The obscure volatility security that’s become the focus of this sell-off is halted after an 80% plunge


Last night I (and many other people) learned all about XIV. (Thankfully I didn’t have to learn about it the hard way.)

(From CNBC)

Multiple exchange-traded securities that are supposed to be bets on calm markets were halted Tuesday morning after losing the majority of their value overnight.

The VelocityShares Daily Inverse VIX Short-Term exchange-traded note (XIV), which had fallen roughly 85 percent in after-hours trade, has been halted pending news early Tuesday. The security, issued by Credit Suisse, is supposed to give the opposite return of the Cboe Volatility index (VIX), the market’s widely followed turbulence gauge.

Credit Suisse said late Monday ET that the XIV’s plunge would have no “material impact” on the Swiss bank itself, though a source familiar with the news told CNBC that the investment bank was considering redemption of the ETN but had yet to make a final decision.

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