S&P 500 Index
From MarketsWiki
The S&P 500, considered to be the world's leading benchmark for institutional investors, is an index owned and maintained by Standard & Poor's Corp. It is composed of 500 publicly held, predominantly U.S. corporations, all of which are considered "large caps." All stocks in the S&P 500 index are traded on the New York Stock Exchange and NASDAQ.
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Overview
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The Standard & Poor's 500 Index is capitalization weighted, e.g., component companies weighted according to the total market value of their outstanding shares. The impact of a component's price change is proportional to the issue's total market value, which is the share price times the number of shares outstanding. These are summed for all 500 stocks and divided by a predetermined base value. The base value for the S&P 500 Index is adjusted to reflect changes in capitalization resulting from mergers, acquisitions, stock rights, substitutions, etc.
In short, S&P 500 Index components exhibit the following characteristics[1]:
- Market Coverage – Approximately 75% of the U.S. equities market
- Weighting – Market capitalization
- Market Capitalization – Minimum of US$ 5 billion
- Public Float – At least 50%
- Reconstitution – On an as-needed basis
History
The history of the S&P 500 dates back to 1923, with an expansion to include 500 companies in 1957.[2]
Multiple Products
Index traders and institutions have varied product offerings related to the S&P 500 index -- futures and futures options, equity index options and exchange-traded funds.
CBOE Options on S&P 500 Index (SPX) Overview
In the security options world, the Chicago Board Options Exchange is the sole options exchange licensee for the S&P 500. It is the most actively traded index at the exchange.)[3]
| Multiplier | $100 |
| Premium Quote | Stated in decimals. One point equals $100. Minimum tick for options trading below 3.00 is 0.05 ($5.00) and for all other series, 0.10 ($10.00). |
| Strike Prices | In-, at- and out-of-the-money strike prices are initially listed. New series are generally added when the underlying trades through the highest or lowest strike price available. |
| Strike Price Intervals | Five points. 25-point intervals for far months. |
| Expiration Months | Three near-term months followed by three additional months from the March quarterly cycle (March, June, September and December). |
| Exercise Style | European - SPX options generally may be exercised only on the last business day before expiration. |
| Trading Hours | 8:30 a.m. - 3:15 p.m. Central Time (Chicago time) |
CME Group S&P 500 Contract Overview
In futures, CME introduced trading in S&P 500 futures in 1982, a few years later adding options on the index. In 1997, CME launched trading in the E-mini S&P 500 futures contract which, due to its broad appeal and electronic focus, now trades more than the larger sized S&P 500 futures contract.[4]
| Trade Unit | $250 times the Standard & Poor's 500 Stock Price Index |
| Point Descriptions | 1 point = .01 index points = $2.50 |
| Contract Listing | 8 months in the March quarterly cycle. Mar, Jun, Sep, Dec. |
| Ticker | SP |
| Floor Trading Hours | 8:30 a.m.-3:15 p.m. Month end(3:15 p.m.) LTD(3:15 p.m.) |
| Minimum Fluctuation, Floor Trading | 0.10=$25.00 |
| Globex Hours | Mon/Thurs 5:00 p.m.-8:15 a.m. & 3:30 p.m.-4:30 p.m.; Shutdown period from 4:30 p.m. to 5:00 p.m. nightly; Sun & Hol 5:00 p.m.-8:15 a.m. |
| Minimum Fluctuation, Globex | 0.10=$25.00 |
See Also
Standard & Poor's Corp. for other indices.
References
- ↑ "S&P 500”. Standard & Poor's. Retrieved on November 21, 2007.
- ↑ "S&P 500 Factsheet”. Standard & Poor's. Retrieved on November 21, 2007.
- ↑ "CBOE contract specs". Chicago Board Options Exchange. Retrieved on November 7, 2007.
- ↑ "CME contract specs". CME Group. Retrieved on November 8, 2007.
