What sort of buying pressure and volume is reasonable to assume once a company as big...

What sort of buying pressure and volume is reasonable to assume once a company as big as Tesla is added to the S&P500?

Expert Solution

Once a company which is as big as Tesla is added to S&P 500, there can be an expectation of a very high participation of market into trading of the share because those kind of shares are very high beta stocks and they are giving very wild movements and potential of making a higher rate of return during a very short period of time both on the upper side and the lower side so it will provide optimum opportunity to both the bears and the bulls.

It can be known that Tesla is almost $ 300 billions market capitalised company and it has a very high beta that will mean that it will have very high volatility in respect to the overall market so one can expect a very high interest of traders as well as investors on the overall buying and selling once a stock like Tesla is added to the overall index.

it is because of the volatility and flavour of the market as well as wild movements and potential of achievement of higher rate of return both on the upper side and the lower side that a large number of market participants will be generating a large number of trading volume in stock like Tesla.

jeff jeffy answered 2 years ago

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