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Index weight

Index weight is a stock’s share of the index value, found by dividing its free-float market cap by the total for all index constituents. Index weight determines how much a stock’s price move affects the index.
Contents
  1. 1.Key points
  2. 2.Formula / calculation
  3. 3.Interpretation
  4. 4.Pitfalls
  5. 5.Frequently asked questions

Key points

  • High-weight stocks drive the index; index funds and benchmark-tracking institutions hold stocks in proportion to their weights.
  • A high weight means index-driven passive flows have a large effect on the stock; inclusions, exclusions and weight changes create price pressure.
  • weights change daily as prices and free float change.

Formula / calculation

Weight = (Share price × Free-float shares) / Σ (Free-float market cap of all constituents) × 100. BIST indices may cap the weight of a single stock. Yatırımcı.AI stock pages list the indices a stock belongs to and its weights.

Interpretation

A high weight means index-driven passive flows have a large effect on the stock; inclusions, exclusions and weight changes create price pressure. A stock’s BIST 30 weight is also affected by futures activity.

Pitfalls

weights change daily as prices and free float change. A high-weight stock is not automatically a good investment. Do not confuse index weight with the free float ratio.

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Related terms

Frequently asked questions

Index weight is a stock’s share of the index value, found by dividing its free-float market cap by the total for all index constituents.

Weight = (Share price × Free-float shares) / Σ (Free-float market cap of all constituents) × 100. BIST indices may cap the weight of a single stock. Yatırımcı.AI stock pages list the indices a stock belongs to and its weights.

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