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2021-06-25
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Gamestop In, AMC Out? Which Meme Stocks Will Be Impacted In Today's Russell Rebalance?<blockquote>游戏驿站加入,AMC退出?哪些模因股票将在今天的罗素再平衡中受到影响?</blockquote>
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Which Meme Stocks Will Be Impacted In Today's Russell Rebalance?<blockquote>游戏驿站加入,AMC退出?哪些模因股票将在今天的罗素再平衡中受到影响?</blockquote>","url":"https://stock-news.laohu8.com/highlight/detail?id=1179245434","media":"zerohedge","summary":"As we detailed previously, every June, the Russell Index rebalances by removing stocks that no longe","content":"<p>As we detailed previously, every June, the Russell Index rebalances by removing stocks that no longer meet their criteria (and incorporating recently improving names).</p><p><blockquote>正如我们之前详细介绍的,每年六月,罗素指数都会通过删除不再符合其标准的股票(并纳入最近改进的股票)来重新平衡。</blockquote></p><p> As SpotGamma notes,<b>many traders are starting to discuss the upcoming Russell Index rebalances, and the prospect of GME, AMC or other meme stocks being added to Russell 1000.</b></p><p><blockquote>正如SpotGamma指出的那样,<b>许多交易者开始讨论即将到来的罗素指数重新平衡,以及GME、AMC或其他模因股票被添加到罗素1000指数的前景。</b></blockquote></p><p> Each year in June<u><i><b>(today - Friday, June 25 this year)</b></i></u>the FTSE Russell uses a set ofcriteria to determine which companies stock will be tracked by their benchmark indices.</p><p><blockquote>每年六月<u><i><b>(今日-今年6月25日星期五)</b></i></u>富时罗素使用一套标准来确定哪些公司的股票将受到其基准指数的跟踪。</blockquote></p><p> <img src=\"https://static.tigerbbs.com/8620fa3c3147d2c806038327c9efd6e4\" tg-width=\"947\" tg-height=\"659\" referrerpolicy=\"no-referrer\"></p><p><blockquote></blockquote></p><p> <b>The new constituents will be announced after the bell today.</b></p><p><blockquote><b>新的选民将在今天盘后宣布。</b></blockquote></p><p> There are many ways investors can track these indices, such as through an ETF like IWM.</p><p><blockquote>投资者可以通过多种方式跟踪这些指数,例如通过IWM等ETF。</blockquote></p><p> For massive assets like pension funds, they track by owning the individual stock components of the index.</p><p><blockquote>对于养老基金等大型资产,他们通过拥有指数的个股成分来进行跟踪。</blockquote></p><p> <b>For example if the FTSE adds a 1% weighting of GameStop to the Russell 2000 Index, everyone that tracks the Russell 2000 must buy GME shares. To offset this addition, the Russell will reduce or remove other stock(s) that not longer meet their criteria.</b></p><p><blockquote><b>例如,如果富时指数将游戏驿站1%的权重添加到Russell 2000指数中,那么每个跟踪Russell 2000指数的人都必须购买GME股票。为了抵消这一增加,罗素将减少或删除不再符合其标准的其他股票。</b></blockquote></p><p> <i>*Note: While this post discusses the Russell, the mechanics are the same for the S&P Indices, too.</i></p><p><blockquote><i>*注意:虽然本文讨论的是罗素指数,但标准普尔指数的机制也是相同的。</i></blockquote></p><p> Analysts spend a lot of time trying to assess which stocks will be added or removed from the indices during this annual rebalance.</p><p><blockquote>分析师花费大量时间试图评估在这次年度再平衡期间哪些股票将从指数中添加或删除。</blockquote></p><p> According to the FTSE Russell approximately $16 trillion assets track the Russell indices, so a lot of shares may have to be bought and sold so that all of these various funds conform to the appropriate benchmark.</p><p><blockquote>根据富时罗素的数据,大约有16万亿美元的资产跟踪罗素指数,因此可能需要买卖大量股票,以便所有这些不同的基金都符合适当的基准。</blockquote></p><p> With volume like that, one can see the value of knowing which stocks may be bought and sold <i>before</i> these large funds start their adjustment.</p><p><blockquote>有了这样的交易量,人们就可以看到知道哪些股票可以买卖的价值<i>以前</i>这些大型基金开始调整。