InsiderFlow › Glossary › What is a stock index?

What is a stock index?

A stock index is a number that summarizes the performance of a group of stocks: the thermometer of a market.

An index groups a set of securities by a rule (the 500 largest US companies for the S&P 500, the 40 largest Italian ones for the FTSE MIB) and condenses their performance into a single value. When you hear "the market is up today", it usually refers to an index.

You can't buy an index directly, but you can replicate it through ETFs and index funds. Indexes also serve as benchmarks: the yardstick used to judge anyone managing a portfolio.

Concrete example

If the S&P 500 goes from 5,000 to 5,100 points, the basket of the 500 largest US companies rose 2% on average.

How you see it in InsiderFlow

On InsiderFlow these concepts come alive on real data: what big funds and insiders are buying, explained every day.

Frequently asked questions

What is the world's most important index?

The S&P 500, covering the 500 largest listed US companies: the global reference for the stock market.

How do you invest in an index?

Through ETFs or index funds that replicate its composition.