Crash OF XIV Inverse Stock Split Coming Up?

XIV trader: ‘I’ve lost $4 million, 3 years of work and other people’s money’ – MarketWatch

I read the story above about the huge losses this XIV trader suffered. I’m sure he was not the only one as XIV crashed dramatically this week. This XIV ETN followed the bull market up as complacency dominated the stock market again. I don’t have any sympathy for those that think they are investing in double leveraged products, without thinking how much of a bull trap they were in, in the first place.

Smart money would already have been short, long before this topped out. This XIV crashed all the way down to $6.15 and I don’t think it’s finished by a long shot.  Since it is very close to that magic $5 price level, any inverse stock split is highly likely. Usually we would be looking at a 4:1 inverse split which would price this ETN at about $24.

A simple tight stop loss would have protected most of your gains. Investing for the long term means nothing if we can’t see a potential crash setup, where all gains can get wiped out. The real VIX spiked up just like this ETN spiked down. I’m sure there were tons of stop loss orders crammed under the peak, so it takes very little to roll over and trigger these sell orders.

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