Is GME going to join any new indices due to its increased market capitalisation?

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Tellurius
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Is GME going to join any new indices due to its increased market capitalisation?

Post by Tellurius »

So I’m not sure at which frequency indices change their composition. Has GME joined any new indices due to the substantial change in its market capitalisation?
How often do indices (and the index funds that follow them) change composition?
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Forester
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Re: Is GME going to join any new indices due to its increased market capitalisation?

Post by Forester »

Well it will not get into two of the big momentum ETFs, MTUM & QMOM, due to the volatility screens (I am guessing here).
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sperry8
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Re: Is GME going to join any new indices due to its increased market capitalisation?

Post by sperry8 »

Tellurius wrote: Thu Jan 28, 2021 9:16 am So I’m not sure at which frequency indices change their composition. Has GME joined any new indices due to the substantial change in its market capitalisation?
How often do indices (and the index funds that follow them) change composition?
I believe there are other requirements, such as 4 quarters of profitability for the S&P - so no.
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galawdawg
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Re: Is GME going to join any new indices due to its increased market capitalisation?

Post by galawdawg »

You can look up the companies that are part of any index mutual fund. For example, VTSAX: https://investor.vanguard.com/mutual-fu ... o-holdings

From that list, VTSAX already holds 1,468,071 shares of GameStop Corp. Class A.
alex_686
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Re: Is GME going to join any new indices due to its increased market capitalisation?

Post by alex_686 »

Probably not.

Indexes really don't want companies to flit in and out of the index because of volatile spikes in the price. Investable Indexes - which is what I am assuming you are talking about - need to be structured that a fund can actually replicate the index in the real world (doubtful here). Also, they do want to limit turnover costs, so they want to be reasonably assured that he company will still be in the index a few years from now.
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30west
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Re: Is GME going to join any new indices due to its increased market capitalisation?

Post by 30west »

Check back after the stock crashes.
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arcticpineapplecorp.
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Re: Is GME going to join any new indices due to its increased market capitalisation?

Post by arcticpineapplecorp. »

Robinhood, Interactive Brokers restrict trading in GameStop stock and options:

Amid the flurry of speculative activity in GameStop, brokers took steps to restrict the trading in GameStop stock and options and other related securities. In some cases, investors would only we able to sell their positions and not open new ones.

source: https://www.cnbc.com/2021/01/28/robinho ... top-s.html
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Re: Is GME going to join any new indices due to its increased market capitalisation?

Post by AlohaJoe »

Tellurius wrote: Thu Jan 28, 2021 9:16 am How often do indices (and the index funds that follow them) change composition?
Every three months. So they won't change composition again until April.
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Re: Is GME going to join any new indices due to its increased market capitalisation?

Post by CardioMD »

Is this a serious question?
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JoMoney
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Re: Is GME going to join any new indices due to its increased market capitalisation?

Post by JoMoney »

"Total Market" index funds aren't doing anything.
S&P 1500 (500/400/600) index constituents update quarterly, but there is more discretion involved than just capitalization.
I believe the FTSE-Russell, CRSP, and MSCI indices also update quarterly.... but most of them use migration rules now that force a slow transitions from one index to another. In a market cap weighted index a stock growing rapidly might move from the top of one segment to the bottom of another, but it would be a trivial amount of the index it was moving to, and the slow migration would make it even slower.
My expectation is that the short-squeeze will play out before any quarterly index rebalancing happens, and GME will just be a story people tell about main-street sticking it to wall-street hedge funds and some stories about the low-information traders who got in too late and stayed too long in GME and lost everything.
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