Investor Glossary-indexInvestor Glossary-indexInvestor Glossary-indexInvestor Glossary-indexInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Index

The HTML to link to this page
 

An index is a hypothetical basket of securities or economic variables designed to track changes over time. The most common type of index tends to be the stock index such as the Dow Jones Industrial Average and the S&P 500 Index. Each index has its own methodology for calculating the effect of individual index components. The Dow Jones, for example, treats its 30 stocks identically; a rise of $1 in the stock of a $300B company affects the index in exactly the same way as a rise of $1 in the stock of a $30M company stock. Other indexes make varying degrees of adjustments to account for the differences in company size.

Indexes can track market characteristics instead of market values. For example, the Volatility Index (VIX) measures options premiums to determine the market's expectation for future volatility. There are also economic indices that track measures of economic health, such as the Consumer Price Index (CPI).



Rate this index definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: limit order, EBITDA, reverse mortgage, per diem, balance sheet, APR, option premium, cancelled check, required rate of return, debt service coverage, covered put, wholly-owned subsidiary, Key Rate Duration, dividends payable, liquidity ratio, deferred revenue, labor relations, quality assurance, diluted share, margin rate, 144a, inflation, ex-dividend, in escrow, risk management, retained earnings, deferred tax, FICO score, 401a, stock split, 1035 exchange, phantom income, command economy, FTSE, minority interest, irrevocable trust, VIX, stock market close, average price per share, Zero Cost Collar, open position, 1031 exchange, current ratio, ex-dividend date, implied volatility, annual return, real GDP, LIBOR, class C shares


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Investor Glossary | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use