Re: Index Stocks

[Norman Phair <ericrogers@xxxxxxxxxxxxx>]

Dominick:

Question 1:  Yes
        2:  Yes, there are always large players looking
to arbitrage any
             situation.  They pay little or no commissions.
		3.  In my opinion unlikely but you would have to back
test to see 			
			if this were true. 

Norman E. 			


Dominica Mattioni wrote:
> 
> 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