</blockquote></p><p> <u>Knowing what stocks will be added or removed from indices, such as Russell, is a huge opportunity for traders</u></p><p><blockquote><u>了解哪些股票将从指数(例如罗素指数)中添加或删除对交易者来说是一个巨大的机会</u></blockquote></p><p> TSLA was a prime example of how traders got ahead of these additions. In late November 2020, it was announced that TSLA would be added to the S&P500 Index. As you can see on the chart below, the stock traded nearly 50% higher from the announcement date to the actual addition date.</p><p><blockquote>特斯拉是交易员如何领先于这些新增产品的一个典型例子。2020年11月下旬,宣布将TSLA纳入标准普尔500指数。如下图所示,从公告日到实际添加日,该股的交易价格上涨了近50%。</blockquote></p><p> <img src=\"https://static.tigerbbs.com/5b5a1b955bc2c60236833e65ad22e8c9\" tg-width=\"1280\" tg-height=\"638\" referrerpolicy=\"no-referrer\"></p><p><blockquote></blockquote></p><p> It’s important to mention that Tesla’s massive move into the index addition was quite an aberration, and traders should not expect ~50% moves for all index events.</p><p><blockquote>值得一提的是,特斯拉大规模加入指数是相当反常的,交易者不应预期所有指数事件都会出现约50%的波动。</blockquote></p><p> <u>Mechanically, this is how an index rebalance trade may take place</u></p><p><blockquote><u>从机械上讲,这就是指数再平衡交易的发生方式</u></blockquote></p><p> <b>Theoretical Example:</b></p><p><blockquote><b>理论实例:</b></blockquote></p><p> The Huge State Pension Fund (like: CALPERS, Texas Teachers, etc.) has $1 billion tracking the Russell 2000 Index. It’s announced that at the close of trading on June 25th, GME will be added to the Russell 2000.</p><p><blockquote>庞大的国家养老基金(如:CALPERS、德州教师等。)有10亿美元跟踪罗素2000指数。据宣布,在6月25日收盘时,GME将被加入罗素2000指数。</blockquote></p><p> Huge State Pension Fund must therefore buy:</p><p><blockquote>因此,庞大的国家养老基金必须购买:</blockquote></p><p> <ul> <li>$1,000,000,000 (AUM) * 1.0% (index weighting) = $10,000,000 notional of GME stock</li> <li>$10,000,000/$225 (GME share price) =</li> <li><b>44,444 shares of GME stock</b></li> </ul> The index fund’s goal is to track the benchmark, and so they often work with bank dealers to try and buy these shares at the close of trading on June 25. Accordingly, bank dealers may start to build an inventory of shares in the days leading to the actual rebalance.</p><p><blockquote><ul><li>$1,000,000,000(AUM)*1.0%(指数权重)=$10,000,000 GME股票名义价值</li><li>$10,000,000/$225(GME股价)=</li><li><b>44,444股GME股票</b></li></ul>该指数基金的目标是跟踪基准,因此他们经常与银行交易商合作,尝试在6月25日交易结束时购买这些股票。因此,银行交易商可能会在实际再平衡前几天开始建立股票库存。</blockquote></p><p> The hypothetical example above shows how many shares would be bought with just <i>one</i> relatively small fund. You can imagine how the share count increases when you start to allocate trillions of dollars of capital to the index re-weighting.</p><p><blockquote>上面的假设示例显示了只需<i>一</i>相对较小的基金。你可以想象,当你开始将数万亿美元的资本分配给指数重新加权时,股票数量会如何增加。</blockquote></p><p> <u><b>So, who will make it?</b></u></p><p><blockquote><u><b>那么,谁会成功呢?</b></u></blockquote></p><p> To be included in the Russell 1,000 Index - a group of the largest US stocks -<b>a company should be worth at least $5.2 billion by May 7</b>, according to a chart from FTSE Russell, which creates the indexes.</p><p><blockquote>将被纳入罗素1000指数-一组最大的美国股票-<b>到5月7日,一家公司的价值应至少为52亿美元</b>根据创建这些指数的富时罗素的图表。</blockquote></p><p> <img src=\"https://static.tigerbbs.com/186872b8bba306cc607661671efeaed7\" tg-width=\"500\" tg-height=\"270\" referrerpolicy=\"no-referrer\"><u><i><b>That puts retail-trader icon GameStop, which was worth about $12 billion as of the market close on May 7, in the running to be included.