Florida Man Who Raised $100 Million To Short The VIX Likely Returning To Old Job At Target

[1a2b3cppp]

Then, 1,200 to 55 maybe they are reverse splitting it.

 

[prc117f]

This is why I practice strong risk management and protect my principal/trading capital. People just get too greedy and complacent and start to believe they are some super genius who discovered some edge that never fails.

Thats a big mistake.

 

[prc117f]

What's the point of creating a product that's designed to fail? How is it different from Madoff scam? Or a hedge fund which blew investors money? Onl a few lucky ones would survive. Only CS is a guaranteed winner. Makes me wonder if they even feel bad. Are they going to miss their brainchild?

Its not designed to fail. Its an Intraday product. Your supposed to close out your position before the end of the trading bell.

Its like those leveraged funds that trade the S&P,Dow,QQQ components.

I myself did not trade it since I do not like ETNs and those funky products. I prefer to keep it simple SPY ETF and associated options for hedging etc.. Some folks like them because its supposed to be like driving one of those self driving cars. There are other ways to short Volatility without using these exotic ETNs.

 

[i960]

The obvious counter argument to this is that it's an institutional tool for hedging, that should not be denied to retail....to which I say, institutional can hedge directly with the futures contracts anyway, and retail too. Then at least there's a facade of understanding of the risk involved. I wonder how many XIV-ers would have 'owned' the equivalent position if they had to do the futures spread themselves and saw what that short really was.

Small quibble, XIV, SVXY and the such aren't trading spreads. They're trading a basket. Had they traded the M1-M2 spread the results might have turned out differently but that's aside the point.

People are completely able to read the prospectus and learn the product. There is no false advertising, no deception, no misrepresentation. Just because someone is going to throw their money at something they don't understand doesn't mean the rest of us have to coddle them. Coddling produces weakness, let the people who understand things excel and don't force them down to the lowest common denominator level by controlling what they can and cannot have access to.

 

[d08]

What's the point of creating a product that's designed to fail? How is it different from Madoff scam? Or a hedge fund which blew investors money? Onl a few lucky ones would survive. Only CS is a guaranteed winner. Makes me wonder if they even feel bad. Are they going to miss their brainchild?

The point was to allow intraday hedging (and other intraday strategies). You're never supposed to hold it past close. Keep asking basic questions that have already been answered...
Why would they feel bad? If a drunk driver crashes his car, is the car company supposed to feel bad about it? Why?
Is the detergent company supposed to feel bad when imbeciles eat laundry pods?
End result is a society of 5 year olds.

 

[gkishot]

The point was to allow intraday hedging (and other intraday strategies). You're never supposed to hold it past close. Keep asking basic questions that have already been answered...
Why would they feel bad? If a drunk driver crashes his car, is the car company supposed to feel bad about it? Why?
Is the detergent company supposed to feel bad when imbeciles eat laundry pods?
End result is a society of 5 year olds.

Where does the prospectus say exactly, you are not supposed to hold it overnight?
They have to feel bad b/c their product is nothing but a flight by night scheme. Opened on Friday, defaulted on Monday. I know I would.

 

[d08]

Where does the prospectus say exactly, you are not supposed to hold it overnight?
They have to feel bad b/c their product is nothing but a flight by night scheme. Opened on Friday, defaulted on Monday. I know I would.

VelocityShares website:

The ETNs are riskier than securities that have intermediate- or long-term investment objectives, and may not be suitable for investors who plan to hold them for a period other than one day. Any decision to hold the ETNs for more than one day should be made with great care and only as the result of a series of daily (or more frequent) investment decisions to remain invested in the ETNs for the next one-day period.

Their products did EXACTLY what they were supposed to be doing. Anything else would've meant they are diverging from the prospectus.
So if they do exactly what was promises - "sue them!". If they diverge from the plan to attempt to control volatility - "sue them!".

 

[gkishot]

VelocityShares website:

The ETNs are riskier than securities that have intermediate- or long-term investment objectives, and may not be suitable for investors who plan to hold them for a period other than one day. Any decision to hold the ETNs for more than one day should be made with great care and only as the result of a series of daily (or more frequent) investment decisions to remain invested in the ETNs for the next one-day period.

Their products did EXACTLY what they were supposed to be doing. Anything else would've meant they are diverging from the prospectus.
So if they do exactly what was promises - "sue them!". If they diverge from the plan to attempt to control volatility - "sue them!".

Yes, a flawed flight by night business model. Riskier does not mean 0. 0 = default.

 

[d08]

Yes, a flawed flight by night business model. Riskier does not mean 0. 0 = default.

Long term expected value has always been 0 and no 0 does not mean automatically assume default.

 

[gkishot]

Long term expected value has always been 0 and no 0 does not mean automatically assume default.

In my book 0 means they blew it and have to close down their product/business consequently harming the business of the traders/counterparties. They have to compensate for liquidating the product. Shouldn't counterparty risk be compensated?