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If an index selloff could cause a drop in underlying stock price, wouldn't we see this effect when stocks are relegated from various indexes? Does this effect
by TomGullen 7y ago
If an index selloff could cause a drop in underlying stock price, wouldn't we see this effect when stocks are relegated from various indexes? Does this effect exist?
- C1sc0cat 7y agoYes and hedgefunds play this game for example M&S getting dumped from the FTSE 100
- adambyrtek 7y agoThis effect does exist, but changes to indexes are public, so this information is mostly included in the price already.