The S&P is calculated using “a float-adjusted, market capitalization weighted methodology”. It does this by measuring the value of the stocks of the 500 largest, or more accurately 505, companies listed on the New York Stock Exchange, or Nasdaq Composite. Float adjusted means that the SPX is continually recalculated according to the number and price of shares trading. If a company issues or removes shares, then the index is recalculated to reflect this. Market capitalization is a way of measuring the total value of a public company. It is calculated by multiplying the price of a stock by its total number of outstanding shares. The weighted methodology means that the companies in the index are not valued equally. Rather, companies with a larger market cap make a greater contribution. Hence, the 10 largest companies account for approximately 25% of the index’s entire market capitalization.null