A trader works in the Cboe Volatility Index (VIX) pit on the floor of the Cboe Global Markets Inc. building in Chicago, Illinois, U.S. (Photographer: Daniel Acker/Bloomberg)  

As VIX Surged Again, Traders Bet on Credit Suisse Leveraged Note

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(Bloomberg) -- During Monday’s equity rout, investors were not only back to betting on volatility’s return, they were doing so using a leveraged security from the firm at the nexus of last month’s stock selloff.

As a jump in the VIX spurred activity across volatility-related securities, the exchange-traded product that had the highest volume was the VelocityShares Daily 2x VIX Short Term ETN. Known by its ticker TVIX, it’s a leveraged product issued by Credit Suisse Group AG -- which was forced to redeem a note linked to stock swings in February.

Almost 71 million TVIX shares changed hands as the VIX surged as much as 38 percent on Monday, outpacing all other volatility-linked securities and the highest volume among U.S. ETPs, excluding funds tracking the S&P 500 Index and Nasdaq 100 Index.

To be sure, the TVIX was nowhere near the top by value exchanged. The iPath S&P 500 VIX Short-Term Futures ETN, ticker VXX, was the most traded by that metric. But the Credit Suisse security, which has plunged each year since inception and now offers more leverage than its cousin UVXY, rallied almost 18 percent, taking its 2018 gain to 46 percent.

Four of the 10 ETPs with the highest volume on Monday were linked to volatility, data compiled by Bloomberg show. UVXY posted its biggest inflows since November last week.

©2018 Bloomberg L.P.

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