Thiam said of which the product’s prospectus made clear the idea was meant for daily trading rather than long-term holding, emphasizing of which investors were warned about the potential risks.
“the idea’s not a proper investment vehicle,” Thiam said. “So we also said because of of which, because the cost can vary so brutally, the prospectus says of which if the cost goes down 80 percent, we can close the idea.”
When the VIX went through a low of 17 points to end the day at 38, the value of the instrument (the XIV) went through 100 to 5. “along with once you’re at 5, given the structure of the note, there will be no prospect of recovery … The product was basically not usable anymore,” he added.
The Switzerland-based bank announced last week of which the idea has experienced no losses through its financial instrument. Instead, the idea appeared the fallout was squarely borne by investors holding the product.