That is an interesting question...
Let's consider a few things:
Arbitrage allows an ETF/ETN to stray from its Indicative Value based on supply and demand. So we know they are not locked into the IV because of that.
TVIX is already trading at a premium, i.e., above it's NAV, and has shown it can and will do that at anytime.
When an ETN is trading above its NAV, there is a tendency for some to short it in anticipation of it dropping in price to re-align with its NAV. That actually happened in TVIX already as everybody already knows.
CS is only issuing new creation units on a limited basis and only to select brokers. So we know there are only a set amount of "shares" available.
Now, what can happen:
It is anticipated volatility will continue to increase. As such, TVIX would be expected to increase in value.
The "premium" has been shrinking to the point the risk of a collapse as a result of CS resuming the issuance of new creation units is negligible.
As TVIX becomes more attractive to additional traders again because of the increasing volatility and greatly reduced premium, demand will increase.
Also, TVIX shorters will need to unwind their positions since the risk is shifting to that side of the trade.
With more traders and shorts both wanting to buy shares from a set amount of shares that are available, the only way to accommodate these buyers is to entice those that already hold shares to sell, which can only be accomplished by TVIX's trading price going up. That would have to be a rather high price since most of those who hold TVIX know what it is capable of when VIX futures go into backwardation.
TVIX will trade at a substantial premium again because of this short squeeze. And since it has done it before, it will have no problem doing it again.
It's all about supply and demand, so yes, I believe TVIX will see at least $20.00 again if not more as long as volatility keeps increasing.
I even added to my TVIX position under $7.40 today in pre market.
wow..that was really wonderful explanation of why this ETN could go up, your posts are very detail oriented, thanks for sharing info with everyone here. by the way, i got some of TVIX today @7.60 and i'm holding them hoping for the best.