The fluctuation range of investment funds has not changed – Tejaratnews
According to Tejarat News, the spokesperson of the Securities and Exchange Organization, Amir Mehdi Sabai, announced today by publishing an article on the virtual page: “Any change in the fluctuation range of investment funds is denied.
According to the Senate, it is also emphasized that in order to protect the psychological security of investors, the stock exchange organization reserves the right to take legal action against those who spread false news.
Past experience of reducing swing range
The change in the fluctuation range was an action by the market supervisory body, that is, the Securities and Exchange Organization, which was done to support the shareholders and stop the process of the withdrawal of real capital from the market.
During the fall of 1999, in order to balance the stock market, the Supreme Council of the Stock Exchange decided to reduce the range of fluctuations on its negative side. In this way, from February 25, 1999, the range of stock market fluctuations changed from negative and positive five percent to negative two to positive 6 percent.
The history of changes in the range of the stock market volatility is given in the chart of the total index. As is clear, the market’s reaction to the change in the range of volatility has been extremely negative. In this way, after 25th of February 2019, the total index ended only two days with a green candle during three weeks. After that, on the 1st of May, the fluctuation range increased by one percent in the negative direction, the speed of correction increased and even a new floor was recorded for the total index.
Based on this review, it can be concluded that reducing the range of fluctuations cannot prevent the downward trend of the market, but it will reduce its speed. This issue, i.e. slowing down the trends, has its positive and negative points, but it seems that, in a case study, the negative points outweigh the positive. Because the erosion of trends is one of the consequences of reducing the fluctuation range. This issue can be frustrating for shareholders. It also increases the risk of yield reduction compared to other markets and the sleep of capital in an inflationary economy.