The SPX, or the Standard & Poor’s 500 Index, is a stock index that is comprised of the 500 largest U.S. publicly traded companies by market capitalization, or the stock price multiplied by the number of shares it has outstanding.
The SPY is an exchange-traded fund (ETF) that tracks the performance of the S&P 500. An ETF is a marketable security that acts like an index fund but is tradable like a common stock on a stock exchange.
There are key differences between SPX and SPY options. Let’s look at these differences so investors can decide which option fits their investing strategy best.
SPX options are European-style options and can only be exercised on the expiration date. SPY options are American-style options and can be exercised anytime between the time of purchase and the expiration date.
SPX options do not pay dividends whereas SPY options do. SPY options dividends are paid quarterly, usually at the options expiration in March, June, September, and December.