</b></i></u></p><p><blockquote><u><i><b>这使得截至5月7日收盘时市值约120亿美元的散户偶像游戏驿站(Bank of America)有望被纳入其中。</b></i></u></blockquote></p><p> <u><i><b>But AMC Entertainment might have just missed the cutoff.</b></i></u></p><p><blockquote><u><i><b>但AMC院线可能错过了截止日期。</b></i></u></blockquote></p><p> And finally, here's Goldman's best guess at the additions and deletions...</p><p><blockquote>最后,以下是高盛对添加和删除的最佳猜测...</blockquote></p><p> <img src=\"https://static.tigerbbs.com/39e95e31f337f982f86d79aef5cc0e34\" tg-width=\"794\" tg-height=\"1197\" referrerpolicy=\"no-referrer\"></p><p><blockquote></blockquote></p><p> <b><u>Potential Additions to the Russell 1000 Index</u></b></p><p><blockquote><b><u>罗素1000指数的潜在补充</u></b></blockquote></p><p> Investors can use the results of our analysis to<b>anticipate potential price moves and buying/selling pressure for stocks being added to and deleted from</b>the widely-followed large-cap and small-cap benchmark indices.</p><p><blockquote>投资者可以通过我们的分析结果,<b>预测添加和删除股票的潜在价格变动和买入/卖出压力</b>广受关注的大盘股和小盘股基准指数。</blockquote></p><p></p>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Gamestop In, AMC Out? Which Meme Stocks Will Be Impacted In Today's Russell Rebalance?<blockquote>游戏驿站加入,AMC退出?哪些模因股票将在今天的罗素再平衡中受到影响?</blockquote></title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 12.5px; color: #7E829C; margin: 0;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nGamestop In, AMC Out? Which Meme Stocks Will Be Impacted In Today's Russell Rebalance?<blockquote>游戏驿站加入,AMC退出?哪些模因股票将在今天的罗素再平衡中受到影响?</blockquote>\n</h2>\n<h4 class=\"meta\">\n<p class=\"head\">\n<strong class=\"h-name small\">zerohedge</strong><span class=\"h-time small\">2021-06-25 19:32</span>\n</p>\n</h4>\n</header>\n<article>\n<p>As we detailed previously, every June, the Russell Index rebalances by removing stocks that no longer meet their criteria (and incorporating recently improving names).</p><p><blockquote>正如我们之前详细介绍的,每年六月,罗素指数都会通过删除不再符合其标准的股票(并纳入最近改进的股票)来重新平衡。</blockquote></p><p> As SpotGamma notes,<b>many traders are starting to discuss the upcoming Russell Index rebalances, and the prospect of GME, AMC or other meme stocks being added to Russell 1000.</b></p><p><blockquote>正如SpotGamma指出的那样,<b>许多交易者开始讨论即将到来的罗素指数重新平衡,以及GME、AMC或其他模因股票被添加到罗素1000指数的前景。</b></blockquote></p><p> Each year in June<u><i><b>(today - Friday, June 25 this year)</b></i></u>the FTSE Russell uses a set ofcriteria to determine which companies stock will be tracked by their benchmark indices.</p><p><blockquote>每年六月<u><i><b>(今日-今年6月25日星期五)</b></i></u>富时罗素使用一套标准来确定哪些公司的股票将受到其基准指数的跟踪。</blockquote></p><p> <img src=\"https://static.tigerbbs.com/8620fa3c3147d2c806038327c9efd6e4\" tg-width=\"947\" tg-height=\"659\" referrerpolicy=\"no-referrer\"></p><p><blockquote></blockquote></p><p> <b>The new constituents will be announced after the bell today.</b></p><p><blockquote><b>新的选民将在今天盘后宣布。</b></blockquote></p><p> There are many ways investors can track these indices, such as through an ETF like IWM.</p><p><blockquote>投资者可以通过多种方式跟踪这些指数,例如通过IWM等ETF。</blockquote></p><p> For massive assets like pension funds, they track by owning the individual stock components of the index.</p><p><blockquote>对于养老基金等大型资产,他们通过拥有指数的个股成分来进行跟踪。</blockquote></p><p> <b>For example if the FTSE adds a 1% weighting of GameStop to the Russell 2000 Index, everyone that tracks the Russell 2000 must buy GME shares. To offset this addition, the Russell will reduce or remove other stock(s) that not longer meet their criteria.