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r/letfs
How much would an index rebalancing have on stock price after hours or in hours leading up to it, as with SpaceX among others?
Investor summaryBullish
Considers buying 2x SpaceX LETF (SPCX) ahead of Russell/Nasdaq inclusion, questioning pre-pricing and after-hours volatility.
Bull points
- Inclusion of SpaceX in major indices will trigger forced buying from passive funds.
- Leveraged ETF (SPCX) amplifies the potential short-term gains from this index rebalancing event.
Bear points
- The market may have already priced in the expected index inclusion gains, limiting upside.
- After-hours trading might see a cooldown or reversal once the forced buying pressure is executed.
Post body
Considering buying into the 2x SpaceX LETF on the short term with the upcoming Russell and Nasdaq inclusion, but was wondering how much does the market price-in the expected leadup to an after-hours force buy, and whether it allows itself to cool over closing hours?
Anyone have any historical takes seeing gains from big index inclusions of relatively new stock seeing the needle move during these events?
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