By researching the stock market, Lithuanian mathematician atVilniusUniversity, Dr.Algirdas Javtokasdefines Stock Market Risk Index (further SMRI). According to the mathematician, the SMRI can reflect the risk of the stock market more precisely. The SMRI as it is defined by Dr. A. Javtokas was not investigated by other researchers or analysts.

Analyzing the SMRI trends, Dr.Algirdas Javtokasdescribes today's market's risk as "struggling in the extremes of its limits. In the long run perspective the risk is going to normalize. It could be seen from the graphics and a closer analysis."

The absence of the universal risk index has motivated Dr.Algirdas Javtokasto revise all available indexes and indicators of the market's risk. Today one of the most popular risk indicators is called beta. The beta cannot measure the risk of the market as a whole.

Dr.Algirdas Javtokaspurpose was to create the index which would reflect the risk of the market as a whole. For this purpose he introduces different indexes for U.S.,EuropeandAsia.

The SMRI is defined in a way to have a close relationship with the main stock market's indexes like DOW in U.S.; FTSE 100, DAX and CAC 40 inEurope; NIKKEI 225 and Hang Seng inAsia.

The values of the SMRI begins at 0 and SMRI=0 means the market is risk free. The SMRI between 0 and 1 means the market is stable, and if SMRI is bigger than 1 - the market is becoming more and more risky.

The index helps investors to determine the risk of the market from different perspectives of time. It can be calculated for a particular period like a day, week, month or year. "It can reflect market's risk of the present minute or even a second," says Dr. Javtokas.