The aim of the SPDR S&P 500 exchange-traded fund (ETF) is to provide an investment vehicle that at least roughly produces returns in line with the S&P 500 Index before expenses. The fund, known as “SPY” for its trading symbol on the NYSE Arca exchange, was the first ETF listed in the U.S. in January 1993 when introduced by State Street Global Advisors.SPDR stands for Standard & Poor’s Depositary Receipts.

The Key Features of SPY

SPY is consistently one of the highest-volume trading vehicles on U.S. exchanges. Average volume is typically over 80 million shares, although that does fluctuate over time. For many day traders, it’s the only ETF/stock they trade. Many investors and hedge funds use SPY because it represents the S&P 500 index—a basket of 500 major U.S. companies.

The S&P 500 index itself is composed of U.S. companies across all Global Industry Classification Standard (GICS) sectors with an unadjusted market capitalization of $8 billion or greater. In other words, the index is only composed of big companies. Each company in the index must also have positive earnings in the most recent quarter, as well as over the most recent four quarters.

SPY is consistently one of the highest-volume trading vehicles on U.S. exchanges. Average volume is typically over 80 million shares, although that does fluctuate over time. For many day traders, it’s the only ETF/stock they trade. Many investors and hedge funds use SPY because it represents the S&P 500 index—a basket of 500 major U.S. companies.

The S&P 500 index itself is composed of U.S. companies across all Global Industry Classification Standard (GICS) sectors with an unadjusted market capitalization of $8 billion or greater. In other words, the index is only composed of big companies. Each company in the index must also have positive earnings in the most recent quarter, as well as over the most recent four quarters.