Talk:Russell Indexes

Change freeze during rebalancing?

American Investment Banks have an IT "Change Freeze" during the Russel rebalance period. This is to eliminate the possibility that trading will not be possible during this critical period. Does anyone have an insight as to why this period is so critical, and why banks could lose a lot of money or opportunity by not being able to trade at this time? Thanks.

I used to be the head of a program trading desk at one of those banks. Often when "turning over" or "releasing" updates in software unforseen errors may creep in. If one of those erros creates a problem that stops trading or booking systems from working the broker trading on behalf of customers could be on the hook for execution. On a day like the Russell rebalance (busiesst day of the year for most program trading desk) your typical program trading desk could potentially be on the hook (morally or legally) for billions in unexecuted transactions.