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 ?
The Commodities Futures Modernization Act of 2000 amended the Commodity Exchange Act to allow trading of futures contracts on individual equity securities and narrow-based indices of equity securities.
With this new capability, SunGard customers will be able to trade OneChicago single stock futures and narrow-based indices immediately upon OneChicago's launch, expected later this year.
Upon its launch, OneChicago initially will list 80 to 85 well-known individual stocks and at least 15 narrow-based indices on key economic sectors.
OneChicago, LLC today announced seven new narrow-based indices on which it will list futures contracts when trading at the Exchange begins later this year.
These products augment the eight narrow-based indices OneChicago previously announced on Airlines, Biotech, Computer Hardware, Defense, Investment Banking, Oil Services, Retail, and Semiconductor Components.
Many of our customers have told us of their need for products that provide exposure to the performance of specific industries, and OneChicago narrow-based indices provide a capital-efficient vehicle for meeting this need.
Using OneChicago narrow-based indices, market participants may increase or decrease portfolio weightings in a focused industry sector with a single trade execution.
At launch, OneChicago will list over 80 single stock futures in addition to futures contracts on narrow-based indices.
CME), and Chicago Board of Trade (CBOT(R)) for trading single-stock futures and narrow-based indices.