Czech Traded Index (CTX) belongs to a family of currently five Wiener
Börse-owned indexes (the so-called CECE Index family) that cover the
emerging stock markets of the four Viegrad countries (Czech Republic,
Hungary, Poland, Slovak Republic). In contrast to the local PX50 index,
the CTX is not primarily intended to qualify as a benchmark for the
performance of the Czech stock market. The foremost purpose of the CTX
is to serve as an underlying for derivatives trading. Therefore the
main emphasis lies on ensuring the tradability of each component stock
and on preserving the replicability of the CTX. Correspondingly, the
CTX comprises a sample of only 9 Czech blue chip stocks which represent
a basket of both relatively liquid and sufficiently tradable Czech stocks.
Despite its quite narrow base, the CTX represented 58.7% of the aggregate
first tier market capitalization of the Prague Stock Exchange at the
Regarding its construction principle,
the CTX - as the other members of the CECE Index family - belongs to
the category of capitalization-weighted value ratios with daily chaining.
Like the Austrian Traded Index (ATX), the CTX incorporates stock-specific
free float factors which are intended to ensure that the weight of a
particular stock roughly corresponds to the fraction of the registered
capital that is actually available for public trading on the stock exchange.
These free float factors are set to 0.5 for stocks with a free float
equal to or less than 50% and to 1 otherwise.
Given the narrow sample of index stocks, the very disproportionate distribution
of firm sizes after the various waves of privatization in the Czech
Republic mandated the use of a second stock-specific correction factor.
The so-called representation factor is applied in the case of three
companies, whose high market capitalization would otherwise unduly distort
the representativeness of the index. The inclusion of representation
factors is considered as temporary until a broader index base sufficiently
diminishes the weight of individual index stocks. At present, the representation
factor assumes a value of 0.5 so as to reduce the accountable market
capitalization of a certain company by 50%. Since the CTX is intended
to reflect only price changes caused by market fluctuations, the index
is adjusted for technical price changes except for those due to dividend
payments. If a stock is suspended from trading, the last available price
is used for calculating the index.