• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • TheStreet Smarts
  1. Home
  2. / Investing
  3. / Stocks

The Highest Volume Day of the Year Is on Tap as Indexes Rebalance

Don't try to read anything into the movement; it is just index adjustments that have nothing to do with valuations or technical patterns.
By JAMES "REV SHARK" DEPORRE
Jun 24, 2022 | 07:39 AM EDT
Stocks quotes in this article: IWB, IWM, IWC, IWD, IWN, IWF, IWO, META, NFLX, PYPL, GME

A summer Friday without any major news headlines is typically a pretty quiet day on Wall Street, but today is likely to be the highest volume day of this year. At the close, it is estimated that around $112 billion in stocks will be traded in huge blocks as the Russell indexes are rebalanced.

There are a number of Russell indexes that are impacted and they hold thousands of different stocks. The Russell 1000, as represented by the iShares Russell 1000 ETF (IWB) , holds big-cap names, and the Russell 2000, represented by the iShares Russell 2000 ETF (IWM) , holds small-caps names. There are trillions of dollars in passive index funds that are tied to these indexes.

In addition, there is a micro-cap fund (the iShares Russell Micro-Cap ETF (IWC) ), and the Russell 1000 and 2000 are further broken down into value and growth funds (iShares Russell 1000 Value ETF (IWD) , iShares Russell 2000 Value ETF (IWN) , iShares Russell 1000 Growth ETF (IWF) , iShares Russell 2000 Growth ETF (IWO) ).

This year there are some larger-than-usual moves as stocks such as Meta Platforms (META) , Netflix (NFLX) and PayPal (PYPL) move from the growth indexes to the value indexes. GameStop (GME) moves in the other direction, and there are hundreds of other stocks that will be moving around.

All of this buying and selling has nothing to do with fundamentals or technical patterns, but typically market players like to believe this movement is meaningful and can be extrapolated to indicate some sort of trend.

Trying to game these additions and deletions is extremely difficult. Brokers don't just buy a huge block of stock at the close. They have been accumulating the necessary shares for weeks and may employ complex options strategies so that they don't have big losses when they make the final transfer to the index funds at the close on Friday.

It is fascinating to see all the huge blocks transfer at the close, but they don't tell us very much about where stocks are heading in the future. It is possible to catch some increased volatility today, but no systematic way in which to do so.

We have a positive start to the day as stocks build on Thursday's strength, but much of that was probably just a precursor to the rebalancing that is occurring today.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Rev Shark had no positions in the stocks mentioned.

TAGS: Balanced Funds | Index Funds | Indexes | Investing | Stocks | Real Money

More from Stocks

You Don't Have to Trade All at Once

James "Rev Shark" DePorre
Sep 23, 2023 10:00 AM EDT

Trading in multiple time frames not only reduces risks, but also provides strategic flexibility. Let me show you what I mean and how to do it.

FS Insight Weekly Roadmap: Market Response to Hawkish Fed Is an Overreaction

Tom Lee and the FSI Team
Sep 23, 2023 9:10 AM EDT

Here's why we believe 'higher for longer DUE to higher GDP' has a more dovish tone, and remain constructive for the rest of the year.

This Dividend Aristocrat Has All the Raw Materials to Make It a Top Pick

Bob Ciura
Sep 23, 2023 7:30 AM EDT

This name has been down, but now I think it's charged up to cruise into the year's end.

The Bears Just Moved Into Wall Street

James "Rev Shark" DePorre
Sep 22, 2023 4:26 PM EDT

Technically, the bears are in control of this market now.

Don't Be a Sap and Step Into a Value Trap

Bret Jensen
Sep 22, 2023 12:30 PM EDT

There are plenty of stocks that look like value plays but aren't as the market continues to drag more share prices down.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 12:20 PM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    Trading in Multiple Time Frames
  • 10:24 AM EDT BRUCE KAMICH

    This Could Get Messy

    A number of key stocks are getting close to import...
  • 01:41 PM EDT CHRIS VERSACE

    Latest AAP Podcast With Helene Meisler!

    Listen in as the Action Alerts PLUS podcast talks ...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2023 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login