Articles Posted in Exchange-Traded Notes

The US Securities and Exchange Commission is reviewing the VelocityShares 2x Daily VIX Short Term Exchange Traded Note (TVIX) that collapsed last week, right after it climbing nearly 90% beyond its asset value. The drop came not long after Credit Suisse stopped issuing shares last month. Now, the Switzerland-based investment bank says it will start creating more shares.

Also known as TVIX, the VelocityShares 2x Daily VIX Short Term Exchange Traded Note is an exchanged-traded note that seeks to provide two times the daily return of the VIX volatility index. With the note’s value hitting nearly $700 million up from where it was at approximately $163 million in 2011 and now crashing down, The TVIX has taken investors for quite the ride.

Investor advocates are saying that more should be done to protect retail investors. There is growing concern that with the rising popularity of ETNs, investors and financial advisers are getting into these products without fully understanding them or the risks involved. Financial Industry Regulatory Authority has said that it too will look into the “events and trading activity” that led to the collapse of the TVIX note.