ABX index



A financial benchmark that measures the overall value of mortgages made to borrowers with subprime or weak credit. The ABX index uses credit default swap contracts to come up with an overall value and is made up of 20 bonds that is comprised of groups of subprime mortgages. Using this index, financial institutions are able to determine if the market for these securities are improving or worsening. Also referred to as Asset-Backed Securities Index.


For example, if the ADX Index increases, this means there is less risk with subprime mortgages and vice versa. It was created by Markit and is useful for investors interested in subprime mortgages. Subprime mortgages being mortgages given to customers with faulty or weak credit.

  1. Benchmark

    A standard against which the performance of a security, mutual ...
  2. Credit Default Swap - CDS

    A particular type of swap designed to transfer the credit exposure ...
  3. Contingent Credit Default Swap ...

    A variation on the credit default swap (CDS). In a simple CDS, ...
  4. Asset Backed Credit Default Swap ...

    A redit default swap wherein the reference asset is an asset-backed ...
  5. Subprime Mortgage

    A type of mortgage that is normally made out to borrowers with ...
  6. Asset-Backed Security - ABS

    A financial security backed by a loan, lease or receivables against ...
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  1. How did the ABX index behave during the 2008 subprime mortgage crisis?

    Markit Group Ltd. created the ABX index as a synthetic basket of goods designed to provide feedback on the subprime mortgage ... Read Full Answer >>
  2. How do traders use the ABX index?

    In January 2006, the financial services company Markit Group Ltd. created the absolute breadth index (ABX) to measure the ... Read Full Answer >>
  3. Do FHA loans have prepayment penalties?

    Unlike subprime mortgages issued by some conventional commercial lenders, Federal Housing Administration (FHA) loans do not ... Read Full Answer >>
  4. Can FHA loans be refinanced?

    Federal Housing Administration (FHA) loans can be refinanced in several ways. According to the U.S. Department of Housing ... Read Full Answer >>
  5. Can FHA loans be used for investment property?

    Federal Housing Administration (FHA) loans were created to promote homeownership. These loans have lower down payment requirements ... Read Full Answer >>
  6. Do FHA loans have private mortgage insurance (PMI)?

    he When you make a down payment from 3 to 20% of the value of your home and take out a Federal Housing Administration (FHA) ... Read Full Answer >>

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