Announcement Effect

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Dictionary Says

Definition of 'Announcement Effect'

The impact on markets from the news that a change will occur at some future date. It can be used as a general term for the reaction to any development that affects trading, such as a change in dividend policy or a stock split. It is most often used, however, to describe investor reactions to changes in monetary policy, such as a hike or cut in a key interest rate level.

Also known as a "signal effect."

Investopedia Says

Investopedia explains 'Announcement Effect'

Stock traders eagerly await the announcement of changes in Federal Reserve policy, and stock volumes are notably higher on so-called Fed days; depending on the investment environment, volatility may be substantially heightened as well. Researchers have also found that trading on the day preceding announcements of Fed policy is relatively calm.
Search results for

'Announcement Effect'

  • Minimize Risk With The Long Collar

    http://www.investopedia.com/articles/optioninvestor/09/the-long-collar.asp
    ... So if you are concerned that there may be a negative announcement effect, but for
    one reason or another you do not wish to sell the stock, a collar on the ...

  • Making Sense Of Market Anomalies

    http://www.investopedia.com/articles/stocks/08/market-anomaly-efficient-market.asp
    ... The increase in price is known as the stock split effect. ... Short-term price drift
    occurs when stock price movements related to the announcement continue long ...

  • Why Theta Can Mislead During Earnings

    http://stocks.investopedia.com/stock-analysis/moneyshow/WhyThetaCanMisleadDuringEarnings.aspx
    ... The truth is, when an earnings announcement occurs close to expiration, the
    effect of time decay is negligible. Thus, although Theta ...

  • Mergers & Acquisitions: An Avenue For Profitable Trades

    http://www.investopedia.com/articles/forex/05/MA.asp
    ... that is a combination of both stock and cash has a more mixed effect on the ... factors
    that may be impacting a currency pair at the time, the announcement of a ...

  • The Strategic Oil Reserves Explained - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/0711/The-Strategic-Oil-Reserves-Explained.aspx
    ... prices fell 4%. However, as of June 30 - one week after the announcement - the price ...
    term, the release of this oil appeared to have no long term effect on the ...

  • How Does The Yen Affect American Finance? - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/0910/How-Does-The-Yen-Affect-American-Finance.aspx
    ... The move had the opposite effect in the Far East as markets dropped in South ... the
    DJIA rose 0.6% points during the two days following the announcement while the ...

  • CFA Level 1 Study Guide - Ethics and Standards - Disciplining CFA ...

    http://www.investopedia.com/exam-guide/cfa-level-1/ethics-standards/disciplining-members.asp
    ... 3.7 Market Efficiency; 3.8 Price Ceilings and Floors; 3.9 Effect of Taxes on Supply
    and Demand; ... 5.16 Effect of Monetary Policy; 5.17 Fixed vs. ...

  • The Fed's New Tools For Manipulating The Economy

    http://www.investopedia.com/articles/economics/08/monetary-policy-recession.asp
    ... Practically speaking, this encompasses any sort of public announcement from the
    Fed ... This in effect would accomplish the Fed's goal of raising interest rates to ...

  • QE2: The End Is Near - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/0611/QE2-The-End-Is-Near.aspx
    ... well since the announcement of QE2, they were also doing well before the announcement. ...
    For companies, the end of QE2 is not likely to have a pronounced effect. ...

  • 10 Forex Misconceptions

    http://www.investopedia.com/articles/forex/11/ten-forex-myths.asp
    ... to set up a trade before an announcement is made, execution requires analysis of
    the presented statistics in order to determine the likely effect on the market ...

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