XIV - How does this

    Posted by zubeldia on 14th of Feb 2018 at 06:33 pm

    XIV - How does this work?

    By now you should all have received the announcement that Credit Suisse is accelerating the closing of XIV to tomorrow, instead of February 20 as initially announced.  The notice I got from Etrade says:

    Due to the forthcoming mandatory redemption of the VelocityShares Daily Inverse VIX Short-Term ETN (XIV) by Credit Suisse, E*TRADE is no longer accepting new opening orders in this security.        

    Customers with open positions can exit those positions prior to the mandatory redemption by placing sell and/or buy-to-cover orders by the close of regular trading hours tomorrow, February 15, 2018.Please note that if no action is taken to close open positions, investors will receive a cash payment on or about February 21, equal to the closing indicative value as of February 15, minus 0.05% fees. The closing indicative value may vary from the closing price of XIV and the final trading date of February 15is subject to change by Credit Suisse based on market conditions.        

    Can someone explain how is this going to work? If I want to sell my shares tomorrow, who is going to buy them? If Credit Suisse is not buying them, who is buying them? At what price? Interesting that today the price was going up. Was that the market-maker driving the price up? How do you explain the price going up all day? Is the price going up because the market-maker is filling limit orders? I don't understand the dynamics of this thing right now. Can someone shed some light?

    I believe Your cash payment

    Posted by cape_rover on 14th of Feb 2018 at 07:39 pm

    I believe Your cash payment will be the underlying value of the options that make up XIV rather than the price of XIV.   Svxy was up a similar amount today

    So if we got slaughtered

    Posted by blayden on 14th of Feb 2018 at 08:23 pm

    So if we got slaughtered on this trade is it better to sell them now or hold them right through?

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