I was looking for information on how the NDX is calculated but couldnât find anything. Does each element have the same weighting on the index or do changes in the price of larger companies move the index more than changes in the price of smaller companies? It would be very useful to have the formula used to calculate the NDX. Is it available anywhere? Thank for your help.
Yes, the index calculation is weighted by capitalization. The weights are changed ("rebalanced") periodically. The current weights are here http://www.iseoptions.com/index_components.aspx?index=NDX The top 10 components represent about 40% of the index.
Thanks a lot for the reply and the inforamtion. I was having trouble finding any information so that's really helped me out. Thanks again.