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From: elfrisio (Rep: 495) reply to lostmymoney

Date: 03/22/2012 21:33

Forum: Wall Street Pit - Msg #2251445 - List TVIX msgs

Thread #673377891 (Rec: 0)

Re: WHy has TVIX-IV decoupled from VXX? Anyone explain?

I appreciate the attempted reply but did you even read the question?
It has nothing to do with TVIX BUT instead is asking about TVIX-IV the intrinsic value of TVIX and why that has decoupled so significantly from VXX

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Reply to lostmymoney - Msg #2251444 - 03/22/2012 21:26

Re: WHy has TVIX-IV decoupled from VXX? Anyone explain?

Explained it many times but here we go again...

TVIX does not track the VXX at all. VXX is a 1x tracking of the front and back month VIX FUTURUS.

TVIX is SUPPOSED do the same, but at a 2x rate. However, Credit Suisse eliminated the issuance of new shares back in Febuary, therefore the vehicle traded much like a stock, or a closed - end fund, price determined by supply and demand.

Just like GAZ, TVIX has been trading at a HUGE premium over the NAV of the fund, which is currently in the 8~ range.

This decompression was bound to happen. It still has further to fall.

VXX and UVXY has not changed the course of it what it is supposed to do in its prospectus, so therefore it is more straightforward.

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