Definitions
In plain terms
The divisor sets the starting level and can be changed to preserve continuity when corporate actions or constituent changes alter the numerator mechanically.
Technical
For a divisor-based index, level equals the eligible aggregate market value or price sum divided by the divisor; every divisor change needs effective time, cause, old and new state, and precision.
Scope
Divisor rules depend on the index methodology and are not interchangeable across price-weighted and capitalization-weighted indices.
Formula
D = MV / ID=MV/I| Symbol | Meaning | Unit |
|---|---|---|
MV | eligible index numerator or market value | methodology numerator unit |
I | target index level | index points |
Output unit: numerator units per index point
Examples
- A governed index record identifies index divisor with its applicable methodology version, effective time, source, and units.
Common misconceptions
- Index Divisor does not have one universal implementation without the named index methodology, data cutoff, and governance context.
Concept relationships
Prerequisites
Related
Required by
Where this concept is used
- ImportantSpecial-Dividend Adjustment: Preserve Return Meaning Across the Ex-DateD02-F02-A04
- ImportantBase-Date/Base-Value InitializationD03-F01-A01
- PrimaryIndex Divisor InitializationD03-F01-A02
- PrimaryDivisor Continuity AdjustmentD03-F01-A03
- PrimaryCorporate-Action Divisor BridgeD03-F01-A04
- ImportantIntraday Index-Level CalculationD03-F01-A05
- ImportantPrice-Weighted IndexD03-F02-A01
- ImportantTotal-Market-Cap IndexD03-F02-A02
- ImportantFree-Float Market-Cap IndexD03-F02-A03
- ImportantEqual-Weight IndexD03-F02-A06
- ImportantPrice-Return IndexD03-F04-A01
- ImportantGross Total-Return IndexD03-F04-A02
- ImportantNet Total-Return IndexD03-F04-A03
- ImportantDividend-Point IndexD03-F04-A05
Evidence and governance
- S&P Dow Jones Indices Index Mathematics Methodology S&P Dow Jones Indices · first party methodology
Supports: preferred label, short definition, technical definition, formula
Limits: Authoritative for the provider's indices; conventions are not universal defaults for every index or security-level return series.
- Fintech Builder Glossary Definition Contract The Fintech Builder · internal governed contract
Supports: variant distinction
Limits: Defines governed platform behavior rather than claiming these policies are universally prescribed by external McClellan methodology.
- Reviewed by
- fintech-builder-owner-approved
- Last reviewed
- 2026-07-27
- Next review
- 2027-07-27
- Record status
- published