KEY POINTS Inclusion into the Nasdaq 100 forced passive index funds to automatically SpaceX shares regardless of price. Hedge funds anticipated index rebalancing and positioned ahead of mandatory buying by passive index funds to monetize a predictable surge in demand. Hedge funds reaped billions in profits by taking positions following SpaceX's IPO ahead of forced buying from passive index funds, turning index-rebalancing into one of Wall Street's biggest trades of the year. Passive mutual funds and exchange-traded funds (ETFs) that track indexes cannot choose whether to purchase newly added companies. Hedge funds capitalized on those mandatory inflows by establishing large, often leveraged, positions before the scheduled index changes took effect.