</b></p><p><blockquote><b>例如,如果富时指数将游戏驿站1%的权重添加到Russell 2000指数中,那么每个跟踪Russell 2000指数的人都必须购买GME股票。为了抵消这一增加,罗素将减少或删除不再符合其标准的其他股票。</b></blockquote></p><p> <i>*Note: While this post discusses the Russell, the mechanics are the same for the S&P Indices, too.</i></p><p><blockquote><i>*注意:虽然本文讨论的是罗素指数,但标准普尔指数的机制也是相同的。</i></blockquote></p><p> Analysts spend a lot of time trying to assess which stocks will be added or removed from the indices during this annual rebalance.</p><p><blockquote>分析师花费大量时间试图评估在这次年度再平衡期间哪些股票将从指数中添加或删除。</blockquote></p><p> According to the FTSE Russell approximately $16 trillion assets track the Russell indices, so a lot of shares may have to be bought and sold so that all of these various funds conform to the appropriate benchmark.</p><p><blockquote>根据富时罗素的数据,大约有16万亿美元的资产跟踪罗素指数,因此可能需要买卖大量股票,以便所有这些不同的基金都符合适当的基准。</blockquote></p><p> With volume like that, one can see the value of knowing which stocks may be bought and sold <i>before</i> these large funds start their adjustment.</p><p><blockquote>有了这样的交易量,人们就可以看到知道哪些股票可以买卖的价值<i>以前</i>这些大型基金开始调整。</blockquote></p><p> <u>Knowing what stocks will be added or removed from indices, such as Russell, is a huge opportunity for traders</u></p><p><blockquote><u>了解哪些股票将从指数(例如罗素指数)中添加或删除对交易者来说是一个巨大的机会</u></blockquote></p><p> TSLA was a prime example of how traders got ahead of these additions. In late November 2020, it was announced that TSLA would be added to the S&P500 Index. As you can see on the chart below, the stock traded nearly 50% higher from the announcement date to the actual addition date.</p><p><blockquote>特斯拉是交易员如何领先于这些新增产品的一个典型例子。2020年11月下旬,宣布将TSLA纳入标准普尔500指数。如下图所示,从公告日到实际添加日,该股的交易价格上涨了近50%。</blockquote></p><p> <img src=\"https://static.tigerbbs.com/5b5a1b955bc2c60236833e65ad22e8c9\" tg-width=\"1280\" tg-height=\"638\" referrerpolicy=\"no-referrer\"></p><p><blockquote></blockquote></p><p> It’s important to mention that Tesla’s massive move into the index addition was quite an aberration, and traders should not expect ~50% moves for all index events.</p><p><blockquote>值得一提的是,特斯拉大规模加入指数是相当反常的,交易者不应预期所有指数事件都会出现约50%的波动。</blockquote></p><p> <u>Mechanically, this is how an index rebalance trade may take place</u></p><p><blockquote><u>从机械上讲,这就是指数再平衡交易的发生方式</u></blockquote></p><p> <b>Theoretical Example:</b></p><p><blockquote><b>理论实例:</b></blockquote></p><p> The Huge State Pension Fund (like: CALPERS, Texas Teachers, etc.) has $1 billion tracking the Russell 2000 Index. It’s announced that at the close of trading on June 25th, GME will be added to the Russell 2000.</p><p><blockquote>庞大的国家养老基金(如:CALPERS、德州教师等。)有10亿美元跟踪罗素2000指数。据宣布,在6月25日收盘时,GME将被加入罗素2000指数。</blockquote></p><p> Huge State Pension Fund must therefore buy:</p><p><blockquote>因此,庞大的国家养老基金必须购买:</blockquote></p><p> <ul> <li>$1,000,000,000 (AUM) * 1.0% (index weighting) = $10,000,000 notional of GME stock</li> <li>$10,000,000/$225 (GME share price) =</li> <li><b>44,444 shares of GME stock</b></li> </ul> The index fund’s goal is to track the benchmark, and so they often work with bank dealers to try and buy these shares at the close of trading on June 25. Accordingly, bank dealers may start to build an inventory of shares in the days leading to the actual rebalance.</p><p><blockquote><ul><li>$1,000,000,000(AUM)*1.0%(指数权重)=$10,000,000 GME股票名义价值</li><li>$10,000,000/$225(GME股价)=</li><li><b>44,444股GME股票</b></li></ul>该指数基金的目标是跟踪基准,因此他们经常与银行交易商合作,尝试在6月25日交易结束时购买这些股票。因此,银行交易商可能会在实际再平衡前几天开始建立股票库存。