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 ?
We are confident Penson's customers will find multiple hedging and other trading opportunities in our liquid markets of more than 100 futures on single stocks and narrow-based indexes.
We are committed to becoming the global leader for futures on stocks, narrow-based indexes and Exchange Traded Funds, so offering a streaming, real-time data product is an important addition for us," said OneChicago chief operating officer Robert Walsh.
Island Futures will allow market professionals to electronically display and match orders for single stock futures and narrow-based indexes.
These narrow-based indexes are highly correlated to their broader industries and give traders and other market participants an effective tool to plan sector rotation strategies.
CME is a joint venture partner in OneChicago, LLC, which expects to launch single stock futures and narrow-based indexes after the final regulatory and back-office hurdles are cleared for trading these products in the United States.