02/25/2012 Weekend Watering

[Petsamo]

Hey guys, what is the most rewarding investment vehicle for this coming correction?

What correction?

[xfradnex]

Thanks all for a great board. I feel I must contribute on the very intriguing trading of TVIX.

After doing some digging I found that the shares outstanding of TVIX has eclipsed that of VXX hence the premium the market is pricing in. Credit Suisse has said that there has been so much demand for the product that they have had to suspend issuing new shares of TVIX citing "internal limits on the size of ETN's." So therefore, if demand exceeds supply (which it has) TVIX will trade at a premium. Since TVIX is the derivative of VXX, and not the other way around, it begs the question where is the demand coming from when there is more shares outstanding of the derivative than the underlying asset? This explains the price action over the last few days because every man and his dog on wall street wants to trade TVIX. But where it gets fishy and unlawful is who did Credit Suisse notify of the impending issuance suspension? My speculation is that someone in the know has been accumulating large amounts of TVIX with this in mind. Quite shifty indeed.

It looks like volume has been decreasing lately,(Per Dr Al. = lower demand), but still not back to normal. Are we going to get a chance to get some TVIX again at 14. If restrictions are taken off with this volume drop, will price follow? When did the suspension start? This may shed some light on the price action.