Speculation Index

Written By
Paul Tracy
Updated November 4, 2020

What is a Speculation Index?

The speculation index measures the volume of trades on the American Stock Exchange (AMEX) versus trade volume on the New York Stock Exchange (NYSE).

How Does a Speculation Index Work?

The AMEX tends to list riskier stocks issued by smaller companies that are starting up or are trying to grow. By comparing volume on the AMEX versus that on the NYSE (which tends to list larger, well-established companies), the speculation index can provide insight into how much risk investors are taking on. In this respect, higher ratios are associated with higher levels of speculation, whereas lower ratios generally indicate that investors wish to stay with lower-risk investments.

Why Does a Speculation Index Matter?

Speculative investment occurs at collectively high levels when there is a generally bullish market sentiment. For this reason, when the speculation index reaches unusually high levels, many analysts and investors believe that it signals the end of an upward trend.

Activate your free account to unlock our most valuable savings and money-making tips
  • 100% FREE
  • Exclusive money-making tips before we post them to the live site
  • Weekly insights and analysis from our financial experts
  • Free Report - 25 Ways to Save Hundreds on Your Monthly Expenses
  • Free Report - Eliminate Credit Card Debt with these 10 Simple Tricks
Ask an Expert
All of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Speculation Index.
Be the first to ask a question

If you have a question about Speculation Index, then please ask Paul.

Ask a question

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

If you have a question about Speculation Index, then please ask Paul.

Ask a question Read more from Paul
Paul Tracy - profile
Ask an Expert about Speculation Index

By submitting this form you agree with our Privacy Policy

Don't Know a Financial Term?
Search our library of 4,000+ terms