The controversial financial product known as XIV is shouldering a lot of the blame for the recent flash crash that saw the Dow slump more than 6% in a span of six minutes. Dave Mazza, Head of ETF Investment Strategy at OppenheimerFunds, was with us to break down the theory that volatility-based products fueled the market meltdown.
The XIV is meant to produce the opposite returns of the volatility index, which spiked 118% Monday. Mazza explained that 2017 was a great year for stocks with record-low volatility. Due to this low volatility, many investors were feasting on these financial products, looking to benefit from volatility going lower. When the exact opposite happened, those investors dealt with the consequences.
"A lot of people like to point the finger at computerized trading for sharp movements in stocks," said Mazza. He said it's only one piece of the story. Mazza highlighted that fundamentals are important to watch and there are many variables that influence stock movement.
The return of ‘meme stocks’ don’t mean it’s time to panic about the stock market. If you want something to worry about… look no further than inflation.
Andela is revolutionizing global work for a sustainable future. Their impact includes diverse skills, income growth, & successful hiring in untapped locations.
With Gamestop and other meme stocks back on the rise, it brings to mind some similarities between 2021 and 2024 economically… and that’s not necessarily good.
After 10 years as a men's wear brand, the popular athleisure brand recently launched its women's line, redefining standards and championing inclusivity.
According to the 2024 Acorns Money Matters Report, nearly a quarter of Americans are worried they could become homeless – and don’t know how easy it is to save.
