Delisting of Credit Suisse ETN's (TVIX and others)

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pcsrini
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Delisting of Credit Suisse ETN's (TVIX and others)

Post by pcsrini »

ETN's linked to the VIX, and other ETN's are being delisted by Credit Suisse, but may still trade OTC(?). If TVIX as an example was used as a hedge, would it be the best course of action be to sell now before the delisting ?

https://finance.yahoo.com/news/credit-s ... 30929.html
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vineviz
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Re: Delisting of Credit Suisse ETN's (TVIX and others)

Post by vineviz »

pcsrini wrote: Tue Jun 23, 2020 3:22 pm If TVIX as an example was used as a hedge, would it be the best course of action be to sell now before the delisting ?
Absolutely sell now. Or yesterday.

After delisting, your note basically enters a purgatory.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch
annu
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Re: Delisting of Credit Suisse ETN's (TVIX and others)

Post by annu »

vineviz wrote: Tue Jun 23, 2020 3:44 pm
pcsrini wrote: Tue Jun 23, 2020 3:22 pm If TVIX as an example was used as a hedge, would it be the best course of action be to sell now before the delisting ?
Absolutely sell now. Or yesterday.

After delisting, your note basically enters a purgatory.
Just curious, what is the reason for delisting? They do have ~1 billion dollars.
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pcsrini
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Re: Delisting of Credit Suisse ETN's (TVIX and others)

Post by pcsrini »

This does seem to happen fairly often with ETN’s. Staying away from these products is probably best.
viewtopic.php?t=316431
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vineviz
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Re: Delisting of Credit Suisse ETN's (TVIX and others)

Post by vineviz »

annu wrote: Tue Jun 23, 2020 11:49 pm Just curious, what is the reason for delisting? They do have ~1 billion dollars.
It's not clear: Credit Suisse isn't saying (not really) so any rationale you encounter is largely speculative.

Dave Nadig speculates that they just don't want to be bothered managing the risk anymore.

https://www.etftrends.com/looking-into- ... y-of-tvix/

But as he points out, this is a pretty s*** move by Credit Suisse:
But the real problem here is this: Credit Suisse is doing the single worst, least consumer-friendly version of “closing” that’s possible in modern markets. They aren’t letting the product go (because $24 million in fees is hard just to turn off), instead they’re sending individual shareholders into purgatory, trapping their money into an arcane system nearly guaranteed to be suboptimal. Eventually, TVIX will actually disappear. But until then, Credit Suisse has chosen the crassest, most cynical version of “closure” available to them.

It is, honestly, shameful.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch
Fortune Seeker
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Re: Delisting of Credit Suisse ETN's (TVIX and others)

Post by Fortune Seeker »

Back in 2012, they got cold feet and just stopped issuing new shares for a while, which caused TVIX to trade at massive premiums because people still wanted the product.
Ahhh, so that's what caused it's weird outperformance in 2012! I was looking at TVIX a while ago and that period seemed unusual.
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pcsrini
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Re: Delisting of Credit Suisse ETN's (TVIX and others)

Post by pcsrini »

Interesting titbit. TVIX is now traded as TVIXF OTC due to the delisting and seems to be trading with sufficient liquidity. Quoted from the article below:

"20,000 Robinhood Accounts Own TVIX. Not to pick on Robinhood shareholders again, but it looks like many of them failed to close out their positions by the delisting date."

https://www.thestreet.com/etffocus/mark ... s-delisted
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