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Registered User
Joined: 3/11/2005
Posts: 1
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Can anyone help me to understand what's going on with QQQQ today. It went down, then up, and hung most of the day around the high of 45. In the last 5 minutes it went way down to 44.68 and none of the options followed it. The Nasdaq Composite did not do the same. Any clues? Help a dummy.
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Registered User
Joined: 4/3/2005
Posts: 91
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There seems to be some hysteresis, as QQQQ gained 37 cents post-session for
a total to last trade at 45.05. It was reported ( not confirmed by me) that
a last second sell order of 5 million shares, brought down the cash market to the the 44.68 mark.
It took to the end of trading to complete the transaction and the "cash market" didn't recover until post- session. Interesting. IMO.
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Registered User
Joined: 1/22/2007
Posts: 16
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what that mean will it drop or go higher?
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Registered User
Joined: 4/17/2006
Posts: 271
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Hi, jpendley, I'm with wizetrd...Could you explain what that means? Thanks very much.
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Registered User
Joined: 4/3/2005
Posts: 91
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OK, I'll try to the best of my understanding of ETFs like QQQQ where the pps is suppose to represent the pps of the underlying stocks in the basket. Mutual Funds are similar except you can usually only buy or sale shares at the end of day because they have to calculate what the basket of stocks is worth per share. The difference I see with ETFs is that the trading price is determined by the underlying stocks "simultaneously", I think that fair use allows me to quote the following from Yahoo finance 'How ETFs work'
"if one allows ETF prices to deviate from the underlying net asset value of the component stocks, another can step in and take profit on the difference, so their competition tends to keep ETF prices very close to it underlying Net Asset Value (value of component stocks)."
If the cause was a large market sell order of 5million QQQQ as was the rumor, someone in the financial ladder of this ETF would have to VERY VERY Quickly ( fast preprogrammed computer??)adjust the basket. BUT it was so close to the bell, that it couldn't be done before the end. ETFs have to play like a stock , so the price would have to stay off until post session where the adjustment had taken place.
so the closing price on Tuesday was 37 cents off, but was corrected by the post session.
wizetrd "what that mean will it drop or go higher?" It should reflect the value of the basket of stocks it contains.Google finance QQQQ will show the basket under "holdings". So if the basket goes up, QQQQ should also,
goes down, QQQQ goes down.
Hysteresis means that there is a lagging between two theoretically linked events due to extreme action of
one of them
If I am off on ETFs, I hope someone corrects me.
Hope I understood what you were asking. If its too much explanation, sorry, Jim
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