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Affected vs Effected

awnlee jawking

Okay, back to this old chestnut.

"I'm splashing some cash on my favourite niece," I said, affecting a grimace.


I keep changing between 'effected' and 'affected'. Reviewing a few grammar websites, my understanding is that it should normally be 'effected', but 'affected' is to be preferred when referring to facial expressions.

What do you editors and proofreaders think? Would you flag either as an error and, if so, for what reason?

AJ

Replies:   Switch Blayde
Switch Blayde
Updated:

@awnlee jawking

I believe it's "affecting."

"Affect" is a verb most of the time ("effect" a noun). But there are exceptions so I replaced "affecting" in the sentence with "causing" and used Word's synonyms. One of the choices was "affecting."

Replies:   Dominions Son
Dominions Son

@Switch Blayde

Simpler way to remember it.

To affect, is to be a cause.

An effect is the thing caused.

Replies:   awnlee jawking
awnlee jawking

@Dominions Son

Simpler way to remember it.

To affect, is to be a cause.

An effect is the thing caused.


I'm concerned.

By buying shares in the open market, I affected a 10% rise in the company's share price.


or

By buying shares in the open market, I effected a 10% rise in the company's share price.


The latter sounds better to me.

AJ

Vlad_Inhaler

@awnlee jawking

Definitely the latter.

Dominions Son

@awnlee jawking

By buying shares in the open market, I effected a 10% rise in the company's share price.


Either it was a very small company or you are very wealthy.

Replies:   awnlee jawking
awnlee jawking

@Dominions Son

The hypothetical 'I' would need to be moderately wealthy, but the way program trades operate, a tiny swing in a share price often gets magnified as the bots join in.

AJ

Replies:   Dominions Son
Switch Blayde

@awnlee jawking

By buying shares in the open market, I affected a 10% rise in the company's share price.

or

By buying shares in the open market, I effected a 10% rise in the company's share price.

The latter sounds better to me.


No, the first is the correct one. It's "affected."

For "effect" to be right, it would be: The effect was a 10% rise.

Replies:   Vlad_Inhaler
Grant

"I'm splashing some cash on my favourite niece," I said, affecting a grimace.
By buying shares in the open market, I affected a 10% rise in the company's share price.

Affect makes sense in both of those example, Effect doesn't.

Dominions Son

@awnlee jawking

The hypothetical 'I' would need to be moderately wealthy, but the way program trades operate, a tiny swing in a share price often gets magnified as the bots join in.


For a typical large national corporation in the US, a single buyer would have to drop several million $ to have even a negligible effect on the share price.

I would not call someone who can drop millions on one stock buy moderately wealthy.

awnlee jawking

@Dominions Son

In the UK, I reckon that tens of thousands of pounds would be enough to increase a lower-capitalisation FTSE 100 share price by a fraction of a penny, and that might be enough to spur the bots do the rest.

I don't know enough about the US markets to be make a guess, but with multinationals like Microsoft, Apple, Alphabet and Facebook, I would expect it to take a lot more. Either that or start a rumour that Apple's iPhone XI will have more cameras than the equivalent Huawei ;)

AJ

Replies:   Dominions Son
Dominions Son

@awnlee jawking

I don't know enough about the US markets to be make a guess


The total population of the UK is just under double that of the largest US state, about 20% of the total US population. As a first approximation, I would guess that the market capitalization (the value of the outstanding stock) of the average US national (excluding multi-nationals with US headquarters) corporation is about 5 times that of the average UK national corporation.

Vlad_Inhaler

@Switch Blayde

"Effected" means "caused".

By buying shares in the open market, I effected a 10% rise in the company's share price.

is the correct version.

"Affected" would have meant "influenced" which is a stretch here.

StarFleet Carl

@Dominions Son

For a typical large national corporation in the US, a single buyer would have to drop several million $ to have even a negligible effect on the share price.


Except, of course, the stock doesn't have to be high in the first place. Chesapeake Energy is trading at $2.61 per share (Jan 10, 2019, 10AM EST). Buying 10,000 shares would only cost $26,100, and if the price rose to $2.87 per share based upon that trade, then that would be a 10% increase.

richardshagrin
Updated:

@StarFleet Carl


a 10% increase


Not quite ten percent, 26 cents is slightly less that ten percent of $2.61, by one tenth of a cent.

Dominions Son
Updated:

@StarFleet Carl

Except, of course, the stock doesn't have to be high in the first place.


Correct, a lot depends on the total number of shares outstanding (# of shares on the open market). A large corporation can have a relatively low share price if there are a lot of shares available.


Chesapeake Energy is trading at $2.61 per share (Jan 10, 2019, 10AM EST). Buying 10,000 shares would only cost $26,100, and if the price rose to $2.87 per share based upon that trade, then that would be a 10% increase.


Small problem. Chesapeake Energy Corp has 911 MILLION shares outstanding with a total market capitalization of $3.38 BILLION.

With that many shares outstanding and that high of a market cap, count me skeptical that a single 10K share purchase would manage to move the share price by even $0.01

Make the purchase 10,000,000 shares and the market might notice.

Replies:   StarFleet Carl
StarFleet Carl

@Dominions Son

With that many shares outstanding and that high of a market cap, count me skeptical that a single 10K share purchase would manage to move the share price by even $0.01

Make the purchase 10,000,000 shares and the market might notice.


Except that the single sudden purchase of 10,000 shares might CAUSE the purchase of 10,000,000 shares, as AJ pointed out.

the way program trades operate, a tiny swing in a share price often gets magnified as the bots join in.


With what are effectively penny stocks (defined now as any stock with a share price of less than $5 per share), small things make for big changes. I chose Chesapeake since it's a local stock for me.

Replies:   Dominions Son
Dominions Son
Updated:

@StarFleet Carl


Except that the single sudden purchase of 10,000 shares might CAUSE the purchase of 10,000,000 shares, as AJ pointed out.


the way program trades operate, a tiny swing in a share price often gets magnified as the bots join in.




Your missing the point.

1. 10K shares out of 911 Million outstanding is not likely to create even a tiny swing in the share price. Like I said, I'm not convinced you could get even a 1 cent change in share price from a purchase that small relative to the total number of outstanding shares (1/1000th of 1 percent).

2. Even if that did happen, it's not really the 10k purchase that caused the larger shift in share price.

3. With such a large number of outstanding shares and such a low price, it would be impossible to actually prove that the 10K purchase was the cause (rather than other coincident factors) of any change in price that did occur.

Replies:   John Demille
John Demille

@Dominions Son

10K shares out of 911 Million outstanding is not likely to create even a tiny swing in the share price


With stock trading, it's not the outstanding shares that matter. Daily traded stock average and offered price can move the market.

If a corporation has 1 billion shares outstanding and people trade 1000 shares daily on average, then a single transaction of 10,000 shares is a big movement for the company.

Also, price change is not predicated on percentage of shares traded. A company with high dividends and stable shareholders would take a high price for the stock to make shareholders sell.

So if the stock price is $2.50 and people trade 1000 shares daily, for somebody to be able to buy 10,000 they would have to bid higher for somebody to notice the bid and sell their shares. That raises the price.

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