The country’s household futures exchange index can also

The country’s household futures exchange index can also
Everyone has encountered the concept of stock index at least once, or at least heard of it. But what is hidden behind this concept? Why is a stock index necessary? Today, we will study this issue in detail.
This is an indicator of changes in the price of a certain type of security. You can think of a stock index as one of the stocks grouped according to a certain function. The most important thing when researching an index is what stocks or bonds it is formed from. The set of securities included in the list is calculated based on the securities, and it determines what information can be obtained by observing the dynamics of the index. Usually, the main purpose of compiling a stock index is to create an indicator that investors can use to describe the overall direction and trend of company stock quotes in a particular industry. Studying the dynamics of the index helps exchange participants understand the impact of certain events on quotes-for example, if oil prices rise, then all oil companies' quotes can be expected to rise. However, the stocks of different companies are growing at different rates (some may not grow at all)-the index helps to understand the overall trend of the market segment without having to evaluate the conditions of many different companies. Comparing indicators with each other can understand the trading methods between different economic sectors in the market.
The first widely used index was created in 1885. It is calculated based on the quotes of the 12 largest U.S. transportation companies (and the largest stock exchange trading volume) at the time. This index is called the Dow Jones Transportation Average. In 1897, there was an index today called the Dow Jones Industrial Average, which brought together the major industrial companies in the United States. In today's reality, this is nothing more than a tribute to tradition, because the indicator itself has always included companies that are not directly related to the industry. Until then, technology allows for real-time calculation of indexes.
There are many stock indexes designed to meet specific needs. These instruments are classified according to various criteria-by calculation method (component weighing), series and author. Let us consider each type of index in order. The arithmetic average method is one of the oldest methods of calculating indicators. Although in fact the original calculation of the famous Dow Jones Industrial Average is entirely a weighted average of the stock prices included in its list at a certain point in time, this method is not because the number of shares issued by the company may differ by an order of magnitude. Very effective-one company may issue a million shares, while another company may issue tens of thousands of shares. Naturally, this will not allow you to obtain any representative value of the index itself.

The divisor used to calculate the arithmetic mean is initially equal to 12-the number of shares included in the index. Currently, the scalable average is used to calculate-the sum of prices divided by the divisor, which changes when the stocks included in the index are split or merged. Even if the structure of the shares included in the index has changed, this may retain the possibility of comparing them. Jones still retains the nature of calculating simple arithmetic averages-this is called "industrial average-industrial average". This method has advantages. Its main advantage is the simplicity of calculation and the speed of reaction to sharp stock price fluctuations, which occur during, for example, stock market crises. The most expensive stocks have the greatest impact on the index, while the cheapest stock price changes have almost no effect on its value. At the same time, the price of the stock itself does not directly affect the company’s capital-for a company with expensive stocks, its total capital may be lower than the total capital of the company issuing cheap shares (and the stock itself may even have a lower rate of return ). A similar scheme is used to calculate the index of the American Stock Exchange family and Japan's Nikkei 226 average index (released since 1950, consolidated 226 shares).

There are also some indexes that are calculated using the arithmetic average formula, which is weighted based on the growth rate of stock prices, for example, the composite arithmetic index (combining 1700 stocks with and). The price per share contained in the index is multiplied by a coefficient corresponding to its share of the share capital of the company that issued it (so-called). Calculating the growth rate of stock prices is a more effective calculation method, because it can eliminate the impact of the price difference per share. In addition, if the stock list calculated based on its index changes, there is no need to adjust it separately. Another way to calculate the index is the geometric mean of stock price growth rates-these indexes include the 31 index created by the Financial Times and the value line composite geometric index (which also includes 1,700 stocks). Most foreign and Russian stock indexes are based on value index formulas-including Nasdaq, Standard & Poor's, (Germany), (France) series of indexes, and indexes. You can buy Russian index futures on the Moscow Exchange. To do this, you need to open a brokerage account-you can do it online using this link.
Indeed, some index compilers do not limit themselves to an index, but create a set of similar tools. One of the most popular indicators is the index calculated by the Standard & Poor's (&) rating agency. These include the main S&P 501 index, which combines the 501 most valuable US companies (81% are traded on the New York Stock Exchange and 21% are traded on the American Stock Exchange). The Nasdaq Stock Exchange has its own index series-these indicators take into account the behavior of more than 4,501 US and foreign companies. These include the Nasdaq Composite Index (joining all listed companies together), Nasdaq National Market (US companies) and many industry indexes. In Europe, a notable index series is the index of the German stock market (31, price index, 110 industry index, etc.), France, which contains a different number of stocks (41, 81, 121, etc.). ...

