What does the term “spider” mean when it refers to the stock market?
The term “spider” is actually just a convenient pronunciation of the acronym SPDR, which stands for “Standard & Poor’s Depositary Receipts.” All we really knew about this type of investment instrument was that it’s designed to mirror the price of the S&P 500, much like an index mutual fund. Beyond that, we looked to some of big name financial commentary sites to get the details Our first stop was The Motley Fool, home base of some of the nineties hottest investing pundits. By entering the term “SPDR” into their site’s search box, we were led straight to a very informative discussion of spiders. It seems that the main benefit of SPDRs is that they can be traded throughout the day, much like stocks, whereas mutual funds only trade at the close of business. They also benefit from low expense ratios and different treatment of capital gains. However, like stocks, purchasing SPDRs will cost you a brok
