SPY and the Index
TenPercent
S&P 500, only went up 1.03 percent? Not that I'm complaining. I'm
quite pleased, except for the days that SPY goes down more than the
index goes down.
There's not suppose to be any leverage in SPY like there is in
QLD, the Nasdaq-100 ETF that is leveraged by 2.
Dear Leader
"TenPercent" <tenpe...@not-real-address.com> wrote in message
news:46ae6f77$0$79282$892e...@auth.newsreader.octanews.com...
moron
TenPercent
I forgot to mention that today's 53 basis point difference in SPY's
movement relative to the index's movement is more than a 51 percent
betterment. That's a substantial difference.
TenPercent
>
> moron
========
I'll ignore the meaningless comment from the meaningless person.
catalpa
"TenPercent" <tenpe...@not-real-address.com> wrote in message
news:46ae6f77$0$79282$892e...@auth.newsreader.octanews.com...
What percent did the SPY go down on Friday as compared to the S&P 500 cash?
The SPY trades in line with all the other S&P 500 derivatives, not the S&P
500 cash.
Dear Leader
your OP was stupid and moronic.
you best get out of the stockmarket and go take a stat course.
TenPercent
> What percent did the SPY go down on Friday as compared to the S&P 500 cash?
> The SPY trades in line with all the other S&P 500 derivatives, not the S&P
> 500 cash.
========
Thanks for that explanation, catalpa.
Yahoo's cursory description of SPY seems to describe it as a unit
investment trust without mention of derivatives, but I will bet on you.
Yahoo: "SPDR Trust is an exchange-traded fund that holds all of the S&P
500 Index stocks.
"It is comprised of undivided ownership interests called SPDRs. The fund
issues and redeems SPDRs only in multiples of 50,000 SPDRs in exchange
for S&P 500 Index stocks and cash."
Bill Reid
> catalpa wrote:
>
> > What percent did the SPY go down on Friday as compared to the S&P 500
cash?
> > The SPY trades in line with all the other S&P 500 derivatives, not the
S&P
> > 500 cash.
>
>
> Yahoo's cursory description of SPY seems to describe it as a unit
> investment trust without mention of derivatives, but I will bet on you.
>
> Yahoo: "SPDR Trust is an exchange-traded fund that holds all of the S&P
> 500 Index stocks.
>
> "It is comprised of undivided ownership interests called SPDRs. The fund
> issues and redeems SPDRs only in multiples of 50,000 SPDRs in exchange
> for S&P 500 Index stocks and cash."
Well, note carefully he said "TRADES in line" with the other derivatives,
NOT that it actually holds any derivatives (although some ETFs can and do
hold derivatives to kind of "synthesize" the holding of the actual
securities
to a certain extent, sometimes).
As to the apparent price differential, in general it is nothing more than
our
old friend supply and demand...people were buying SPY more aggressively
than people were willing to sell it, so the price went up. And yes, this
can
and does lead to arbitrage possibilities (traders exploiting the differences
in prices between securities that ostensibly should have the same price).
In fact, there are even offiically-designated ETF "participants" (market
makers) who do that for a living, and you can bet that there is plenty of
other arbitrage between futures and other derivitave markets, and the
actual S&P stocks themselves, going on at any time.
In theory, over time, this all evens out...what's interesting to me is the
overall trading impact of these funds and funds of funds and funds of
funds of funds going on now, so similar to the "bucket shops" of the
late 1920s...
---
William Ernest Reid
Post count: 712
TenPercent
is nothing more than our old friend supply and demand...people were
buying SPY more aggressively than people were willing to sell it, so
the price went up."
Thanks for your informed input Bill. The behavior you describe gives
SPY characteristics somewhat similar to a closed-end fund rather than
the open-end fund it actually is. By the way, anyone looking to double
their leverage with SSO versus plain ole SPY really should read this
article comparing SSO and SPY over a 3-month period and over 6 months.
SSO can be a weapon of mass asset destruction even though, like SPY,
it's correlated to move up positively with the market as the S&P 500
moves up.
Article:
http://biz.yahoo.com/ifunds/070620/20070620_leverageetf_com_etf_jb.html?.v=1