US500: S&P 500

The S&P 500 is the benchmark most professional investors in United States shares are measured against. It holds about five hundred large companies weighted by the market value of the shares available to the public, so the biggest companies move it most. A very large amount of money is invested in funds that copy it, which makes joining or leaving the index an event in itself.

General education about the underlying market. It states no current price or rate, makes no forecast and is not advice. What GIO4X offers on this instrument is in the trading conditions on this page, not here.

The index itself

The index is a number calculated from its members’ prices during New York trading hours. It cannot be bought or sold, pays nothing and costs nothing.

A fund that tracks it

A tracking fund owns the shares in index proportions. The holder owns units of the fund, receives the dividends, less the fund’s charge, and has no financing cost and no expiry. Funds, their charges and tracking difference are explained on the investing pages.

A futures contract on it

The futures on this index are among the most heavily traded contracts in the world and trade for most of the day and night, which is why a price for “the S&P” exists when the New York exchanges are shut. Each contract expires quarterly and settles in cash. Its price already allows for financing and for the dividends expected before expiry.

A CFD on it

A CFD pays or charges the change in a price set by the provider, usually taken from the futures or the index. There is no ownership of shares, no vote and no fund unit, and the holder depends on the provider to pay. Dividend adjustments, financing and any expiry are the provider’s terms, not features of the index.

Additions and deletions

Changes of membership are made when needed, most often because a member has been taken over or no longer fits, and are announced in advance. Tracking funds trade at the close before the change takes effect. A well-known example is a large electric-vehicle maker added in December 2020, whose size made the addition unusually large.

Quarterly rebalancing

Share counts and float factors are updated each quarter, taking effect after the close on the third Friday of March, June, September and December. The same Fridays are futures and options expiry days, so trading volume at the close is typically far above normal.

Dividends

The headline index is a price index. When a member’s shares begin trading without the right to a dividend, the index is lower by that company’s dividend multiplied by its weight. Because members pay on different days, the effect is spread through the year in small amounts; total-return versions that reinvest dividends are published separately.

Futures expiry and rollover

The quarterly futures settle against a special opening quotation, built from the opening price of each member on the morning of the third Friday. Most positions are moved to the next contract in the week before. The gap between the two contracts reflects financing and expected dividends, and closes as expiry approaches.

These describe how such events work in general. How GIO4X treats them on its own contract (adjustments, rollover dates, suspensions) is a trading condition and is not yet published.