Opera Trading Capital Sells 9912 Shares of Credit Suisse AG

It's Going To Be A Wild Day For XIV The Credit Suisse Volatility ETN

Instant View: US stock slide drags S&P down 5 percent from January record

The VIX is owned by the CBOE.

Credit Suisse wasn't the only Wall Street actor impacted by the sudden surge of volatility. She didn't elaborate on the fate of the product.

The last day of trading for VelocityShares Daily Inverse VIX Short-Term exchange-traded note (XIV) will be February 20, according to an announcement from Credit Suisse.

Shorting volatility, or betting on calm stock market conditions, had been one of the most successful trading strategies until Monday, when a massive selloff in USA stocks derailed some popular short volatility exchange traded products (ETPs).

"If they lose more than 80% of their value, the sponsor has the right to liquidate and they should, or they take on the risk". Read The Big Picture every day to understand the action of the major averages and leading stocks. It pulled in nearly $1 billion in just the first five weeks of this year, while the VelocityShares Daily Inverse VIX Short-Term ETN has added almost $750 million over the same time frame.

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The VIX, or so-called fear index, is a widely observed indicator for investor sentiment in the stock market and measures the expected or implied volatility of large-cap stock options traded on the S&P 500 index.

Monday's slump in the USA stock market may have been painful for those betting against volatility in prices, but traders who took opposite positions hoping to gain from a sharp move are likely to laugh all the way to their banks.

About 16 percent of VIX futures volumes in 2017 are traceable to the fund that Credit Suisse is closing and another one, the ProShares Short VIX Short-Term Futures ETF, according to a note from Barclays Plc analyst Jeremy Campbell.

"If the price of the underlying futures contracts increases by more than 80 percent in a day, it is extremely likely that the Inverse ETNs will depreciate to an Intraday Indicative Value or Closing Indicative Value equal to or less than 20 percent of the prior day's Closing Indicative Value and will be subject to acceleration", according to a prospectus.

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