• 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

Trading the Russell Indices Rebalancing

In the weeks ahead, there's likely to be unusual increases in volume in a number of the stocks that are being added to the Russell 3000.
By JAMES "REV SHARK" DEPORRE
Jun 07, 2021 | 01:51 PM EDT
Stocks quotes in this article: SPY, DIA, QQQ, ATOS, CLOV, BNGO, REPX, GEVO, TRIL, FUV, MNMD

Index funds make up a substantial percentage of the daily trading in the stock market. The S&P 500 ETF (SPY) , DJIA ETF (DIA) , and Nasdaq 100 (QQQ) trade billions of dollars each day, and every time any of the indices add or delete a stock, the funds must also buy or sell the stock. This can create some large moves for the stocks involved and can be an interesting source of volatility for traders.

At the close on June 25, 2021, the Russell indices will be rebalanced. This involves the Russell 1000, the Russell 2000, the Russell microcap index, and several others. Thousands of stocks are impacted by what Russell calls its 'reconstitution.' Typically the day on which the reconstitution is down is one of the highest volume days of the year as a slew of huge blocks are transferred to various index funds.

The preliminary list of the stocks that will be added and deleted to the Russell indices was released at the close on Friday, June 4, 2021. The list will be updated on June 11 and June 18 before becoming final on June 25.

Since funds have to buy quite a few shares in the stocks being added to the indices, it would seem like a good trading opportunity to buy in front of the big funds and then sell quickly when they drive the prices up. Of course, nothing in the stock market is that easy. The funds use a variety of complex strategies to make sure they end up holding the right stocks at the right price when the index change is finalized.

I have found that the last of stocks that are being added to the Russell indices can make for a good shopping list in the three weeks leading up to the final rebalancing. There are approximately 255 stocks being added to the Russell 3000. Currently, about 210 are trading up, and 45 are trading down. That is far better breadth than the overall market, which is running around 4600 gainers to 3225 decliners.

The biggest gainers on the list of Russell additions are Atossa Therapeutics (ATOS) , Clover Health (CLOV) , Bionano Genomics (BNGO) , Riley Exploration Permian (REPX) , Gevo (GEVO) , Trillium Therapeutics (TRIL) , Arcimoto (FUV) , and Mind Medicine (MNMD) , which are all up more than 15% currently.

In the weeks ahead, there is likely to be unusual increases in volume in a number of the stocks that are being added to the Russell 3000. There is no way to know what might happen or exactly how the stock will trade at the closing on June 25 but what we do know is that someone big is going to have to buy shares, and they will likely have some impact on the trading.

I'll be discussing various names that are being added, but here is a complete list of the additions to the Russell 3000.

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, James "Rev Shark" DePorre had no position in the securities mentioned.

TAGS: ETFs | Index Funds | Indexes | Investing | Markets | Stocks | Trading

More from Investing

More Good Dividend Stocks With Pretty Charts

Bruce Kamich
Jan 27, 2023 1:31 PM EST

In this second part of a two-part series, we look at the final five of 10 stocks with the best of the both worlds.

Even Some Out of Fashion Names Are Now Back in Style

Jonathan Heller
Jan 27, 2023 12:30 PM EST

Sure, we're only one month in to 2023, but so far these stocks are starting the new year with a bang.

I'm Making Small Bets With These 2 Stocks

Bret Jensen
Jan 27, 2023 11:30 AM EST

While I remain cautious on the overall market, I continue to act upon the limited opportunities I'm finding in the current market.

Chevron Is Crushing It and for My Portfolio Too: Here's the Trade

Stephen Guilfoyle
Jan 27, 2023 10:51 AM EST

The only reason to exit the stock now is profit-taking.

Good Dividend Payers With Pretty Charts

Bruce Kamich
Jan 27, 2023 10:15 AM EST

You can have the best of both worlds -- at least when it comes to a select group of dividend stocks -- as we'll see in this first part of a two part series.

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

  • 11:48 AM EST REAL MONEY

    Watch Doug Kass on the Daily Rundown!

    In today's Action Alerts PLUS Daily Rundown, Doug ...
  • 11:03 AM EST JAMES "REV SHARK" DEPORRE

    This Weekend On Real Money

    It's time to start using this power to build great...
  • 03:06 PM EST BOB LANG

    LEAPS Webinar

    This week, I offered a free webinar session talkin...
  • 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