How is the sensex calculated / determined ?
Answers: the value of sensex is determined by taking the average of top 30 scripts (in terms of market capitalization).suppose reliance has 10% weightage and sbi 5% on the sensex. Now if all other stocks remain same and reliance moves up by 1% and sbi moves down by 1% then sensex would go up by (.1-.05)=.05%
[calculation: reliance weightage: 10% = 10/100=0.1
sbi:5%=5/100=.05]
in the similar way the weighted average of all 30 advancing and declining stocks are counted
with base of 100 points - 30 listed stocks in BSE sensex have specific values.
BSE board periodically reviews the performance and hence stock specific values are variable. Some stock may go out of Sensex and new stock replaces it.
it is useful for technical analysis sensex movement in general and independent stock movement in reference to sensex index.
Why does a stock go down 19% on good news sometimes?
Answers: Personally, I feel the reason this happens is that a given company needs capital to move into new markets, for instance into China or perhaps to support a newer market developing in the US or the rest of the world, and or to pay out huge bonuses to their CEOs and CFOs etc, or perhaps one of their executives is selling all their stock on the earnings date.
They can get capital from borrowing, but that costs more money than to sell a 19% stake in their own shares of the company or through a broker acting on their behalf. This might be considered illegal, but done through "other agents" it is shakey at best, not actually illegal.
And companies that are struggling to grow don't like speculators investing in them anyways. They want long term investors! Without those long term investors, they cant have the free capital to keep growing unless they borrow money and if money is costing too much to borrow in a mid or small cap company, they will get more stock sold than is being bought and they will take the capital gain and buy whatever they need to expand.
It depends on the stock - if you have one in mind let us know.
Often it is simply a matter of expectation - what people talk about as "priced in". If a company is coming up to publishing results, then the market may be expecting/hoping for a 10% sales growth yoy, and hence the shares will trade as though that is what they have been told. When the results only say an 8% increase (which is still good) the market is dissappointed so falls.
19% is a long way, so it could be a combination of poor market conditions on the day, coupled with over-eager forecasts.
One reason is market expectation. If a co reports profits up 50% and the market have been expecting 75% well you know the rest. The market is also trying to discount the future, or there may be a statement by the CEO saying the co's profits ar up 50% (remember that's the year just gone) is facing a dificult year and the order book is well down on last year.
The market in general mya be well down on other macro bad news (US going into recession) etc.etc.
Expectations may be too high. There's a slogan in the market, buy on the rumor, sell on the news.
I answered this exact question a week ago (with regards to IBM) and got Best Answer for it.
Look through my best answers, or see my webpage, the answer is there too
http://commonsensetrading.G00GLEpages.co...
because gay bobby knows other gays
What is the VIX?
I looked at Scottrade and it has a symbol VIX that I can buy! What is up next to that? I was told that VIX be a commodity! Scottrade does not trade commodities, so I know this symbol VIX on their trading plaform is not a commodity! What gives?Answers: <<<What is the VIX? >>>
As others said, it is the CBOE volatility index.
<<<I looked at Scottrade and it have a symbol VIX that I can buy! What is up with that?>>>
My guess is that Scottrade uses a standard eyeshade to display quotes and that screen includes a buy likelihood. Just because it shows up on the screen does not penny-pinching you can buy it like an ETF. You cannot.
<<< I be told that VIX was a commodity!>>>
As others own told you, it is an index, not a commodity. The fact that someone told you it is a commodity simply routine that person be incorrect.
<<<What gives?>>>
You can survey a video explaining VIX at
http://www.cboe.com/TradTool/webcast.asp...
VIX is the volitility index.
It is a rather complex equation to create an "average" implied volatility for the subsequent 30 days of the S&P 500. It is constructed from the prices of the nearest and next nearest futures and option on the S&P 500. The complexity basically boils down to trading a straddle expiring within EXACTLY 30 days, that is struck at the current S&P index even. Clearly that is a continually moving definition - hence the complex subtraction to estimate it from what actually is traded.
Vix tracks the volatility of the CBOE (Chicago Board OPTIONS) So perchance if you had unambiguous option posi tions and be nervous of their volatility you could hege the volatility out by trading the VIX.
As surrounded by most of these derivatives you need a moral mathematical schooling!
Good advice would be if you don't deduce it keep ably away!
"VIX is the ticker symbol for the Chicago Board Options Exchange Volatility Index, a popular measure of the implied volatility of S&P 500 index option. Referred to by some as the fear index, it represents one index of the market's expectation of volatility over the next 30 year period."