Stocks Extend Losses After Barclays Suspends Sales/Issuance Of Equity, Oil Volatility ETNs

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by Tyler Durden
Monday, Mar 14, 2022 - 04:19 PM

Apparently unrelated to any Ukraine issues, Barclays has announced the suspension, until further notice, of any further sales from inventory and any further issuances of iPath Pure Beta Crude Oil ETN (ticker OIL) and iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX)

According to a press releases, the suspension is because “Barclays does not currently have sufficient issuance capacity to support further sales from inventory and any further issuances of the ETNs”

US equities were already in freefall but accelerated lower after the headlines hit...

And VXX was bid aggressively...

As Vance Harwood explains, the bid for both ETNs is because of this suspension, OIL/VXX may start trading significantly above their asset-based IV price.  It will likely become very difficult to short these products & without shares to short, Authorized Participants can't do arbitrage operations they typical run to drive price down to IV Price.