Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Spider (SPDR)

What it is:

A spider (SPDR) is an exchange-traded fund (ETF) that tracks the Standard & Poor's 500 Index. SPDR stands for S&P Depository Receipts. However, the term can also refer to any ETF that tracks the S&P 500. The original SPDR ETF is managed by State Street Global Advisors.

How it works (Example):

A SPDR is valued at one-tenth the S&P 500 Index and trades on the American Stock Exchange at about 10% of the dollar value level of the S&P 500. Each SPDR represents a unit of ownership in a trust that holds a portfolio of stocks that track the performance and dividend yield of an index.

SPDRs trade like stocks, and like stocks, they can be shorted, purchased on margin, and pay regular dividends.

Why it Matters:

SPDRs are a way for investors and institutions to invest in the broad U.S. market and bet on its direction. Like most ETFs, SPDRs offer tax advantages over actual index mutual funds in that investors have more control over capital gains distributions.

Related Terms View All
  • Auction Market
    Though most of the trading is done via computer, auction markets can also be operated via...
  • Best Execution
    Let's assume you place an order to buy 100 shares of Company XYZ stock. The current quote...
  • Book-Entry Savings Bond
    Savings bonds are bonds issued by the U.S. government at face values ranging from $50 to...
  • Break-Even Point
    The basic idea behind break-even point is to calculate the point at which revenues begin...
  • Calendar Year
    If Company XYZ starts its fiscal year on January 1 and ends its fiscal year on December...