What is unchanged?
When a security’s rate or price stays the same during two periods, it is said to be “unchanged.” This may span a day, a week, or even a year, among other time intervals. The word “unchanged” is used interchangeably in the futures, options, stock, and fixed-income markets. The phrase also refers to mutual fund net asset values, exchange-traded funds, and indexes.
Most traders and investors concentrate on either unchanged intra-day prices or unchanged closing prices across several trading days, even if it is feasible to observe an unchanged price between two arbitrary periods, such as 3 p.m. on a Thursday and then at 10:15 a.m. the following Tuesday.
COMING TO END Not altered
For assets that are more illiquid and typically less popular, including closed-end funds, microcap stocks, and stakes in private firms that do not trade on major exchanges, unchanged intraday prices are more prevalent. Since certain exchange-traded funds are not actively traded, their values may remain static.
On the other hand, even in times of relative market quiet, relatively few S&P 500 equities finish a typical day unaltered or with the same starting and closing prices.
When selecting two random points on a pricing chart, manually choosing two price points with the exact costs is often feasible. The holding period return between these locations will remain the same in this scenario. But this won’t account for the range of price fluctuations from peak to bottom. In other words, the return on investment for an investor remains constant when fees and expenditures are taken out, even if the asset’s price fluctuates quite a little between those two times.
Illustrations of Unaltered
For example, in October 2008 and May 2018, West Texas Intermediate oil, or WTI, traded at exactly $70.32 at two different market closures. The holding period return has remained the same between these two dates. This information could be helpful for an investor holding a long-term futures contract at this exact moment.
But there was also a significant shift in the fundamental supply and demand dynamics between these two periods and the peak to low price of oil. During the Great Recession, WTI prices quickly fell to less than $40 in January 2009, rose over $100 per barrel again in May 2011, and remained flat until July 2014. Following that, prices fell below $30 in February 2016 as shale oil production increased stockpiles. However, when those inventories began to decline and inflation rose, prices eventually rose to $70 in May 2018.
The holding-term return, exclusive of fees and expenditures, has been constant during these fluctuations.