</blockquote></p><p> The hypothetical example above shows how many shares would be bought with just <i>one</i> relatively small fund. You can imagine how the share count increases when you start to allocate trillions of dollars of capital to the index re-weighting.</p><p><blockquote>上面的假设示例显示了只需<i>一</i>相对较小的基金。你可以想象,当你开始将数万亿美元的资本分配给指数重新加权时,股票数量会如何增加。</blockquote></p><p> <u><b>So, who will make it?</b></u></p><p><blockquote><u><b>那么,谁会成功呢?</b></u></blockquote></p><p> To be included in the Russell 1,000 Index - a group of the largest US stocks -<b>a company should be worth at least $5.2 billion by May 7</b>, according to a chart from FTSE Russell, which creates the indexes.</p><p><blockquote>将被纳入罗素1000指数-一组最大的美国股票-<b>到5月7日,一家公司的价值应至少为52亿美元</b>根据创建这些指数的富时罗素的图表。</blockquote></p><p> <img src=\"https://static.tigerbbs.com/186872b8bba306cc607661671efeaed7\" tg-width=\"500\" tg-height=\"270\" referrerpolicy=\"no-referrer\"><u><i><b>That puts retail-trader icon GameStop, which was worth about $12 billion as of the market close on May 7, in the running to be included.</b></i></u></p><p><blockquote><u><i><b>这使得截至5月7日收盘时市值约120亿美元的散户偶像游戏驿站(Bank of America)有望被纳入其中。</b></i></u></blockquote></p><p> <u><i><b>But AMC Entertainment might have just missed the cutoff.</b></i></u></p><p><blockquote><u><i><b>但AMC院线可能错过了截止日期。</b></i></u></blockquote></p><p> And finally, here's Goldman's best guess at the additions and deletions...</p><p><blockquote>最后,以下是高盛对添加和删除的最佳猜测...</blockquote></p><p> <img src=\"https://static.tigerbbs.com/39e95e31f337f982f86d79aef5cc0e34\" tg-width=\"794\" tg-height=\"1197\" referrerpolicy=\"no-referrer\"></p><p><blockquote></blockquote></p><p> <b><u>Potential Additions to the Russell 1000 Index</u></b></p><p><blockquote><b><u>罗素1000指数的潜在补充</u></b></blockquote></p><p> Investors can use the results of our analysis to<b>anticipate potential price moves and buying/selling pressure for stocks being added to and deleted from</b>the widely-followed large-cap and small-cap benchmark indices.</p><p><blockquote>投资者可以通过我们的分析结果,<b>预测添加和删除股票的潜在价格变动和买入/卖出压力</b>广受关注的大盘股和小盘股基准指数。</blockquote></p><p></p>\n<div class=\"bt-text\">\n\n\n<p> 来源:<a href=\"https://www.zerohedge.com/markets/gamestop-amc-out-which-meme-stocks-will-be-impacted-todays-russell-rebalance?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29\">zerohedge</a></p>\n<p>为提升您的阅读体验,我们对本页面进行了排版优化</p>\n\n\n</div>\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"AMC":"AMC院线","GME":"游戏驿站"},"source_url":"https://www.zerohedge.com/markets/gamestop-amc-out-which-meme-stocks-will-be-impacted-todays-russell-rebalance?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1179245434","content_text":"As we detailed previously, every June, the Russell Index rebalances by removing stocks that no longer meet their criteria (and incorporating recently improving names).\nAs SpotGamma notes,many traders are starting to discuss the upcoming Russell Index rebalances, and the prospect of GME, AMC or other meme stocks being added to Russell 1000.\nEach year in June(today - Friday, June 25 this year)the FTSE Russell uses a set ofcriteria to determine which companies stock will be tracked by their benchmark indices.\n\nThe new constituents will be announced after the bell today.\nThere are many ways investors can track these indices, such as through an ETF like IWM.\nFor massive assets like pension funds, they track by owning the individual stock components of the index.