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Market Extra: Ex-regulator says warnings for risky volatility bets should be in ‘big, bold 24-point font and in red letters’

As a popular bet on market calm on Wall Street imploded, capsizing mom-and-pop investors and institutional investors alike on Monday, calls for stronger disclosures of the dangers inherent in some Wall Street products have intensified.

The VelocityShares Daily Inverse VIX Short Term ETN XIV, +6.86% known by the symbol XIV, had ballooned to a value of about $2 billion, but coughed up nearly all of it, sinking to around $15 million when the measure of volatility that it tracks, the Cboe Volatility Index VIX, +3.65% saw a record spike. The plunge in XIV came as the Dow Jones Industrial Average DJIA, -1.03%registered its largest point decline in history and the S&P 500 index SPX, -0.81% logged its ugliest percentage drop since Aug.

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