Compass Investments

– On Tuesday, SpaceX will join the Nasdaq-100, triggering buying by passive index funds.

JPMorgan has set SPCXs weighting at 1.3% , which places the stock roughly 21st on the index.

Since hitting a record high in June, SPCX shares have lost about 29% .

SpaceX (SPCX) shares will be added to the Nasdaq-100 before the market opens on Tuesday. This comes as SPCX shares are trading nearly 29% below their recent peak.

On June 26, Nasdaq confirmed SPCXs inclusion in the indexless than a month after the companys debut on June 12.

Space Exploration Technologies Corp went public on June 12, reaching a market capitalization of nearly $2 trillion. The stock opened at around $150, significantly above its IPO price of $135.

The initial surge pushed SPCX to an all-time high of $225.64. However, the stock then fell sharply.

Over the past few weeks, SPCX shares have fallen by about 29% . On Monday, they closed at $160.42, down 0.98% from the previous day.

SpaceX (SPCX) stock price performance.

Index-tracking funds will be forced to buy SPCX to stay in line with the benchmark. Such demand could push the price higher, although the effect depends on the stocks weighting in the index.

SpaceX shares will be added to the Nasdaq 100 tomorrow morning before the market opens.

According to JPMorgans calculations, SpaceXs weight in the index will be about 1.3% , placing the company roughly 21st on the list, behind giants such as Nvidia, Walmart, Intel, and Tesla.

But the smaller a components weight in the index, the fewer shares those trying to track it will end up holding, Mike Khau, chief strategist at OpenInterest.PRO, told CNBC. Make no mistake, volatility remains very high.

Volatility also remains a cause for concern. J.J. Kinahan, senior vice president at Cboe, urged caution due to short-term fluctuations.

We know volatility is high. Theres a sense that it could rise. Are you prepared for an expected $20 price spike over the next 11 days? he asked.

Meanwhile, the expiration of the lock-up period could work against buyers. Restrictions on insider sales are being lifted in tranches between 70 and 135 days after the June 12 IPO. Shares owned by Elon Musk and other major investors remain locked up for 366 days.”,”detected_source_language”:”RU