Market Extra: ‘Short-volatility Armageddon’ craters a pair of Wall Street’s most popular trades, could roil market

One of the most popular trades in the market, betting a period of unnatural calm would continue, may have amplified selling pressure in the stock market on Monday market participants said.

At least two products tied to volatility bets were severely whacked with the hemorrhaging that could pose challenges to the exchange-traded notes.

One popular product, the VelocityShares Daily Inverse VIX Short Term ETN XIV, -92.58% was down 90% in after-hours trade on Monday, following a session in which the Dow Jones Industrial DJIA, +2.33% plunged by 1,175 points, or 4.6%, while the S&P 500 index SPX, +1.74% tumbled 4.1%—both benchmarks coughed up all of their gains for 2018.

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