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


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