What is the S&P/ASX 200 index?

This index is the benchmark for the Australian stock market. It covers around 80% of the country's equity market capitalization, with companies drawn from the Australian Securities Exchange.

Where have you heard about the S&P/ASX 200 index?

The index is often used as a barometer for the performance of the Australian economy. It's often referred to by the AXJO symbol or just XJO.

What you need to know about the S&P/ASX 200 index.

While it's referred to as the 200 index, it is relatively fluid and so sometimes doesn't have 200 companies listed. The index is market-capitalisation weighted and float adjusted, meaning bigger companies contribute more. It is rebalanced quarterly and is considered to be very liquid and very tradable.

It was started in March 2000 with a value of 3,133.3 and peaked at 6,748 in October 2007 before falling to nearly 3,000 in 2009 as the financial crisis hit hard.

Some major companies are listed on the index, including the Commonwealth Bank of Australia, News Corporation and QBE Insurance. There is also an ETF that owns and tracks this index.