IROs depend a lot on the market structure and there are three primary reasons for this. These reasons are the correct IR measurements, the correct answers to questions and the correct place for IR time and effort. However, we always seem to be refraining from these. Its time that we incorporate the options expirations to such instances for investor relations.
Last week, monthly options expirations have been marked in terms of investor relations. There were some changes with the complete market structure in advance on Monday October 15. One thing to note is that American, European and Asian market acted like pistons, going up and down with every minimal increment. According to experts and market gurus, these differences indicate fear and greed in relation to credit or economic concerns. However, an explanation such as this wont stand under scrutiny whether or not investors are engaged in bipolar reactions with a continuous manner.
Investors relations have quite an impact and there is a reason for that. You should know your shareholders way of thinking affects the whole thing, both on short and long term aspects. Therefore, there should be an effective means of expending effort, measuring results have to be correct and accuracy is important in answering questions.
There are other things to consider, especially with the data presented in regard to investor relations. The Regulation National Market System (Reg NMS) in many US markets has started the search for arbitrage that further extends the market centers to be placed on a global stage. It may be quite far-fetched now but the accumulating data has determined it to be easy and it doesn’t come as a surprise. It is quite significant with the level to which volume spreads among major American and European broker-dealers and even in terms of structured-products for the Asian market.
Traders have said many things but these days, in terms of investor relations and equity values, options expirations are the same as Santa Ana winds. Derivatives are liquid and always in motion. Increments of about 1% or 2% are played every day annually. It is difficult to measure even though investors are attracted to the opportunity of gains and losses. 5% to 10% doesn’t come instantly but the little pieces are continuous and fast. Such actions affect the availability of liquidity to basic investors and the equity markets, in a transactional nature, change up the sellside priorities.
If you wish to be an expert in the investor relations field, it is very important that you know and internalize this kind of information. Always take these three hooks into consideration to be effective in what you are doing.
Reaction of the stock to news, events or to a derivatives imbalance directly affects the correct answers to questions. Which and when sellside shops adapt to your stock price are affected by the measures of the IR time spent. The response and not the volume of money to calls and one-on-ones relates to measuring the activities of investor relations.
The market structure alone is not the basis and therefore, you should take a big leap with these hooks in improving investor relations.
Wade Entezar a sketch of stock investor liaisons.