RIP young derivative, your gains were too good for this market

RIP young derivative, your gains were too good for this market

Press F to pay respects

Other urls found in this thread:!/the-xiv-is-going-to-be-the-first-big-etf-blowup-and-credit-suisse-is-getting-hit-hard-20180206

VIX was a meme

on that note someone should make a VIXcoin

sorry faggots, you can't just invent some fucking graphs and then sell it to people after all

I would by the dip at the open tomorrow if I could find a way to wake up at that hour

There is no dip user, it's gone

Can you explain it better

How on earth does anything lose 80+% of its value after-hours?

And just how screwed is Credit Suisse from this? Are they going to need a bailout to walk away from XIV going belly-up?

it got liquidated because it suffered an 80% loss

which after having like 500%+ gains was inevitable, but kind of stupid

Was just wondering this. If it totally broke off of the underlying index that bad it's insane. Market fucking destroyed the model lol.

i dont understand how the huge drop happened after hours since the vix skyrocketed during regular trading hours. Perhaps they settle a large number of trades after hours only. No idea.

Credit Suisse stands to lose about $530MM


It's a derivative that shorts volatility, when volatility goes down or stays steady the ETF goes up, when volatility goes up the ETF falls. It uses 3-5X leverage so if volatility increases a certain amount it gets wiped out.

Volatility was up 115% today, XIV was wiped out, it was up 450% since inception back in 2011 and it lost everything in a single day

Someone explain to me wtf this VIX is like I'm 5 please

Considering how risky it was and failure was inevitable eventually, I'm sure they were prepared for this day and hedged, if not then they mcfucked up pretty bad

> -84.41%

>preparing for anything
>even being remotely competent
They're a walking disaster

>I'm sure they were prepared for this day and hedged

If 2008 has taught us anything about corporate banks, in all likelihood they didn't.

they might just expect to get bailed out in situations like this

It isn't the VIX it is the XIV, the inverse VIX. It's about to be LIQUIDATED.

The elephant sleeps well tonight.

VIX is the Volatility Index, it spikes up when stocks drop fast, and keeps edging lower when stocks are in a long rising trend, as has been the case since Trump took office.

XIV is an etf derivative that is inverse VIX. So people investing in XIV are betting that volatility will keep edging lower and lower since they think stocks are going to keep going up or remaining stable. That paid off great during Trump's first year, and then this huge drop happened and killed the ETF overnight since it was an unprecedented rise in the underlying VIX index.

>inverse VIX
lmao this is more fake than shitcoins

Why would anybody actually hold XIV? What is the value, it either moves like an index fund would or it drops out -100% in a few hours, theres no way its worth the extra gains. Holding that shit sounds like dodging falling knives 24 hours a day

Welcome to derivatives, this is how banks go bellyup

Not sure why anyone would hold it long term. I can see holding it as a hedge or if you think there is going to be a sharp downward movement in volatility.

I'm a total noob but
hedging = reduce risks
low volatility = low risk

why would you hedge against low volatility? fuck

this lmfao

welcome to the over 1 Q U A D R I L L I O N dollar derivative bubble

and you thought 860 billion was a bubble

How is taht even possible though? What the hell is a 'sharp downward movement in volatility'? Thinking everybdoy will just stop trading one day and no prices will move at all? What a stupid concept

The vix index tends to rise and drop very sharply. So if you can time these rises/drops you can make dough in the etf derivatives. E.g. when this current downturn reverses, VIX will plummet like a rock. Traders will try to time that to make big moolah on vix put options and other derivatives.

Sounds like way too much risk for any potential reward, today completely killed anybody no matter how much profit they had accumulated lmao

Today was fucked, we went from record low volatility to 2008 financial crisis volatility in like 3 days

pretty accurate statement

well somebody is holding bags, its not like everybody got out at the perfect moment, somebody had to buy the gods who sold perfectly

>It's trading at around $15 after hours and a notice on the EFTs website said the net-asset value is just $4.22. If that's all correct, it's basically worthless. It's a similar story in SVXY, which is a similar ETF from ProShares.

>if you can time the market you can make money

Lots of people got out last week

Even simple algorithms can prevented losses

>Credit Suisse statement on $XIV: "The XIV ETN activity is reflective of today's market volatility. There is no material impact to Credit Suisse."

CS got away clean

Good old 90% gap down and liquidated

>buy the "dip" while everyone else dumps
>lose everything instantly

i agree its a fools game trying to time the VIX

theres a whole subreddit dedicated to trading this shit lmfao


You would literally be betting on the market suddenly freezing over and little to no price movement, not a rosy prospect after today

wow bizarre what is this website, does this guy only do this for XIV? interesting concept, i wonder what he will do from now on lol