
I can only imagine the noise of this is still trading tomorrow with PPT in full force.
you have been naive as fuck man lately
but you can afford loosing 10% of your account ( if half of the things you write is good or not a hype or a lie )
on another note , I wouldnt be surprised at all that someone has been planning exactly this and was targeting this , for a nice gain
Remember reading about manager of Target store , Florida I think, who made big $$$$ with inverse volatility ETF’s. If he did not sell, guess he just plain Target store manager again. Hope he got new red polo shirts.
80% in a day. A trading day?
Any securities lawyers here?
Maybe securities lawyer holding XIV in personal account?
🙂
Gentlemen. On the off chance that the world doesn’t end …observe that oil is still hanging in in the middle $60s while XLE has done a 2/3s retrace from August lows to recent highs and is at Vol by Price support. Bought a couple of oil drillers and bought some XLE near today’s lows. Looking for others for tomorrow if oil continues to hang in.
+16! The righteousness of GAWD shall prevail!!!
AHH
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AHHHAHAHHHAHHAHHAHAHHAHHHAAHHAHHA
Loser
The Dow dropped 1500 and this fucking clown missed it.
showtime,
I’m in agreement that the market is built on dreams and QE, but I think you are celebrating too early. High yield barely moved, which means this is most likely a short term event.
Of course, now that bulls realize that markets can go down, this will put a little fear in them. We’ll probably see another pop near Dow 25k, and then bulls better hope that the middle class spends that tax refund instead of saving it.
agreed. this is just a 6-10% correction before back to all time high. This is a setup. Powell will hike rates. He’s the fall guy. The final crash will happen after this goy takes action. Pull it (extra Silvestein).
Some notes from the XIV prospectus
For XIV, here is the underlying index:
https://finance.yahoo.com/quote/%5ESPVXSP?p=^SPVXSP
Note that the “Daily Index Performance” is 96.12% This equates to XIV “Daily ETN Performance” of approximately -96%,
“An ‘Acceleration Event’ means:
…
(d) if, at any point, the Intraday Indicative Value is equal to or less than twenty percent (20%) of the prior day’s Closing Indicative Value;
…
upon acceleration you will receive a cash payment in an amount (the “Accelerated
Redemption Amount”) equal to the Closing Indicative Value on the Accelerated Valuation Date. ”
The bad news is double: holders (as of today) of XIV will likely receive a cash payout of $4-5/share, and have no chance at any receovery tomorrow. XIV will not be trading tomorrow
TBTF Credit Suisse FTW
Can you say, or do you know why UVXY is now dropping in AH?
I shoudl emphasize that the above is based on **my personal read of the perspectus**. And some other commenters have called me an idiot, so waht do I know 🙂
In tersm of UVXY, initially it rose AH (to $24+). Perhaps now people think volatility will calm down tomorrow.
It’s important to note that ETNs and ETFs are different. XIV is an ETN, while SVXY is an ETF. SVXY also does not have specific “80% down” language in the prospectus.
401k went from +40% YoY to +34% YoY.
There is a delicious irony in how you were mocking “cryptofags” (as you termed them) for the fact their value could drop 60%. Mother market has a way of fucking those who get a little too flippant.
Mother Market has nothing to do with it you superstitious pavement ape.
The Tylers over at ZH have been discussing this possibility for at least a year. Today it finally happened. Honestly, not surprised it happened. Timing it though was obviously next to impossible.