02Jul11:23 amEST

Smell Ya Later, TVIX

In case you missed it, several levered ETNs will cease trading imminently, with TVIX being a notable name on the list here. In addition, you will note recognizable levered ETFs related to gold, silver, and natural gas such as DGLD UGLD DSLV USLV UGAZ DGAZ will also cease trading. 

That said, the TVIX delisting seems most notable. The VelocityShares Daily 2x VIX Short Term ETN exploded back in late-February throughout most of March, but has since fallen roughly 90% as stocks rallied even as the VIX itself remains historically elevated. 

If you have been involved with markets for at least a few years, then you probably remember some of the short volatility ETF/ETNs imploding back in early-2018. As we often say inside Market Chess Subscription Services, the default mindset we have with any ETF or ETN is to view them as short-term trading vehicles only, win or lose on the trade, to be in and out fairly quickly. In other words, we eschew the notion of buying and holding ETFs for the most part. And that goes double or triple (no pun intended) for the levered ETFs and levered ETNs. 

Now, another issue to consider is whether the delisting of such ETNs like TVIX marks a subtle sign that volatility make be about to stage another spike like we saw in March. Most likely we will not get a whiff of just how viable that thesis is until after the holiday weekend when the heart of summer trading officially kicks into gear. 

For now, we bid adieu to TVIX and friends with the ongoing lesson to treat levered ETNs with the respect they command as deceptive time bombs often working against you far more than for you. 

Headed to the Boat This Summ... If You Can Keep It


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