VIX-Related ETPs Go Wild in After-Hours Trading in Wake of Rout
The market frenzy hasn’t ended in one corner of the market -- exchange-traded products are getting hammered too.
(Bloomberg) -- The market frenzy hasn’t ended in one corner of the market -- exchange-traded products tied to the Cboe Volatility Index are getting hammered in late trading as investors scramble to unwind bets on market calm.
The VelocityShares Daily Inverse VIX Short-Term ETN (ticker XIV) has plunged 81 percent in late trading after falling 14 percent during the session. The VIX, whose move the product is meant to mirror, surged 115.6 percent Monday as U.S. equities suffered the biggest selloff in 6 1/2 years.
Other volatility-related ETPs, like the ProShares Short VIX Short-Term Futures (ticker SVXY), which was halted for five minutes at 3:07 p.m. in New York, and the ProShares Ultra VIX Short-Term Futures (ticker UVXY) showed similar patterns in late trading.
To some extent, these securities may just be playing catch-up to the indicators on which they’re based. For instance, the iPath S&P 500 VIX Short-Term Futures ETN (ticker VXX) gained 33 percent on Monday, while the VIX soared 115 percent. The VXX has continued to climb in post-market trading, shooting up as much as 48 percent since the close.
To contact the reporter on this story: Joanna Ossinger in New York at jossinger@bloomberg.net.
To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Eric J. Weiner
©2018 Bloomberg L.P.