Hedging Demand Halts Issuance of Credit Suisse VIX Note: Options
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Traders rushing to protect against declines in the Standard & Poor’s 500 Index created so much demand for an exchange-traded note tied to equity volatility that Credit Suisse Group AG stopped issuing shares.
Switzerland’s second-largest bank suspended the creation of new stock in the VelocityShares Daily 2x VIX Short-Term ETN on Feb. 21 after its market value more than quadrupled in 2012 to a record $694.4 million, data compiled by Bloomberg show. Shares outstanding have surged 699 percent since Dec. 30 as the S&P 500 climbed 8 percent and posted its best January gain since 1997.