TRADING GLOSSARY
Market-capitalisation-weighted index
A market-capitalisation-weighted index assigns each constituent a weight based on its market value relative to the combined market value of all constituents. Many such indices use free-float-adjusted values, and some apply caps to limit individual weights.
EXAMPLE
In a hypothetical uncapped index with £200 million in combined eligible market value, a company worth £40 million receives a 20% weight.
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Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Glossary definitions are general education only and are not investment advice. Risk disclosure