A stock index which is computed by adding the capitalization (float times price) of each individual stock in the index, and then dividing by the divisor. The stocks with the largest market values have the heaviest weighting in the index.
See Also:
Capital: The amount of money an individual or business has available.
Capitalization: Refers to the current value of a corporation's outstanding shares in dollars.
Index: A compilation of the prices of several common entities (stocks) into a single number. An index is a group of stocks which can be traded as one portfolio, such as the S&P 500. Broad-based indexes cover a wide range of industries and companies and narrow-based indexes cover stocks in one industry or economic sector.
Pit: A specific location on the trading floor of an exchange designated for the trading of a specific option class or stock.