As well as blue chip stock indexes, second-tier and broad market indexes. In addition, the exchange also calculates sectoral indexes and thematic indicators: alternative -11 index, innovative products and regional indexes.
In addition, the brokerage company can also be the index compiler. For example, calculate your own index, which includes related indexes (index and index futures, index and & 501 index futures), these indexes are used for futures trading on indexes, futures and other indicators.

According to the purpose of compiling a specific index, a list of stocks whose quotations are used to form the index is formed under certain conditions. The calculation method of the index means that financial instruments with similar characteristics are included. In particular, the share capital of companies whose shares are included in the index should not differ by an order of magnitude.

Generally speaking, it is believed that changes in the stock quotes of well-known large companies reflect the trading dynamics of smaller financial instruments in the same industry (this is an important note). In order to create hypotheses about the price dynamics of different companies in the same industry, without even including the index itself, a sectoral stock index is needed. Therefore, the sector index can help investors assess the investment prospects of companies in a specific economic sector at a specific point in time.

Electricity and natural gas supply company. Engaged in gas and electricity supply. An indicator based on the first three index values. It also provides professional communication for companies that unite on one or another basis. For example, the Nasdaq High-Tech Stock Exchange in the United States.

Normally, the index is compiled by region-for example, you can compile a list of stocks of companies that represent a specific country or group of countries (for example, EU or type code blocks).

The stock market recognized as a developed country and the emerging market index each include stocks from 28 companies listed as developing countries. Last weekend, many business media reported that the world’s leading index provider plans to exclude Russian companies from their indexes. In particular, it is reported that one of the most famous index compilers has announced many new indexes that do not include Russia. This is to help investors avoid investing in countries sanctioned by the European Union and the United States. He also announced that he is consulting on issues that may exclude Russian companies. Experts generally believe that such a decision is a blow to the Russian economy, because under Littleborough barburrito current conditions, investors will not invest in domestic companies.
A certain number of Western investment funds do not invest money in certain selected stocks, but in certain indexes. In this type of index, developers drive companies on a certain basis (industry, geography, economic conditions, etc.). This kind of index actually means acquisition. The index manufacturer has the shares of all companies included in the ratio determined by it. Therefore, excluding the company means that the funds now no longer buy the shares of the aforementioned companies, or even sell the companies they already own.

For our stock market, this is just another wave of foreign funds-this time purely speculative (that is, the process of not participating in the real economy): Of course, this is unpleasant (the market is falling, despite the decline Not much, because there is no more money here) so much)-but in principle, this is even good, because the less global funds, the less market volatility during various shocks.
The economy will not suffer such disruption at all-in a sense, it is not affected by these inflows and outflows at all: they are all carried out by the physical sector-and to a certain extent only the decline in the turnover of financial sector companies It can be considered as having a negative impact on the national economy.

It’s just that in recent years, the industry’s share of total growth is very high-so far the leader: Another thing is that most of these industries are not brokers, but banks that distribute a surprising number of consumer loans-despite this One process is already shrinking. In general, nothing terrible happened.
Generally, indexes exist for several purposes.
Understand the general dynamics of stock quotes for a certain group (company, country, industry, etc.). This data is usually used for speculative trading.

Some derivatives are based on the index itself-for example, the index has futures. In most cases, this type of contract is used to hedge risk (see the topic on futures for more details). If the index rises, then investors are optimistic about the prospects of investing in certain stocks.

Long-term monitoring of the index allows you to understand the investment environment of a particular country. Usually, in addition to the actual value of the index, information about the total turnover of the company’s stocks contained in it is also released. Changes in these numbers allow us to judge the general activity of traders when dealing with certain types of securities. Dozens (or even hundreds) of various indexes have been created and are actively used around the world. Any of these tools are useful and can perform specific tasks. Most importantly, in order to use an index, you need to know which stocks to calculate. You can then analyze the dynamics and understand the information contained in a particular index.
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