S&P 500 Investing &Trading System
Index Derivatives - S&P 500 Stock
Apart from purchasing the individual stocks in the S&P 500, investors may also purchase shares of an exchange-traded fund (ETF) which represents ownership in a portfolio of the equity securities that comprise the Standard & Poor's 500 Index. One of these ETF's is called the Standard & Poor's Depositary Receipts (SPDRs, pronounced "spiders"), and the ticker symbol is SPY. Typical volume for the SPDR is over 200 million shares per daythe highest of any US stock.
There is also the iShares S&P 500 (Symbol: IVV), which is similar to the SPDRs, but is structured differently. Rydex also offers an ETF, Rydex S&P Equal Weight (Symbol: RSP), which provides equal exposure to all the companies in the S&P 500.
Several mutual fund managers also provide index funds that track the S&P 500, the first of which was The Vanguard Group's (fund: VFINX).
Many index funds and exchange-traded funds track the performance of the S&P 500 by holding the same stocks as the index, in the same proportions, and thus attempting to match its performance (before fees and expenses). Partly because of this, a company which has its stock added to the list may see a boost in its stock price as the managers of the mutual funds must purchase that company's stock in order to match the funds' composition to that of the S&P 500 index.
Exchange Traded Funds (ETFs) & iShares, Options & Futures Trading / Futures Contracts
|Securities||Issuer||Type||Symbol / Root|
|S&P 500 Index Fund||AMEX||ETF||IVV|
|S&P 500/BARRA Growth Index Fund||AMEX||ETF||IVW|
|S&P 500/BARRA Value Index Fund||AMEX||ETF||IVE|
|SPDRS (Standard & Poor's Depositary Receipts)||AMEX||ETF||SPY|
|S&P 500 Index Linked Notes||Bank of America||ETF||BOA.A|
|S&P 500 "MITTS"||Merrill Lynch||ETF||FML|
|S&P 500 "MITTS"||Merrill Lynch||ETF||MLF|
|S&P 500 "MITTS"||Merrill Lynch||ETF||MPF|
|S&P 500 Callable Notes||Morgan Stanley||ETF||JMS.A|
|S&P 500 Index "TIERS"||Salomon Smith Barney||ETF||RSB|
|S&P 500 Principal Protected Notes||Salomon Smith Barney||ETF||ASB|
|S&P 500 Index "TIERS"||Structured Products Corp.||ETF||HSB|
|S&P 500 Index "TIERS"||Structured Products Corp.||ETF||SRB|
|BULS linked to the S&P 500 Index||UBS AG||ETF||BUL.D|
|BULS linked to the S&P 500 Index||UBS AG||ETF||BUL.E|
|S&P 500 Index Options||CBOE||Options||SPX|
|S&P Long-Dated Options||CBOE||Options||SPL|
|Emini S&P 500||CME||Options on Futures||ES|
|S&P 500||CME||Options on Futures||SP|
|S&P 500 Barra/Growth Index||CME||Options on Futures||SG|
|S&P 500 Barra/Value Index||CME||Options on Futures||SU|
|Emini S&P 500||CME||Futures||ES|
|S&P 500 Barra/Growth Index||CME||Futures||SG|
S&P 500 Index: Trading Options Contracts
Investors have used options on the S&P 500 (SPX) index for a variety of purposes over the past 18 years, including investing, hedging, asset allocation, and the management of risk.
Investors appreciate many features of the SPX options, including:
- the fact that the options are tied to the world's leading benchmark for institutional investors;
- SPX options are powerful, flexible tools that allow investors to synthetically adjust their positions to a 500-stock portfolio;
- these listed options minimize counterparty risk - they are guaranteed by The Options Clearing Corporation, a triple-A rated clearinghouse.
- there is price discovery in competitive, SEC-regulated auction markets.
S&P 500 Index Exchange Traded Funds & Index Funds
With ETFs based on broad-market, sector and international indexes, you have a wide range of investment opportunities. You have the ability to establish long-term investments in the market performance of the leading companies in the leading industries in the United States, or you can custom tailor asset allocations using a range of ETFs to fit your particular investment needs or goals. You can hold ETFs based on a broad-market index as a core investment, for example, then use additional ETFs to increase your exposure in sector and/or international index performance.
The SPDR Trust Series I is a pooled investment designed to provide investment results that generally correspond to the price and yield performance, before fees and expenses, of the S&P 500 Index. iShares S&P 500 Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P 500 Index . There is no assurance that the performance of the S&P 500 Index can be fully matched.
S&P 500 index futures trading contracts are traded through an auction-like process, with all bids and offers on each contract made public. Through this, a prevailing market price is reached for each contract, based primarily on the laws of supply and demand. This forum is a useful - and essential - element in a free market economy. You might be surprised to know that the futures markets are rarely used to actually buy or sell the physical commodity or financial instrument being traded; they're used for price estimation, risk management, and for some people, investment and profit.