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.

  1. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth ...
  2. Blue Chip

    A nationally recognized, well-established and financially sound ...
  3. Index

    A statistical measure of change in an economy or a securities ...
  4. Mean

    The simple mathematical average of a set of two or more numbers. ...
  5. Dow Jones Industrial Average - ...

    The Dow Jones Industrial Average is a price-weighted average ...
  6. Weighted Average Market Capitalization

    A stock market index weighted by the market capitalization of ...
Related Articles
  1. Bonds & Fixed Income

    How Now, Dow? What Moves The DJIA?

    Find out how this index tracks market movements and where it falls short.
  2. Mutual Funds & ETFs

    Index Investing

    Get to know the most important market indices and the pros and cons of investing in them.
  3. Investing

    How to Spot Secular Bull Markets vs. Secular Bear Markets

    A guide to identifying secular bull and bear markets.
  4. Options & Futures

    Terrorism's Effects on Wall Street

    Terrorist activity tends to have a negative impact on the markets, but just how much? Find out how to take cover.
  5. Mutual Funds & ETFs

    Benchmark Your Returns With Indexes

    If your portfolio is always falling short, you may not be making an apples-to-apples comparison.
  6. Stock Analysis

    How the Dow Components Could Point to a Correction

    For the most part, the Dow has been on fire since March 2009. So the profits of its components are growing, right?
  7. Investing Basics

    Understand How the Stock Market Works

    Learn what it means to own stocks and shares, why shares exist, and how you buy and sell them.
  8. Stock Analysis

    The 3 Most Shorted Dow Stocks

    Read about three heavily shorted stocks that are components of the Dow Jones Industrial Average, including one company with recent success.
  9. Economics

    Where Would the Dow Be Without Fed Intervention?

    What would the Dow look like without the accommodative monetary policies the Federal Reserve has implemented since the financial crisis?
  10. Investing Basics

    3 Key Signs Of A Market Top

    When stocks rise or fall, the financial fate of investors change, as well. There are certain signs that can reveal a stock’s course, and investors don’t need to be experts to spot them.
  1. What is the best way to measure the total market?

    There is a variety of market indices which function as statistical gauges of the market's activities. Many investors look ... Read Full Answer >>
  2. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  3. What is the difference between shares outstanding and floating stock?

    Shares outstanding and floating stock are different measures of the shares of a particular stock. Shares outstanding is the ... Read Full Answer >>
  4. What is the difference between market risk premium and equity risk premium?

    The only meaningful difference between market-risk premium and equity-risk premium is scope. Both terms refer to the same ... Read Full Answer >>
  5. What is the difference between the QQQ ETF and other indexes?

    QQQ, previously QQQQ, is unlike indexes because it is an exchange-traded fund (ETF) that tracks the Nasdaq 100 Index. The ... Read Full Answer >>
  6. What is the difference between an investment and a retail bank?

    The activities and types of clients for an investment bank versus those for a retail bank highlight the primary difference ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Take A Bath

    A slang term referring to the situation of an investor who has experienced a large loss from an investment or speculative ...
  2. Black Friday

    1. A day of stock market catastrophe. Originally, September 24, 1869, was deemed Black Friday. The crash was sparked by gold ...
  3. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  4. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  5. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  6. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
Trading Center