VelocityShares Daily 2x VIX ST ETN (TVIX)

[OTCRIDER]

...The unpredictable horror of a black swan often occurs following a predictable period of fear. For example, the Black Monday 1987 crash was an unpredictable event that occurred within a predictable crash. In the late summer of 1987 the market was trending lower and financial stress conditions were rising rapidly. Volatility rose even before that fateful Monday increasing from 21.83 at the start of October to 36.37 the day prior to the big crash. By this point, the S&P 500 had already experienced a -14% peak-to-trough drawdown. Many investors ranging from global macro traders to systematic trend followers correctly predicted a crash. Nobody predicted the market would fall -20% in one day or that volatility would peak at 150.

Ironically, if the same price movement occurred today most people would short volatility and buy equities the day prior to Black Monday in anticipation of policy support.

Most crises occur slowly and then suddenly. A devastating earthquake is a tremor that just didn’t stop… and Black Monday 1987 was a crash that just didn’t stop. To this extent sizing long volatility positions into a crisis can yield life changing returns at the right point. Today, due to the actions of central banks, everyone is doing the exact opposite...


"Shadow" Short Convexity: If You Short 'Fear', Be Prepared For 'Horror'
http://www.zerohedge.com/news/2015-10-16/shadow-short-convexity-if-you-short-fear-be-prepared-horror
http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/10/20151016_vol4.jpg