Tag Archives: Credit Suisse

Down 50% in 2 Days, TVIX Could Fall More Monday

After the VelocityShares Daily 2x Long VIX Short-Term ETN (TVIX) plunged 30% in Thursday, Credit Suisse, the sponsor of the controversial fund, reopened share issuance on a “limited basis.” The ETF proceed to fall again Friday for a 50% drop over two days.

The Swiss banking giant was blamed for the two-day decline, by Benzinga, because it had temporarily halting new issuance of TVIX shares last month.

“Beginning March 23, 2012, Credit Suisse may from time to time issue the ETNs into inventory of its affiliates to make the ETNs available for lending at or about rates that prevailed prior to the temporary suspension of issuances of the ETNs. Also, beginning as soon as March 28, 2012, Credit Suisse may issue additional ETNs from time to time to be sold solely to authorized market makers,” according to a written statement issued by the bank after Thursday’s close.

Benzinga says “the halt in TVIX share creations may have caused a massive spike in the ETN’s net asset value. The elevated NAV and ensuing plunge in TVIX indicates that, simply put, traders discovered said premium and exploited it.”

TVIX’s slide continued in after-hours trading where the ETN lost almost another 12% and was found at $9 at 8:30PM Eastern Time. That’s by far the the lowest price TVIX has ever traded at.

On Friday, the shares fell 30% to $7.16 on volume of 29.3 million shares, more than twice its daily average volume. That’s 62% of the 46.7 million shares outstanding. And with the shares still 7% above their indicative value of $6.70, according to VelocityShares, the ETN could see another decline on Monday.

ETF Reading List:

China’s PMI Data Could Hinder, Help These ETFs (HAO, FXI, MCHI) (Benzinga)

Happy Water Day? Maybe For Water ETFs (PIO, PHO, CGW) (Benzinga)

Yorkville High Income MLP ETF’s Yield 8.5% On Average (Investors.com)

Seriously? Credit Suisse to Allow New TVIX Creations (TVIX, CS) (Benzinga)

Avoid These ETFs For Now (FXI, TVIX, GDXJ) (Benzinga)


Apparently, I Stole the Show

This isn’t an ETF entry, but I went to this journalism event at BusinessWeek last month. Steve Liesman of CNBC, FLoyd Norris of the New York Times, William Holstein the author of “Why GM Matters” and a guy from Credit Suisse.

Orla O’Sullivan of Bank Systems & Technology seemed to find my question about banker bonuses much more interesting than what the panelists were saying considering she put me in the lead of her story.

The markets may not have been too impressed with Treasury Secretary Geithner’s plan to deal with banks bad loans, but the audience at a recent Columbia University discussion BS&T attended on the economy loved the suggestion of one of the attendees. “Why not give the toxic assets to investment bankers as their bonuses?” financial journalist Lawrence Carrel rhetorically asked a panel partly composed of Pulitzer Prize winners.

After all, the now troubled assets were “their idea,” Carrel said of the I. Bankers. “They’d be taking on the risks but there’s the potential to make money too,” said Carrel, who wrote a recently published book on exchange traded funds, ‘ETFs For The Long Haul’.

And I like the way she adulterated the title of my book. LOL.

Maybe this toxic asset thing is a topic worth pursuing.