Spoo

AAA

DEFINITION of 'Spoo'

A slang term for an S&P 500 contract that trades on the Chicago Mercantile Exchange (CME). The S&P 500 contracts trade on the CME independent of the S&P 500 index itself, and expire quarterly in the months of March, June, September and December.

The word originated in the XMI pit on the America Stock Exchange (AMEX) in New York. It comes from the symbol for the September contract: "SPU". Even though the name is based on the September contract symbol, the term is used to describe contracts of all expiries. When somebody speaks of the spoo, they are referring to the current, most active month trading.

INVESTOPEDIA EXPLAINS 'Spoo'

Trading a spoo is a bet on where the S&P 500 index will be at some point in the future, so these securities almost always trade at a premium to the fair value of the index. This is because of the assumption that the value of equities will rise as time progresses.

RELATED TERMS
  1. E-Mini

    An electronically traded futures contract on the Chicago Mercantile ...
  2. American Stock Exchange - AMEX

    The third-largest stock exchange by trading volume in the United ...
  3. Futures

    A financial contract obligating the buyer to purchase an asset ...
  4. Standard & Poor's 500 Index - S&P ...

    An index of 500 stocks chosen for market size, liquidity and ...
  5. Chicago Mercantile Exchange - CME

    The world's second-largest exchange for futures and options on ...
  6. Exchange Traded Derivative

    A financial instrument whose value is based on the value of another ...
RELATED FAQS
  1. Who sets the price of commodities?

    Commodities are extremely important as they are essential factors in the production of other goods. A wide of array of commodities ... Read Full Answer >>
  2. How does the risk of investing in the electronics sector compare to the broader market?

    The risk of investing in the electronics sector closely approximates the risk of investing in the broader market. The electronics ... Read Full Answer >>
  3. How do markets account for systematic risk?

    Systematic risks provide markets with an unpleasant quandary. Economists, policy makers, directors, fund managers and investors ... Read Full Answer >>
  4. What stage of the economic cycle is usually the best for an investor to enter the ...

    The best time during the economic cycle for an investor to enter the electronics sector is when he has confidently identified ... Read Full Answer >>
  5. How do S&P 500 futures work?

    S&P 500 futures are a type of capital asset contract that provides a buyer the right to a predetermined selection of ... Read Full Answer >>
  6. Can I use the current yield to compare a bond to an equity investment?

    Investors should be careful when comparing the current yield on a debt security with the growth of an equity security. Yield ... Read Full Answer >>
Related Articles
  1. Investing Basics

    An Introduction To Stock Market Indexes

    Investopedia explains the five most talked about indexes and what makes them all different.
  2. Options & Futures

    Minis Provide Low-Cost Entry To Futures Market

    These contracts provide access to commodities without a huge capital commitment.
  3. Personal Finance

    How Stock Market Indexes Changed Investing

    Find out how the first market averages were calculated and what they mean for investors today.
  4. Trading Strategies

    Market Strength Tutorial

    Here you can learn about some of the indicators that traders and brokers use to determine the direction and strength of the market's present trend.
  5. Mutual Funds & ETFs

    Index Investing

    Get to know the most important market indices and the pros and cons of investing in them.
  6. Investing Basics

    What's the Primary Market?

    The primary markets are where investors can get first crack at a new security issuance.
  7. Investing Basics

    What is the Coupon?

    In the financial world, “coupon” represents the interest rate on a bond.
  8. Investing Basics

    Explaining the Coupon Rate

    Coupon rate is the stated interest rate on a fixed income security.
  9. Investing Basics

    What is Cyclical Stock?

    A cyclical stock is an equity security whose price is affected by ups and downs in the overall economy.
  10. Investing Basics

    What are Ordinary Shares?

    Ordinary shares are any type of shares that are not preferred and don’t pay any type of predetermined dividend amount.

You May Also Like

Hot Definitions
  1. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  2. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  3. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  4. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  5. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
Trading Center