Stock Trading: The First ETF
The SPY ETF is the largest ETF in the world as of 2007. Its current sponsor is PDR services LLC, which is itself part of the American Stock Exchange LLC. It does have some stiff competition with stock picks, however. The New York Stock exchange provides a list of the best performing stock trading ETFs, including IVV, SSO, RSW, SH and RSU.
An exchange-traded fund (ETF) is an innovative way of trading on the stock exchange. The value of one of these funds is set at the value of the assets that it represents. This would effectively be the value over the entire trading day. The 680 ETFs currently account for $610 billion on the US markets.
Their popularity is based on the easy diversification that they facilitate across the entire index. In addition, ETFs are usually much cheaper to manage than most other trading options. They are also much more tax efficient than shares and stocks. As they can be bought at any time during the day they are also more flexible. Unlike other options, there is much more market transparency to ETFs.
State Street Global Advisors, the Boston asset manager, launched SPDRs in January 1993. They were formulated by Nathan Moss, who worked on the American Stock exchange. In May 1995, MidCap SPDRs were introduced to the market. They can be found on the New York Stock Exchange, listed as “SPY” and “MDY”.
They were conceived in the late 1980s, and had their origins in Index Participation Shares (IDSs). These were briefly traded on a variety of stock exchanges. The Chicago Mercantile Exchange then served a lawsuit that stopped sales of IDSs.
Later that year the Toronto Stock Exchange began to trade in IDSs. The American Stock exchange looked for anything similar that could pass regulations. The ETF was the result. The very first ETF in the United States was the SPDR (Standard & Poor’s Depositary Receipts). SPDRs are often known as “spyders” or “spiders”.
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