The Hate on XIV, SVXY is Unfounded

[zdreg]

There is no point of creating a product and catering it to people in order to dispose of it after a short while. This is what scammers usually do. What if the product just started trading a day before? It would have disappeared virtually overnight. Shame on all involved. Why is it down today while SVXY is up? Nobody will ever know.

unfortunately it is your continuous lack of knowledge about the structure of the products that you trade that is the problem. stop whining. if you read the prospectus carefully you might understand the difference between xiv and svxy. people assume that warnings in prospectus are just boiler plate and can be safely ignored.

 

[beerntrading]

I'm not quite sure what you are trying to say here. Can you give a little more detail into your thought process? My initial impression is that you are referring to the fact that depending on where the VX futures are at (10, 20, 30... ect.) this dramatically changes what will be a 100% gain (or loss), meaning their range is not the standard way you would think about it. This is made even muddier by the fact that the termination event is directly tied to % daily change in XIV, regardless of when you purchased it. So this means that you could technically purchase XIV when it is down 70%, lose an extra 10% of your investment, and have the fund close. Am I correct? Because that is definitely an issue with this ETN.

What I mean is that the ETN's positions (short VIX futures) can decline beyond the ETN's assets. But because it's floor value is limited to $0 (Credit Suisse would, and very nearly did, pick up any losses in excess of the full ETN value). So the perception is that it absorbed 90%+ of it's possible maximum loss, when in reality the loss could have been larger. It's a moot point in terms of disaster because it's CS's problem had losses gone any further--but for the trader considering purchasing this, this makes the less extreme moves look less risky as a total percentage of the ETN's worth.

 

[zdreg]

unfortunately it is your continuous lack of knowledge about the structure of the products that you trade that is the problem. stop whining. if you read the prospectus carefully you might understand the difference between xiv and svxy. you would understand why the xiv is down and the svxy is up today( sometime during the day). . people assume that warnings in prospectus are just boiler plate and can be safely ignored.

 

[beerntrading]

I should probably cross-reference this one with a post from Bob Morse earlier here:
https://www.elitetrader.com/et/thre...ducts-carnage-crushed-some-prop-firms.317973/

Second post in.

As a Merrill Edge client I have access to BOAML's equity derivatives research. In a Feb 6 2018 report they (Benjamin Bowler et al) wrote this:

Thank you for that report! Very interesting information. I had read about that phenomena at one point awhile back but it has obviously gotten worse than I had realized.

 

[gkishot]

unfortunately it is your continuous lack of knowledge about the structure of the products that you trade that is the problem. stop whining. if you read the prospectus carefully you might understand the difference between xiv and svxy. people assume that warnings in prospectus are just boiler plate and can be safely ignored.

You sound like someone who knows the subject very well. Why is XIV down today while SVXY is up?
Since XIV is gone, what are we traders going to do now? We want it back.

 

[NeoTrader]

The woman was served coffee going through the drive through. Other settlements had been agreed to by the company in settlement negotiations with other burn victims at other locations in amounts up to $500k. The location in question had received 700+ complaints (documented in the lawsuit) about the heat of their coffee.

In other words, it was well known that the coffee there was very hot and the place remained open because people still chose to go there for that coffee( no need to ban the place or force them to lower the temperature, that's the client's choice, otherwise, let's ban cars too, because people can get hit by them. Why not ban buildings too? Because people can fall from heights. In fact, let's ban everything, then we can be completely irresponsable and every shit that happens in our lives, we can blame someone else, a company or even "the state")...
People could have simply stopped going there or complained to the owner, who would no doubt lower the temperature of the coffee if that meant pleasing his clients, thus keeping his clients and even gaining new ones. But, it seems that the majority of the costumers wanted that temperature.
In addition to that, it was a DRIVE THROUGH, which means there is a greater chance of spilling things up, compared to sitting on a table... Another well know fact by everybody. Put those things together and the lady took her chances and shit happened, that's not the company's fault.
The same thing applies in markets... People want to risk money, no problem... They should be free to do it and to risk whatever sum they want, right till their last penny, but if things go south, they should have the balls to face the situation.

 

[beerntrading]

In other words, it was well known that the coffee there was very hot and the place remained open because people still chose to go there for that coffee( no need to ban the place or force them to lower the temperature, that's the client's choice, otherwise, let's ban cars too, because people can get hit by them. Why not ban buildings too? Because people can fall from heights. In fact, let's ban everything, then we can be completely irresponsable and every shit that happens in our lives, we can blame someone else, a company or even "the state")...

It's quite the jump to go from reasonable judicial recourse against someone who knowingly allows a dangerous condition to persist to an outright legal ban on water temperatures. That makes as much sense as equating auto liability settlements with a legal prohibition on driving. So, I'm gonna throw the bullshit flag here.

complained to the owner,

...700 times. 700 times they complained to the owner.

But, it seems that the majority of the costumers wanted that temperature.

Evidence?

140º burns bare skin, your mouth can handle somewhere around 160º-ish because of saliva. 180º will burn. It's really a stretch to suggest masochism is the majority opinion during daily commerce.

The same thing applies in markets... People want to risk money, no problem... They should be free to do it and to risk whatever sum they want, right till their last penny, but if things go south, they should have the balls to face the situation.

You're talking about someone being free to assume the risks of the temperature they serve coffee, right?

 

[NeoTrader]

It's quite the jump to go from reasonable judicial recourse against someone who knowingly allows a dangerous condition to persist to an outright legal ban on water temperatures. That makes as much sense as equating auto liability settlements with a legal prohibition on driving. So, I'm gonna throw the bullshit flag here.

