Market Average

DEFINITION of 'Market Average'

A measure of the overall price level of a given market, as defined by a specified group of stocks or other securities. A market average equals the sum of all current values of stocks in the group divided by the total number of shares in the group.

BREAKING DOWN 'Market Average'

A market average measurement is a simple way to evaluate the price level of a group of stocks. For example, the Dow Jones Industrial Average, which is a price-weighted average, covers 30 blue chip stocks listed on the NYSE and is widely used to track overall U.S. stock market performance.

RELATED TERMS
  1. Price-Weighted Index

    A stock index in which each stock influences the index in proportion ...
  2. Industry Group

    A classification method for individual stocks or companies, usually ...
  3. Value Change

    An adjustment made to a stock's price to reflect the number of ...
  4. Average Price

    1. A representative measure of a range of prices that is calculated ...
  5. Simple Moving Average - SMA

    A simple, or arithmetic, moving average that is calculated by ...
  6. Rule Of 18

    A rule whereby the sum of the inflation rate and the P/E ratio ...
Related Articles
  1. Investing Basics

    What's a Price-Weighted Index?

    A price-weighted index is a stock index in which the proportion of each member’s price-per-share determines its influence.
  2. Trading Strategies

    Technical Analysis: Moving Averages

    By Cory Janssen, Chad Langager and Casey MurphyMost chart patterns show a lot of variation in price movement. This can make it difficult for traders to get an idea of a security's overall trend. ...
  3. Professionals

    Market Indexes and Averages

    Market Indexes and Averages
  4. Professionals

    Group Life Insurance

    Group Life Insurance
  5. Technical Indicators

    Use Moving Averages to Buy Stocks

    A moving average constantly updates a stock's average price, but it cannot predict a stock's performance.
  6. Investing Basics

    Why You Should Understand The Stock Market

    Even if you don't invest a cent in stocks, you should still understand how the stock market works. Find out why.
  7. Financial Advisors

    How Financial Advisors Can Learn from Their Peers

    Advisor study groups can be a big help in building a top practice. Here's a guide to creating one.
  8. Investing

    The Dow Jones Industrial Average

    Learn how this price-weighted index performs and the ways to interpret its movements.
  9. Term

    How Market Segments Work

    A market segment is a group of people who share similar qualities.
  10. Investing Basics

    Explaining Market Value of Equity

    Market value of equity is the total value of all the outstanding stock as measured in the stock market at a particular time.
RELATED FAQS
  1. Why is the Dow Jones Industrial Average (DJIA) price weighted?

    Learn how the Dow Jones Industrial Average has told the story of the broad market through its simple, price-weighted calculation ... Read Answer >>
  2. What is the difference between the Dow Jones Industrial Average and the S&P 500

    Learn about the Dow Jones Industrial Average and the S&P 500, including interesting facts about these indexes, and discover ... Read Answer >>
  3. What does the Dow Jones Industrial Average measure?

    Learn about what the Dow Jones Industrial Average measures and discover the meaning of changes in this important and widely ... Read Answer >>
  4. What's the difference between the Dow Jones Industrial Average and the S&P 500?

    The major difference between these two indexes is that the Dow Jones Industrial Average (DJIA) includes a price-weighted ... Read Answer >>
  5. When can you trade the stocks in the Dow Jones Industrial Average (DJIA)?

    Find out when you can trade shares linked to the Dow Jones Industrial Average during NYSE and Nasdaq trading sessions. Read Answer >>
  6. I keep hearing about the 50-day, 100-day and 200-day moving averages. What do they ...

    Whether you are using the 50-day, 100-day or 200-day moving average, the method of calculation and the manner in which the ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center