(1) A marketleading COMMON STOCK , BOND, or sector index that acts as a proxy for broader sentiment and movement in the market. Tradable benchmarks, which generally feature significant LIQUIDITY and narrow BIDOFFER spreads, are often used as an indexing, pricing, or hedging reference for other securities or DERIVATIVES . (2) An index that is used to gauge the relative performance of other ASSETS , securities, or PORTFOLIOS. (1) Also known as BELLWETHER.
Black’s Law Online Dictionary
