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Randy Murphree wrote:
> Since I only subscribe to the CME, I can get the SPY, but not the SPX. Can
> someone explain to me the difference. Symbol Universe calls it "S&P 500
> Index TRUE". What's that compared to the cash?
The difference is that the SPX is an index, calculated as a function of the
price of its components (S+P 500), whereas SPY (S+P Deposit Receipts, or
"Spiders") is traded like a stock. SPX would give you the true *cash* index,
instead of the current market for the receipts of the Spiders, which are traded
on AMEX, with its price depending on the current market. Generally, though,
SPY trades at about one-tenth the value of SPX, since this is its listed
value. Although SPY is slow-moving compared to many equities, and cannot be
leveraged the way futures can, it is immune from the downtick rule, and thus
can be shorted freely, which can come in handy at times. As far as its use as
a market indicator, the SPX would be superior, since it is a direct measure of
the cash index, with SPY being a derivative of it.
A.J.
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