The riskiness of investments such as securities, commodities, indexes, or mutual funds is measured using an indicator developed by Peter G. Martin and Byron B. McCann. It is calculated by taking into account the depth and duration of recent peak drawdowns. A high UI value indicates that the security is overly risky, and an investor who holds it will most likely have to wait longer for the investment's price to return to recent highs.

The Ulcer Index (UI) is a technical analysis indicator designed to measure investment risk by quantifying the depth and duration of price declines from recent highs. Developed by Peter Martin in the 1980s, the UI differs from traditional volatility metrics by focusing solely on downside risk. It calculates the percentage drop from the most recent peak for each day, then averages these values over a specified period. A higher UI indicates a more significant and prolonged drawdown, reflecting greater potential for investor stress and anxiety. This tool is particularly useful for comparing the risk profiles of different assets or strategies, helping traders and investors manage their exposure to adverse market movements.