Index

A rules-based measure of a group of assets, such as the S&P 500 or FTSE 100. Most are weighted by market capitalisation, so the largest constituents dominate the reading.

Also called stock index · indices

A rules-based measure of a group of assets, such as the S&P 500 or FTSE 100. Most are weighted by market capitalisation, so the largest constituents dominate the reading.

Why it matters

A cap-weighted index can be driven by a handful of very large members, so "the market rose" may describe only a few companies.

Related terms

Keep reading

Liquidity How easily an asset can be bought or sold without moving its price much.… Volume The quantity of an asset traded over a period, usually a day. It measures… Capitulation A phase of heavy, indiscriminate selling in which holders give up regardless of price,… Market Capitalisation Share price multiplied by the number of shares outstanding — or, for a cryptocurrency,… Bear Market A prolonged period of falling prices, conventionally a decline of 20% or more from…