Business and Personal Finance Dictionary

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• SPIDERS
  
  Essentially, shares in a trust that owns shares of stock in the same proportion as the S&P 500 stock index portfolio. Spiders are a.k.a. Standard & Poor's Depositary Receipts (SPDRS), and have ticker symbol SPY. The Spider portfolio contains one-tenth of the S&P 500 index portfolio, so it sells for about a dollar amount equal to about one-tenth of the S&P 500 index level. Spiders trade on the American Stock Exchange like ordinary shares, which gives then continuous liquidity while the market is open, the ability to sell short, and ordinary stock transaction costs. Spider's distribute dividends of their underlying stocks quarterly, and do not reinvest them in the meantime, which costs shareholders in rising markets and profits them when the market tumbles. Spiders compete directly with S&P 500 index funds. Investors are stuck in these funds until after each day's market closes. However, transaction costs may be zero. No-load mutual funds often reinvest dividends promptly and without transaction costs.
  
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