Narrow-Based

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Narrow-Based

Generally referring to an index, it indicates that the index is composed of only a few stocks, generally in a specific industry group. See also broad-based.

Narrow-Based

Describing an index that consists of only a few stocks. Generally speaking, a narrow-based index only includes stocks from one industry. These indices are often useful in gauging the performance of the industries they track, but rarely give an indication on movements in the broader economy. See also: Broad-based.

narrow-based

Of or relating to an index composed of a limited number of securities or securities representing a particular segment of the whole. For example, the Dow Jones Transportation Average is narrow-based because it is composed only of the stocks of transportation companies. Compare broad-based.
References in periodicals archive ?
Since then, the scope of the products has been broadened to include equities, equity options, narrow-based index options, and certain security futures products (such as single stock futures).
Security futures products include both single stock futures and narrow-based index futures.
A single stock futures contract is a legally binding agreement between two parties to purchase or sell in the future, a specific quantity of shares of a single stock or narrow-based index.