The Ulcer Index (UI) is a technical indicator that measures downside risk in terms of both the depth and duration of price declines. The index increases in value as the price moves farther away from a recent high and falls as the price rises to new highs. The indicator is usually calculated over a 14-day period, with the Ulcer Index showing the percentage drawdown a trader can expect from the high over that period.

The greater the value of the Ulcer Index, the longer it takes for a stock to get back to the former high. Simply stated, it is designed as one measure of volatility only on the downside.