Who says this "judicial recourse" is reasonable? To me this is absurd, pure bullshit. The law is fucked up and this is what is killing what was once a great country. People want to hold everybody else responsable for everything, but won't take the slightest responsability for themselves and they use government to do that. The U.S. will become just another shitty country where nobody thinks it is worth risking to open a business because any schmuck may hold you accountable for the stupidest things, like this one, if it continues in this path...

...700 times. 700 times they complained to the owner.

I'm pretty sure the place must have had much more then 700 customers, these were the ones that complained, the others may not have formally manifested their opinion, but they stated their opinion by going back there and the fact that the place remained open proves that these were the majority. Every business will have complaints and it is up to the owner to decide whether he will change something or not based on what will be the biggest number of pleased customers. As I said, since the place was still open, it is only logic that it was pleasing the majority of customers, others could simply choose to go somewhere else.

Evidence?

140º burns bare skin, your mouth can handle somewhere around 160º-ish because of saliva. 180º will burn. It's really a stretch to suggest masochism is the majority opinion during daily commerce.

The evidence is what I just said: the place remained open, if people didn't like it or thought it was dangerous to go there, they could simply have stopped going there and the place would go broke or the owner would realize that the cause of the lower number of clients was the coffee temperature and in his own interest, he would lower it. Additionaly, as I said, the fact that there were these complaints, shows that the temperature of the coffee was no secret.

You're talking about someone being free to assume the risks of the temperature they serve coffee, right?

No, I'm talking about being free to enter a drive through and getting a know very hot beverage. Being in a car, with everything shaking and you usually have no place to place the food and drinks or get food from a window increases the risk of spilling up things.
That's why people usually eat on tables, it's easier and less prone to such and other types of accidents.

 

[beerntrading]

Who says this "judicial recourse" is reasonable? To me this is absurd, pure bullshit. The law is fucked up and this is what is killing what was once a great country. People want to hold everybody else responsable for everything, but won't take the slightest responsability for themselves and they use government to do that. The U.S. will become just another shitty country where nobody thinks it is worth risking to open a business because any schmuck may hold you accountable for the stupidest things, like this one, if it continues in this path...

So we eschew corporate responsibility and claim that all responsibility is personal? I'm all for accountability and personal (and corp) responsibility. This case just isn't it. It made a really good sound byte, but like so many of them, it falls apart when the facts are considered beyond the level talking head. It's fine if you want to parrot a discredited antique sound byte (was vinyl around, or was the recording on wax?), but denial in the face of facts is not.

No, I'm talking about being free to enter a drive through and getting a know very hot beverage. Being in a car, with everything shaking and you usually have no place to place the food and drinks or get food from a window increases the risk of spilling up things.

If only she'd played it safe with a nice cold beer.

We'll have to agree to disagree here. The only thing I'll add is I work insurance where I pay some stupid claims like this (well, not me personally, but companies I represent--though I have settled claims on their behalf). For my part, I view both sides with, "How could you be so stupid to," ... "serve something that dangerous" / "sit and drink coffee in you're car when you're already a septuagenarian." My view of fault here is colored mostly by those who are most able to absorb the payment of damages on this--and viewing that as a cost of doing business (a cost they pay to me!)

 

[NeoTrader]

So we eschew corporate responsibility and claim that all responsibility is personal?

Exactly. There is no such thing as "corporate responsability". As Milton Friedman used to say: "Government doesn't have responsability, a building does not have responsability, ONLY PEOPLE HAVE RESPONSABILITY."

I'm all for accountability and personal (and corp) responsibility. This case just isn't it. It made a really good sound byte, but like so many of them, it falls apart when the facts are considered beyond the level talking head. It's fine if you want to parrot a discredited antique sound byte (was vinyl around, or was the recording on wax?), but denial in the face of facts is not.

You are the one denying facts. It's just dumb to claim that every single accident that happens is the company's fault. They were offering a service and the clients are there voluntarily. Nothing is certain in this life, so it is just stupid to act as if it were.
Shit happens, we all take risks, just by leaving home... You could stay in an never risk getting hit by a car, but you take that chance, because you think it is worth it.
If the company had done something on purpose to hurt her(not very smart far a business to do that) or if they had hidden any data that would not make possible for the client to make a conscious choice, they should be penalized. But that is not the case, as it was already well established here, the fact that the coffee was very hot was no secret.

If only she'd played it safe with a nice cold beer.

No, that's hindsight, she chose to get the coffee in the drive through. Nothing wrong with that, as long as she is willing to take the risks. She could have asked the beer or she could have entered the restaurant and asked the coffee on a table or she could have gone somewhere else, or she could have done what she did. Each option has it's advantadges and disadvantadges. She made her choice.

We'll have to agree to disagree here. The only thing I'll add is I work insurance where I pay some stupid claims like this (well, not me personally, but companies I represent--though I have settled claims on their behalf). For my part, I view both sides with, "How could you be so stupid to," ... "serve something that dangerous" / "sit and drink coffee in you're car when you're already a septuagenarian." My view of fault here is colored mostly by those who are most able to absorb the payment of damages on this--and viewing that as a cost of doing business (a cost they pay to me!)

Well, I'll add here that when insurance companies make money on stupid causes such as these, that's a consequence of bad laws, hence the stupidity. And in these situations, insurance companies act as parasites, feeding on stupid claims from mediocre people. But that's not the insurance company's fault, they are not the ones who create this. As I said, the fault is of the people that are stupid enough to believe that this is justified and keep voting for politicians that pass this ridiculous laws.