By Christiana Sciaudone
Investing.com -- A contrarian bet on the stock market is down sharply after word of plans to delist it.
VelocityShares Daily 2x VIX Short-Term ETN (TVIX) tumbled more than 12% after Credit Suisse (SIX:CSGN) AG said it would delist those notes, among other VelocityShares.
The exchange traded note had risen to as much as $950 in March amid growing alarm about coronavirus but is now trading at about $125 as of midday Tuesday. Credit Suisse said the move to delist it was to “better align its product suite with its broader strategic growth plans.”
Consultant Six Figure Investing said that most people buy it as a “contrarian investment, expecting it to go up when the equities market goes down."
The S&P 500 hit a 2020 recent low in March at 2,237.40 and is now at 3,145.36.
ETNs qualify as a liability for the issuing company, according to ETF.com. In 2016, Credit Suisse delisted two ETNs, amid speculation it was trying to clean up its balance sheet. The products can also produce big losses for investors if markets go the wrong way. In 2018, an investor sued Credit Suisse alleging misstatements regarding another ETN that led to losses, CNBC reported. That ETN, the VelocityShares Daily Inverse VIX Short-Term Exchange-Traded Note, which is no longer listed, sank by more than 90 percent within hours following a market selloff.
The delisting of the ETNs will become effective on July 12.