Size, Low Cost And Liquidity Make SPDR S&P 500 ETF Trust (NYSEARCA:SPY) Perfect Option For Investors


SPDR S&P 500 ETF Trust (NYSEARCA:SPY) was a relative mover during Friday’s ending shortened trading session on the back of the Thanksgiving Holiday higher by 0.11%. The ETF has been in a strong uptrend over the last couple of months ever since forming a double bottom at levels of $186.71. The ETF currently trades above all important daily moving averages. The momentum oscillators for the ETF are on the verge of giving a buy signal indicative of the bullish momentum. Traders believe only a breach above levels of $211.95 would be indicative of a start of the next leg of the current rally.


SPDR S&P 500 ETF Trust (NYSEARCA:SPY) has been ruling the world since 1993. As per the reports, its size, low cost of ownership and liquidity are among those features that make it a perfect option for investors.


There are many ETFs that investors can look forward to investing in, but none of them can beat the liquidity of SPY. With an average trading volume of $23 billion, it’s undoubtedly the most liquid ETF available in the market. There is a huge difference between SPY and AAPL ETF that lies at the second rank. When it comes to liquidity comparison of past three months, the daily volume of SPY has been a lot higher than the collective holdings of the top 18 S&P 500 funds.

Low Cost of Ownership

Another feature of SPY ETF that gives it an edge over others is the low cost of ownership. Its average bid/ask spread isn’t more than a penny or $0.01. If taken into consideration last 12 months, the bid/ask spread of SPY has been one of the lowest and within a tight range in the market. Its average premium/discount was one of the lowest in the industry over the past 12 months. A combination of its bid/ask spreads, low expense ratio, index tracking and premium/discount keep the overall cost of ownership very low.


The third and the most important feature is size. At present, SPY ETF is held by at least 1600 institutions. This number is a sign of faith that institutional investors have in SPY. It’s the most preferred S&P 500 ETF for institutions with 76.5% of shares are held by institutional investors; most for any ETF in the industry. Its options market is massive with national options open interest touching a whopping $413.5 billion level.

With over 20 years of S&P exposure and seamless record combined with 100% faith of millions of customers, this is surely the best ETF that investors can find in the market.

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