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An Index stock like S&P 500 Spyder, (SPY),
represents a 10 to 1 ratio and therefore should
move
in direct proportion to the S&P 500 index.
1-If no one bought the SPDR would the SPDR still
move in unison with the S&P 500?
2-If there were heavy trading in the SPDR could
the SPDR be out of proportion to
its index and therefore be subject to
arbitrage?
3. Could one be a leading indicator for the other?
The above questions, I imagine, would apply to
all representatvie index stocks.
Dominick
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