VZZ Bites The Dust: VIX Plunge Triggers Automatic Redemption

For the second time this year, an exchange-traded note will be redeemed by the issuing institution after the intraday indicative value declined to less than $10. According to a press release from Barclays, VZZ’s IIV dipped below the $10 level shortly before noon ET on Friday; the actual redemption date will occur on the fifth business day after the termination was triggered, meaning that those holding VZZ will get paid out by July 11. Despite the triggering of the automatic redemption threshold, trading in VZZ remained active throughout Friday’s session. The note dipped as low as $9.68 on the day, apparently reflecting confusion over the floor on the fund created by the redemption event. It’s possible investors were engaging in “panic selling” after news of the redemption broke; those savvy enough to snap up shares below the $10 price will make a nice arbitrage profit once redemption payments are made [...] Click here to read the original article on ETFdb.com. Related Posts: Reviewing All The VIX ETF Options Talking VIX And Volatility ETPs With Nick Cherney Examining VIX ETF Performance During A Sell-Off VelocityShares Debuts Its Lineup Of VIX ETNs Disappearing ETF? XIV Split Leaves Some Puzzled