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ABX index

Source: Investopedia
This Article has been Edited for Accessibility

ABX index

What is 'ABX index'

A financial benchmark that measures the overall value of mortgages made to borrowers with subprime or weak credit. The ABX index uses credit default swap contracts to come up with an overall value and is made up of 20 bonds that is comprised of groups of subprime mortgages. Using this index, financial institutions are able to determine if the market for these securities are improving or worsening. Also referred to as Asset-Backed Securities Index.

Explaining 'ABX index'

For example, if the ADX Index increases, this means there is less risk with subprime mortgages and vice versa. It was created by Markit and is useful for investors interested in subprime mortgages. Subprime mortgages being mortgages given to customers with faulty or weak credit.


Additional Resources

  1. The Pricing Of Subprime Mortgage Risk In Good Times And Bad ... [citeseerx.ist.psu.edu]
  2. Integrating The Economic Accounts: Lessons From The Crisis [brookings.edu]
  3. Leverage, Default, And Forgiveness [dido.econ.yale.edu]
  4. The Bear's Lair: Index Credit Default Swaps And The ... [haas.berkeley.edu]
  5. The Economics Of Structured Finance [ssc.wisc.edu]
  6. Abx.he Indexed Credit Default Swaps And The ... [escholarship.ucop.edu]