https://www.zerohedge.com/news/2018-02-07/vol-selling-fund-disintegrates-down-80-2-days
its called picking up pennies in front of a steamroller & its just a matter of time… i personally have been enjoying watching all the idiots on /r/wallstreetbets showing everyone how much money they lost because they are morons
If you invested with them from day one you still made out like a bandit!
I was most surprised by their decision to hedge after the unprecedented vol spike. It looks like the definition of a whipsaw. Crazy. I wonder if management changed since 08-09.
damn i could have opened a fund like this…make my millions in mgmt and incentive fees and then out.
You’re the idiot who doesn’t comprehend trades have time periods, and people take profits. You do this in every post.
Lots of people made money on that fund, look at the chart. 
Yup, it was a scam product, more Wall Street “legal criminality” making up products nobody can comprehend, then marketing them to retail investors.
Stop being an asshole PA
^ Translation: “stop being right all the time.”
Nope, it will continue! 
Yes, and it’s also apparent that they either had some hedging in place to begin with, or focused on medium term VIX positions, i.e. 4 months+, given that they lost “only” 50% of their NAV with this market move.
Generally speaking, short VIX is similar to being long SPX, and the returns of either strategy can be shown to be derived from the same, or at least extremely correlated risk premium. Of course, being short volatility is a much higher leveraged strategy, which explains its higher returns in calm markets.
If you are familiar with the way VIX is constructed, you’d also realize that the index owns more units of downside options (proportional to 1/strike). This means that shorting VIX means you are selling a disproportionately high amount of downside puts, in addition to being short SPX in general. This is partly responsible for the extreme losses of such strategies under market downturns.
This might not have been in their hands. It’s reasonable for most hedge funds to have some kind of capital preservation procedure when they lose a lot of money. Under these circumstances, I think it’s also appropriate for funds to become extremely risk averse with respect to further short term losses. After they lost 50%, losing another 50% (leaving the investor with a 75% loss) would be worse than it would be good to regain 50%. Stopping the loss would protect the fund management from a certain amount of malpractice or fraud accusations, and would still let some investors walk away with long term gains, if they so chose to.
i dont understand - they got buried on this trade and somehow im wrong? or are you defending the idiots posting online that were short vix and owe 10’s of thousands to their brokerage because they were too stupid to understand leverage? or your just going out of your way to be a prick. you see this chart and applaud that some people made money yet in other posts you mock ackman who has a chart similar to this. be consistent - that said being wrong and getting buried doesnt make them horrible investors just the same as it doesnt make those small funds that got it right and made a windfall geniuses like the internet makes them out to be
These VIX guys must be really smart after all they sold Volatility as an asset and made millions of dollars in short # of years and when the fund lost ~90% of the money…They still kept their millions…
In the hedge fund and institutional investor world…I would not be surprised if these guys open up another VIX fund or just a plain hedge fund in the near future.
It was already explained to you, learn how to think/read.
PA, you can not be a douche for one day of your life maybe
Douches are people who post replies without reading/understanding the post they are replying to.
Under that definition I’ve never been a douche for one day of my life.
Just stop insulting people for one day, PA. You can do it! (I think)
I’m senior analyst around here, the bar is set where it is, get to work and quite whining.
I’m the PM here…Now give me those damn executive summaries and models I asked you to create last night. Quit talking and just deliver or else I will tell my daddy, CIO, about your incompetence.
#FTFY
i agree. his whining is superb.
Quite.