Photographer: Daniel Acker/Bloomberg

VIX-Related ETPs Go Wild in After-Hours Trading After Rout

Updated on

The market frenzy hasn’t ended in one corner of the market -- exchange-traded products tied to the Cboe Volatility Index are getting hammered in late trading as investors scramble to unwind bets on market calm.

The VelocityShares Daily Inverse VIX Short-Term ETN (ticker XIV) plunged 81 percent in late trading after falling 14 percent during the session. It was halted for trading on Tuesday, pending news. The VIX, whose move the XIV product is meant to mirror, surged 115.6 percent Monday as U.S. equities suffered the biggest selloff in 6 1/2 years.

Other volatility-related ETPs showed similar patterns in late trading. They include the ProShares Short VIX Short-Term Futures (ticker SVXY), which was halted for five minutes at 3:07 p.m. in New York, and then halted on Tuesday pending news, as well as the ProShares Ultra VIX Short-Term Futures (ticker UVXY).

To some extent, these securities may just be playing catch-up to the indicators on which they’re based. For instance, the iPath S&P 500 VIX Short-Term Futures ETN (ticker VXX) gained 33 percent on Monday, while the VIX soared 115 percent. The VXX has continued to climb in post-market trading, shooting up as much as 48 percent since the close.

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