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Under review

What’s the formula ?

anonymous 11 months ago in Marketplace updated by SA Editor Daniel Shvartsman 11 months ago 1

When a stock says its worth so many points how does that convert to dollars?

For instance S&P is 2,945.64. Is that the price per share?

Under review

Hi, thanks for the question. That appears to be correct, more or less - the S&P 500 represents the collective market cap of its components (share price * shares outstanding) divided by the sum of all the shares outstanding. It's not literally presented in dollars, but is the equivalent as I understand it. Here are some references:

https://us.spindices.com/documents/methodologies/methodology-index-math.pdf

https://en.wikipedia.org/wiki/S%26P_500_Index