In the description of SPY it says:
The Trust is an exchange-traded fund created to provide investors with the opportunity to purchase a security representing a proportionate undivided interest in a portfolio of securities consisting of substantially all of the common stocks, in substantially the same weighting, which comprise the Standard & Poor's 500 Composite Price Index (the S&P Index).
If it was a simple stock of a company, then trading that stock will result in price movement of that stock.
The description above says that SPY is made up of 500 stocks, but it is also itself traded like a single stock. So is the price of SPY something like an average of the constituent stock prices and traders in SPY are purely price takers or does trading SPY affects the price in some way, like it would a single a company stock?
Submitted March 07, 2015 at 05:45PM by keije http://ift.tt/1HesdHI
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