Post by
Maxmoe on Jun 13, 2022 2:22am
Any index experts on this board?
Not jackholes like me that think they know the answer. If Ath is added as part of the index on the 20th, what are the exact mechanics? Does the index for the sake of following the process only, not literally, "buy" shares of ATH at the open using prior day close? Or "buy" at close on the 20th? Or, here's a tricky alternative, does it "buy" on the 18th, at the open or close on the 18th, so it's settled on the 20th? Does anyone know for sure how it works? Doesn't really matter unless you're flipping over the next week, I'm just curious. My guess is when a stock is "added to the index" on the 20th, the "buy" happens effectively pre opening on the 20th such that any impact from the stock price move on the 20th is reflected in the index move that day. As for T+2 settlement I assume that's more of a tax issue and like a mutual fund striking it's NAV everyday, it's done on a trade date, accrual basis, not cash settlement date basis. So if I'm correct, actual index fund managers will want to add however many shares they need to rebalance as at the close on the 19th and likewise they will want to punt whatever is dropped from the index at the same time. Anyone? Bueller?
Comment by
ComradeKomissar on Jun 13, 2022 3:10pm
Hey pops, hope you're having a good day. TSX will allow index providers a type of trade called "Market on Close". Last time this happened was at exactly EOD 4:30 PM on May 31. I believe some 30M shares changed hands in a nano-second. https://www.tsx.com/trading/tsx-venture-exchange/order-types-and-features/market-on-close