NEW YORK (AP) — A popular Wall Street instrument used to bet against market volatility has blown up in investors' faces.
Swiss bank Credit Suisse said Tuesday it is winding down its so-called VelocityShares Daily Inverse VIX Short-Term exchange-traded note, after it lost 91 percent of its value Monday.
The VelocityShares note was designed to bet against wild gyrations in the market, measured by the VIX, Wall Street's so-called "fear gauge." For years, the stock market was generally quiet so the VIX would trade at low values, making the VelocityShares note a popular way to make money in a low-volatility environment.
But that all changed Monday when the Dow Jones industrial average lost more than 1,100 points.