S&P 500 Rebalancing impacts/opportunities

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    Posted: 27 September 2010 01:36 PM

    Ever since a poster mentioned it in the intraday thread, I’ve been thinking about how the S&P 500 rebalancing will affect AAPL as well as provide possibilities in AAPL for potential profit.

    Since the S&P 500 rebalancing will almost definitely affect AAPL with its significant rise, the question isn’t if the stock price will go down, but by how much and when.

    Index funds will have to sell AAPL stock to match the lowered percentage of the index that AAPL will represent.  This will cause the price to go down. But by how much?  5%? 10%? 15%?  I don’t think any of those are out of the realm of possibility.

    Given historical rebalancing on standardandpoor.com, it seems that it’s likely this event will happen in October, possibly announced Oct 1,  and if so, most likely implemented on Friday, Oct 15.

    This timing would be very beneficial for some.  If you could buy on Monday as the price is depressed by the index funds selling, there would be a great possiblity of a price spike AH on Tuesday due to earnings release.
    It obviously would have real implications on options as well.

    I bring this up for discussion, not as an expert of any sort.  Just someone who watches the market, and AAPL.

         
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    Posted: 28 September 2010 12:31 PM #1

    Any chance this sort of behavior from a fund manger guessing early was responsible?

    5M shares in the first 5 minutes sounds like a fund dumping.