Credit Suisse shares fell by as much as 8 percent during the European trading day, due to angst that the bank is ensnared in big losses on an exchange-traded note that bets against volatility.
Amid Monday's plunge in US stocks, the VIX surged, but volatility exchange traded notes, such as XIV have a unique feature: The indexes these products track settle after the close of USA markets.
But that all changed Monday when the Dow Jones industrial average lost more than 1,100 points and was down more than 1,500 points at one point. The company, which owns the VIX intellectual property and licenses it to companies that create funds linked to it, reports quarterly results on Friday.
Team Canada leads in Figure Skating at 2018 Olympics
Three-time world champions and former Olympic champions Tessa Virtue and Scott Moir of Canada earned 80.51 to take the lead. The number is far behind their best score of 61.97 set previous year due to problems caused by Min's untied costume.
As Benzinga reported Tuesday, XIV was halted Tuesday, and Credit Suisse subsequently issued a press release saying it will be delivering an irrevocable call notice to The Depository Trust Company for the XIV on February 15.
On late Monday, Credit Suisse said that the XIV drop would have no material effect on the Swiss bank itself. Finally, Bogart Wealth LLC purchased a new stake in shares of Credit Suisse AG - VelocityShares Daily Inverse VIX Short Term ETN in the second quarter valued at $304,000.
Janus Henderson Group plc, which markets the notes and owns the VelocityShares brand, did not respond to multiple requests for comment. It pulled in nearly $1 billion in just the first five weeks of this year, while the VelocityShares Daily Inverse VIX Short-Term ETN has added almost $750 million over the same time frame.
Egypt escalates army operations in Sinai
Schools in North Sinai have been closed until further notice starting Saturday as the army and police continue operations. No group has claimed responsibility for that attack.
Separately on Tuesday, Nomura Securities 8604.T said it will redeem its Tokyo Stock Exchange-listed S&P 500 Vix Inverse ETN 2049.T after a sharp equity sell-off since late last week triggered a massive loss in the product.
The trigger of these feedback loops is the constant rebalancing that exchange-traded notes like the XIV and the SVXY require. A federal appeals court in 2014 ruled in favour of the bank, saying no reasonable investor could have read disclosures for the product without understanding their risk.
'Trump' And 'Kim' Thrown Out Of Opening Ceremony
The meeting took place after Kim Yo Jong and other North Korean delegates attended the Olympics' opening ceremony. He criticized the Trump administration for straining too hard to signal disgust of Kim Jong Un's government.
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