Spiders - SPDR

What does 'Spiders - SPDR' mean

Spiders (SPDR) is a short form of Standard & Poor's depositary receipt, an exchange-traded fund (ETF) managed by State Street Global Advisors that tracks the Standard & Poor's 500 Index (S&P 500). Each share of spider contains one-tenth of the S&P index and trades at roughly one-tenth of the dollar-value level of the S&P 500. Spiders can also refer to the general group of ETFs to which the Standard & Poor's depositary receipt belongs.

BREAKING DOWN 'Spiders - SPDR'

Spiders are listed on the New York Stock Exchange (NYSE) after the acquisition of the American Stock Exchange (AMEX) under the ticker symbol SPY. By trading like stocks, spiders have continuous liquidity, can be short sold, bought on margin, provide regular dividend payments and incur regular brokerage commissions when traded.

Spiders are used by large institutions and traders as bets on the overall direction of the market. They are also used by individual investors who believe in passive management (index investing). In this respect, spiders compete directly with S&P 500 index funds.

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RELATED FAQS
  1. What is a spider and why should I buy one?

    The term spider is the commonly-used expression to describe the the Standard & Poor's Depository Receipt (SPDR). This ... Read Answer >>
  2. What is the difference between iShares, VIPERs and Spiders?

    iShares, VIPERs and spiders each represent different exchange-traded fund (ETF) families. In other words, an individual company ... Read Answer >>
  3. How does a point change in a major index effect its equivalent exchange-traded fund?

    The S&P 500 and Dow Jones Industrial Index (DJIA) are two of the most well-known indexes tracking the movement of the ... Read Answer >>
  4. Who's in charge of managing exchange-traded funds?

    An exchange-traded fund (ETF) is a security that tracks an index but has the flexibility of trading like a stock. Just like ... Read Answer >>
  5. Is it possible to invest in an index?

    First, let's review the definition of an index. An index is essentially an imaginary portfolio of securities representing ... Read Answer >>
  6. Why would a company choose to use global depositary receipts (GDRs) for financing?

    Learn why a company might choose to utilize global depositary receipts for financing, along with the many other benefits ... Read Answer >>
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