The market is swinging wildly in the wake of coronavirus pandemic, and the biggest hits are taken in many industries; the stock prices are dipping rapidly. As the volatility of the share prices is increasing, the short term profiteering products are increasing bought at a good speed. One such product is the TVIX (velocity shares 2x) ETN and ETPs. According to the current tvix stock news at https://www.webull.com/quote/nasdaq-tvix the short term ETN is being traded at 1000 dollars a share, which is a big jump from the 49 dollars a share.
Coronavirus riling the TVIX assets
Before the covid 19 global crisis market was stagnant and wasn’t moving much, but as the fears start gripping, the volatility rises, and the traders are piling up in the tvix arena as the other stocks are plummeting. Tvix trading in very much like any other stock trading, but it is related to the derivatives movements in the market. This is shown in the cboe volatility index, which is also known as a fear gauge. This is the reason when the fear of pandemic rose, the market fell, but the tvix prices rose.
This can be proved by the fact that after the coronavirus crisis hit, the volatility shot up so high that traders started finding chances to counterbalance the losses and declines. And this counterbalance step leads to increasing the asset funs from $700 million to $6 billion.
Drop-in volatility will be risky
The rise of the prices of tvix is increasing rapidly, in this case, the volatility chooses to drop with share prices increasing; this can lead to major traders’ losses. As the tvix is currently as mentioned by tvix stock news or Nasdaq crsp news at https://www.webull.com/quote/nasdaq-crsp at its best with the financial crisis and higher volatility, but a slight dip in volatility can be costly, especially for the recent level buyers. This is the reason why many experts are telling investors to stay away as it can get severely risky shortly.
It is said that in this scenario, a sudden drop of 20 percent value will trigger liquidation. Also though a sudden large dip in volatility is not possible currently, but in this market, slight changes can be catastrophic as well. Also, currently, the increasing volatility is making the tvix and affiliates to gather up as many derivatives as possible to keep the fund’s exposure in check. With time and changing market scenario, it is safe to say that one should be careful while trading as nobody can be sure of what the conditions will be like.