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How do stock market indices work?

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Professional Stocks and Forex trader with 4 years of experience.

Stock market indices are a measure of the performance of a group of stocks that represent a particular market or sector. They work by tracking and aggregating the value of selected stocks to provide an overall snapshot of how that segment of the market is performing. Indices are calculated using a weighted...
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Stock market indices are a measure of the performance of a group of stocks that represent a particular market or sector. They work by tracking and aggregating the value of selected stocks to provide an overall snapshot of how that segment of the market is performing. Indices are calculated using a weighted average of the stock prices or market capitalizations of the included companies.

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