FTB-C000202 / Financial concept

Inverse Index

An inverse index targets a negative multiple of an underlying index's periodic return under a declared reset methodology.

Also known asshort indexinverse daily-reset index

Intermediate 1 linked topicPublished

Definitions

In plain terms

A minus-one-times daily index aims to rise about 1% when the underlying falls 1% for that day before costs.

Technical

The methodology specifies negative exposure, underlying variant, reset, financing and collateral returns, fees, compounding, floors, holidays, and disruption controls.

Scope

It is not a constant inverse of the underlying level or cumulative return over long horizons.

Examples

  • A governed methodology records inverse index with its source, cutoff, units, parameters, and effective version.

Common misconceptions

  • Inverse Index does not have one universal implementation without the declared methodology, data basis, and constraints.

Concept relationships

Prerequisites

Contrasts with

Where this concept is used

Tutorials planned

These catalogued topics use this concept, but their complete build has not shipped yet.

  • D03-F05-A02 Primary

Evidence and governance

  1. S&P Dow Jones Indices Index Mathematics Methodology S&P Dow Jones Indices · first party methodology

    Supports: preferred label, short definition, technical definition

    Limits: Authoritative for the provider's indices; conventions are not universal defaults for every index or security-level return series.

  2. 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-batch-004
Last reviewed
2026-07-27
Next review
2027-07-27
Record status
published
Written by

Fintech engineer building market-data and financial systems, and the author of every article, glossary record, and reference implementation on The Fintech Builder.