Glossary of Option Terms: S &P 500
S&P 500
Definition: Standard & Poor’s 500 Index. The 500 companies included in this index are selected by the S&P Index Committee, a few of the mitigating factors are market size, industry representation and liquidity. This index is designed to be an overall indication of the United States stock market.
To many people it is the "definition" of the stock market, as each stock’s weight in the index is proportionate to it’s actual market value. Since it’s tough to buy the index (you would have to buy 500 different stocks) it’s a bit easier to buy index funds, ETF’s or derivatives based on this index.
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