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Credit Sussie AG (CS) - Get Credit Suisse Group AG Report said Tuesday that it will recall one of its exchanged traded notes amid a slump in value that has raised questions as to its impact on the bank's balance sheet and the recent surge in Wall Street's benchmark of near-term stock market volatility.

In a statement published shortly before the start of cash market trading in New York, Credit Sussie said it was shutting down the VelocityShares Daily Inverse VIX Short Term ETN after it slumped more than 83% in after-hours trading Monday to $16.39 each in order to prevent the note from having a negative value. The slump mirrored the biggest one-gain for the Chicago Board of Trade's Volatility Index, better-known by its ticker symbol, VIX.X. 

"Since the intraday indicative value of XIV on February 5, 2018 was equal to or less than 20% of the prior day's closing indicative value, an acceleration event has occurred," the bank said. "The last day of trading for XIV is expected to be February 20, 2018. As of the date hereof, Credit Suisse will no longer issue new units of XIV ETNs."

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The Credit Suisse ETN was designed to move inversely with the VIX, which had been trading at multi-year and all-time lows for most of 2017, but spiked to the highest level since 2009 of over 50 points in early Tuesday trading amid the global equity market sell-off.

Credit Suisse shares had earlier traded at the bottom of the Swiss market, falling 4.21% to Sfr17.06 each, as investors question whether losses linked to a specialized market risk product may impact the lender's balance sheet, even as it insisted the "XIV ETN activity is reflective of today's market volatility" and that there was "no material impact to Credit Suisse".

Goldman Sachs (GS) - Get Goldman Sachs Group, Inc. Report had written in an early Tuesday client note that "One of the key debates" in today's action "will be whether Monday's spike in volatility cleared the deck of volatile short-options positions, or is likely to lead to further buying of volatility to cover the significant explicit and implicit short volatility positions across investor types."

Bank of America Merrill Lynch's monthly fund managers' survey, which polls asset mangers in control of more than half a trillion on wealth, has consistently listed the "short vol" trade as one of the market's most crowded. In its January survey, BAML said it overtook long positions in so-called FAANG (Facebook (FB) - Get Meta Platforms Inc. Class A Report , Apple (AAPL) - Get Apple Inc. Report , Amazon (AMZN) - Get, Inc. Report , Netflix (NFLX) - Get Netflix, Inc. Report and Google (GOOGL) - Get Alphabet Inc. Class A Report tech stocks and bitcoins as the most one-sided.