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Thread: Short Volatility Funds Implode

  1. #1
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    Short Volatility Funds Implode

    Seven years of market smashing returns wiped out in a single day.

    XIV, SVXY, short volatility trade blow up, erasing almost $3 billion - Business Insider

    XIV.jpg

    $XIV conversation

    https://finance.yahoo.com/quote/XIV/community?p=XIV

    Black Monday for VIX ETPs leaves retail players smarting

    https://www.reuters.com/article/us-u...-idUSKBN1FQ261

    Credit Suisse says it will end trading in the volatility security that's become the focus of this sell-off

    https://www.cnbc.com/2018/02/06/the-...nt-plunge.html
    "It's virtually impossible to violate rules ... but it's impossible for a violation to go undetected, certainly not for a considerable period of time." Bernie Madoff
    https://www.facebook.com/pages/Scam-...98399986981403

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    re: Short Volatility Funds Implode

    Investors suffering loses on these products should be especially cautious of a https://en.wikipedia.org/wiki/Reloading_scam, from anyone claiming to be able to help you recover losses. This includes attorneys that want to charge up front fees.

    What we are seeing now is the same as we saw in 2012, in fact this is the same firm. I don't know what their terms are, but anything other than contingency and I wouldn't risk it.

    Lawsuit filed against Credit Suisse for VelocityShares TVIX ETNs debacle
    https://www.etfstrategy.co.uk/lawsui...rm-etns-66447/

    June 9, 2014 Opinion or Order of the Court OPINION AND ORDER. For the reasons in this Opinion and Order, Defendants' motion to dismiss the CCAC is granted in its entirety.
    https://dockets.justia.com/docket/ne...cv04191/397158

    Wolf Haldenstein Adler Freeman & Herz LLP announces that a federal securities class action lawsuit has been filed in the United States District Court for the Southern District of New York against Credit Suisse Group
    https://globenewswire.com/news-relea...es-Distri.html
    "It's virtually impossible to violate rules ... but it's impossible for a violation to go undetected, certainly not for a considerable period of time." Bernie Madoff
    https://www.facebook.com/pages/Scam-...98399986981403

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    re: Short Volatility Funds Implode

    Personally, can't say if there was any manipulation although that seems to be a go to when things don't go as investors expect. The VIX bounced from 14 to 50 in a matter of days.

    VIX.jpg

    This trade was extremely overcrowded and had been for some time. The bounce from 14 to 50 is what happened as traders of all stripes raced to cover their losses.



    Aug. 16, 2017

    Traders are doubling down on one of the market's hottest trades - Business Insider

    Bets on falling volatility now ‘most crowded trade’: fund managers Jan 16, 2018

    https://www.marketwatch.com/story/be...ers-2018-01-16


    Keeping things simple. Investors were betting on the continued drop in the price of the VIX and the roll yield. If they sold $14B worth of futures, suddenly they had to buy them back at $50B. In other words one day they owed $14 Billion, two days later they owed $50 Billion. That accounts for the closing of the fund as laid out in the prospectus. Absent actual fraud or mismanagement on the part of Credit Suisse I'm not clear where investors have a leg to stand. Hence don't pay upfront fees on the illusion you will be getting a phat refund check.
    "It's virtually impossible to violate rules ... but it's impossible for a violation to go undetected, certainly not for a considerable period of time." Bernie Madoff
    https://www.facebook.com/pages/Scam-...98399986981403

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    Re: Short Volatility Funds Implode

    Dan
    2 hours ago

    https://finance.yahoo.com/quote/XIV/community?p=XIV

    Is this the only class action suit?

    SHAREHOLDER ALERT: Levi & Korsinsky, LLP Notifies Investors of an Investigation Concerning Credit Suisse Group AG’s VelocityShares Daily Inverse VIX Short Term ETNs
    February 07, 2018 04:53 PM Eastern Standard Time

    NEW YORK--(BUSINESS WIRE)--Levi & Korsinsky announces it has commenced an investigation concerning Credit Suisse Group AG’s VelocityShares Daily Inverse VIX Short Term ETNs (NASDAQGM:XIV) recommended by full-service brokerage firms and advisors.

    https://www.businesswire.com/news/ho...fies-Investors


    Paul
    1 hour ago
    Robbins Geller Rudman & Dowd LLP
    The Rosen Law Firm
    Bronstein, Gewirtz & Grossman, LLC
    Klayman & Toskes

    I read one of these and they were focusing on people that were professionally advised to be in this instrument. Tha hill may be easier to climb but itss not my case.


    "If you are aware of any facts relating to this investigation"

    SHAREHOLDER ALERT: Bronstein, Gewirtz & Grossman, LLC Announces Investigation of Credit Suisse Group A.G. (CS) | Markets Insider
    "It's virtually impossible to violate rules ... but it's impossible for a violation to go undetected, certainly not for a considerable period of time." Bernie Madoff
    https://www.facebook.com/pages/Scam-...98399986981403

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