What Does Unchanged Mean?
‘Unchanged’ refers to a situation where the price or rate of a security remains the same between two periods. This period can range from a trading day to a week, month, or even a year. This term is commonly used across equity, fixed-income, futures, and options markets. It is applicable to indexes, exchange-traded funds (ETFs), and the net asset value (NAV) of mutual funds.
While pricing consistency can theoretically be noted at any timeframe (say, 3 p.m. on Thursday and 10:15 a.m. the following Tuesday), investors and traders typically focus on unchanged intraday prices or unchanged closing prices over multiple trading days.
Decoding Unchanged
Securities that are relatively less liquid and less popular, such as closed-end funds, microcap stocks, and private company interests that don’t trade on major exchanges, are more commonly noted for having unchanged pricing throughout the day. Likewise, some lightly traded ETFs may experience unchanged prices more frequently.
In contrast, it is relatively rare for stocks listed on major indices like the S&P 500 to close the trading day at the same price they opened. This rarity persists even during periods of market tranquility.
When analyzing price charts, it’s possible to find price points where the values are identical across random timeframes. In such cases, the holding period return between these points remains unchanged. However, this doesn’t account for interim price volatility. An investor’s return, excluding fees and expenses, may appear unchanged, but the security’s price might have fluctuated significantly between those two points.
Real-Life Example: Unchanged Prices
Consider the example of West Texas Intermediate (WTI) crude oil, which traded at $70.32 at market close on both October 2008 and May 2018. If an investor held a long-term futures contract throughout this period, the holding period return would be unchanged.
However, between these two points, oil prices experienced considerable volatility. Prices crashed below $40 in January 2009 due to the Great Recession, surged past $100 in May 2011, remained relatively stable until July 2014, and then plummeted below $30 in February 2016 as shale oil production surged. By May 2018, prices returned to $70.
Despite significant fluctuations, the holding period return - excluding fees and expenses - remained unchanged.
Related Terms: price stability, illiquid markets, S&P 500, closing prices, futures contract.
References
- Energy Information Administration. “Cushing, OK WTI Spot Price FOB”.
Get ready to put your knowledge to the test with this intriguing quiz!
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## What does "Unchanged" refer to in the context of a stock quote?
- [ ] An increase in the stock price
- [ ] A decrease of more than 10% in stock price
- [ ] A decrease of less than 1% in stock price
- [x] No change in the stock price
## Which stock market scenario would indicate a stock priced as "Unchanged"?
- [ ] The stock's opening price was higher than its closing price the previous day
- [ ] The stock experienced extreme volatility during the trading day
- [x] The stock's opening price and closing price remained the same
- [ ] The stock's price slightly increased and then decreased
## If a stock is reported as "Unchanged", how has its price changed from the previous close?
- [ ] Increased significantly
- [ ] Decreased significantly
- [x] Remained the same
- [ ] Increased modestly
## How is "Unchanged" typically displayed on financial news tickers?
- [ ] In red, indicating a critical state
- [ ] With a green arrow, suggesting growth
- [x] With no arrows or color indicators
- [ ] With a blue arrow indicating stability
## Financial reports indicate two stocks: one as "Up" and another as "Unchanged". What does "Unchanged" suggest?
- [x] The stock has not moved in price since the last close
- [ ] The stock is experiencing heavy trading
- [ ] The stock price decreased by a significant percentage
- [ ] The stock briefly fell before returning to its previous level
## In which trading period is "Unchanged" most likely noticed most?
- [ ] Pre-market trading
- [x] Continuous, typical trading period
- [ ] Post-market trading
- [ ] High-volatility trading sessions
## What might be a possible reaction of traders when a stock remains "Unchanged"?
- [ ] Engage in more buying activities ielen-appointed
- [ ] Engage in selling due to pessimism cognition
- [ ] Execute limit orders at various price points
- [x] Monitor the stock for potential future movements
## For a well-diversified portfolio, how often should a stock remain "Unchanged"?
- [x] Occasionally, reflecting balance
- [ ] Frequently, to maintain stability
- [ ] Rarely, to pursue higher returns
- [ ] Never, to ensure constant growth
## Why might "Unchanged" be seen in heavily traded stock?
- [ ] Diminished interest in the stock
- [ ] General trading inefficiency
- [ ] Poor liquidity of stock
- [x] Equilibrium due to equal buying and selling
## Which stakeholders often examine reports for "Unchanged" stock prices, among others?
- [ ] Only day-traders seeking rapid profits
- [ ] Long-term investors ignoring daily trends
- [x] Both day-traders and long-term investors
- [ ] Speculators focusing solely on volatility
