SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: MrGreenJeans who wrote (8524)10/23/1998 10:06:00 PM
From: Jim S  Read Replies (1) of 42834
 
Mr GJ:

Good explanation of the front half of the SPY split question. The back half rounds out why SPY can't split:

S&P Depository Receipts (SPDRs) are a derivative instrument. As an example, suppose you short a stock; the shares you short don't actually change hands, and the person you borrow the shares from never even knows that you borrowed the shares to sell. It is an exercise in book keeping and computer transfers. Similarly, the SPDRs are "IOUs" on deposit in an account somewhere, not the actual shares themselves.

So, for SPY to split, it would require a doubling of the IOUs (at half the price) of nonexistent S&P shares in a nonexistent depository account. Furthermore, all of the S&P 500 issues would have to make a simultainious split.

Kinda boggles my mind to think about it too much. Ever notice how the simple questions always turn out to be the hardest to explain?

jim
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News