\nFor example if the FTSE adds a 1% weighting of GameStop to the Russell 2000 Index, everyone that tracks the Russell 2000 must buy GME shares. To offset this addition, the Russell will reduce or remove other stock(s) that not longer meet their criteria.\n*Note: While this post discusses the Russell, the mechanics are the same for the S&P Indices, too.\nAnalysts spend a lot of time trying to assess which stocks will be added or removed from the indices during this annual rebalance.\nAccording to the FTSE Russell approximately $16 trillion assets track the Russell indices, so a lot of shares may have to be bought and sold so that all of these various funds conform to the appropriate benchmark.\nWith volume like that, one can see the value of knowing which stocks may be bought and sold before these large funds start their adjustment.\nKnowing what stocks will be added or removed from indices, such as Russell, is a huge opportunity for traders\nTSLA was a prime example of how traders got ahead of these additions. In late November 2020, it was announced that TSLA would be added to the S&P500 Index. As you can see on the chart below, the stock traded nearly 50% higher from the announcement date to the actual addition date.\n\nIt’s important to mention that Tesla’s massive move into the index addition was quite an aberration, and traders should not expect ~50% moves for all index events.\nMechanically, this is how an index rebalance trade may take place\nTheoretical Example:\nThe Huge State Pension Fund (like: CALPERS, Texas Teachers, etc.) has $1 billion tracking the Russell 2000 Index. It’s announced that at the close of trading on June 25th, GME will be added to the Russell 2000.\nHuge State Pension Fund must therefore buy:\n\n$1,000,000,000 (AUM) * 1.0% (index weighting) = $10,000,000 notional of GME stock\n$10,000,000/$225 (GME share price) =\n44,444 shares of GME stock\n\nThe index fund’s goal is to track the benchmark, and so they often work with bank dealers to try and buy these shares at the close of trading on June 25. Accordingly, bank dealers may start to build an inventory of shares in the days leading to the actual rebalance.\nThe hypothetical example above shows how many shares would be bought with just one relatively small fund. You can imagine how the share count increases when you start to allocate trillions of dollars of capital to the index re-weighting.\nSo, who will make it?\nTo be included in the Russell 1,000 Index - a group of the largest US stocks -a company should be worth at least $5.2 billion by May 7, according to a chart from FTSE Russell, which creates the indexes.\nThat puts retail-trader icon GameStop, which was worth about $12 billion as of the market close on May 7, in the running to be included.\nBut AMC Entertainment might have just missed the cutoff.\nAnd finally, here's Goldman's best guess at the additions and deletions...\n\nPotential Additions to the Russell 1000 Index\nInvestors can use the results of our analysis toanticipate potential price moves and buying/selling pressure for stocks being added to and deleted fromthe widely-followed large-cap and small-cap benchmark indices.","news_type":1,"symbols_score_info":{"GME":0.9,"AMC":0.9}},"isVote":1,"tweetType":1,"viewCount":348,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":4,"xxTargetLangEnum":"ORIG"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/122298908"}
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