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Just so we are clear, front-running means something very specific in trading and active managers preparing for index changed isn’t it. In fact this sort of cha
by kasey_junk 6y ago
Just so we are clear, front-running means something very specific in trading and active managers preparing for index changed isn’t it.
In fact this sort of change has long been priced into the market, it won’t change prices much at all when it happens.
- cbanek 6y agoAh, the great "it's priced in" - but is it really? I guess nobody can really know, unless you're one of those that says the market is always correct. And yes, there's front running an individual trade, but I was thinking a much longer timeframe, although I don't know what the right word for it would be. Would that be considered momentum? Pre-momentum?
- srl 6y agoWell, you can know, by looking at whether or not there's a change in stock price upon announcement of inclusion in an index, right? https://www.nber.org/digest/nov13/w19290.html https://www.nber.org/digest/nov13/w19290.html It appears that it's not entirely priced in.
- kasey_junk 6y agoNo idea what the right word for what you are saying is. But it’s not front-running. Using front-running here would be similar to if I described a social engineering hack as a “zero-day”. Except worse as front running is frequently legally defined by groups like the sec & finra.
- deleted 6y ago[deleted]