Oddly enough I was contemplating iPath DJ-UBS Natural Gas TR Sub-Index ETN (GAZ) puts for breakfast.
The ETN had halted creation of new shares, in essence becoming a closed end fund and started the day at an 80% premium to Net Asset Value.
My mission was to construct a shortable synthetic version of this almost unshortable munchkin ($86 mil. mkt. cap)
Today GAZ traded down 11.25% and according to Morningstar is down to a 58% premium.
Your mission this evening is the opposite. Here's the story from FT Alphaville:
Double trouble in TVIX
What on earth is going on with the TVIX ETN?
Last week we pointed out that there has been a hugely unusual rush into the double volatility ETN — which is managed by VelocityShares but backed by the banking prowess of Credit Suisse. Daily trading volume has also been noticeably high.
Now news reaches by way of Phillip Rapoport at Macro Risk Advisors that strange things are brewing once again at the 2x VXX offering.
As he noted on Wednesday:
TVIX shares outstanding recently eclipsed VXX shares outstanding, leading to a lot of raised eyebrows. (Where is this TVIX demand coming from?) Below we chart the total TVIX vega outstanding and daily vega volumeWhich is pretty crazy in its own right. But it gets weirder still.
Demand has in fact been so great that Credit Suisse has been forced to suspend further issuance until further notice (echoes of what happened to the UNG ETF, though, we should add, for entirely different reasons)....READ IT ALL