The weighting capThe weighting cap is simply the upper limit that is applied ... More is simply the upper limit that is applied to a company/data set within an index. For example in the (NASDAQ 100The NASDAQ 100 index (NDX) lists the largest non-financial c... More) if a company achieves a marketWhat are value stocks? A value company is a company that app... More cap of above 24% of the index, then it has to be rebalanced.
Various equations are used to calculate the weighting of a indices, such as and market-weighted index
It is important to note with weighting caps, that while some indices impose a cap on the amount of weighting a company/stock can have, others do not.
