Toronto Stock Exchange Composite Index
About S&P TSX Composite Index
TSX Composite, TSX, Stock Exchange, TSX Index, Exchange, TSX Composite Index, Stock, Toronto Stock Exchange, Canadian, Toronto Stock Exchange Composite Index
The S&P TSX Composite Index is designed to measure the market activity of stocks that are listed on the Toronto Stock Exchange. It is a leading index of the Toronto Stock Exchange is based on the prices of shares that comprise more than 70% of the market capitalization of the shares listed by the Toronto Stock Exchange (TSX). now a part of TMX Group Inc). The TSX is the largest Canadian Stock Exchange, the third largest stock exchange in North America and the seventh largest exchange in the world. The S&P TSX Composite is calculated and tracked by "Standard & Poor's and is widely regarded as the benchmark for Canadian equities and the barometer of Canada's economy. This index includes all common stocks and income trust units that are traded on the TSX exchange.
The S&P TSX Composite is a capitalization-weighted index of the largest companies that are listed on the Toronto Stock Exchange. The index calculations are based on market capitalization, but use a company's float, or shares that are readily available for trading, instead of the number of shares that have been issued and are outstanding. The formula for the index is
Index level= (Price of stock X Number of shares) / Index Divisor.
In the formula above, the TSX's portfolio dollar value is divided by "Index Divisor." This transforms the S&P TSX Composite Index into 5-digit, more easy-to- handle number, instead of an unwieldy figure consisting of ten or more numbers.
There are the main eligibility criteria to be included into the S&P TSX Composite Index:
- Domicile Eligibility Criteria: To be included into the index, a public company must be incorporated under Canadian laws and its shares must be traded on the Toronto Stock Exchange.
- Market Capitalization Eligibility Criteria: In order to be included in the index, any security of a public company must warrant a minimum weighting of 0.05% of the index or have a minimum weighted average price during the last three months and the last three trading days of the month-end prior to the exchange reviewing the index, of at l east $1 CDN.
- Liquidity Eligibility Criteria: A public company must be liquid. This means that the company's stock must be attractive to investors. In numerical terns, the dollar value of the trading volume and the number of transactions must exceed at least 0.025% of the sum of the trading volume of all eligible securities. To ensure that no single company dominates the trading, the trading volume and number of transactions are capped at a maximum of 15% of the value and number of all transactions.
The TSX Composite index cam be traded through the S&P/TSX Composite Index Mini Futures (SCF) or iShares CDN S&P/TSX Capped Composite Index Fund (XIC).