SPDR exchange-traded funds, or EFTs, are easy funds for investors to buy, sell and trade but underlying concepts regarding their value can be difficult to understand, as stated by Investopedia, a website that specializes in providing investment information. To purchase SPDR EFTs, an investor simply needs an investment account to dictate how many units he buys or sells.
The value of SPDR EFTs is based on its underlying index, and different EFTs trade at various scales. For example, traditional SPDR EFTs trade at a value approximately 1/10 of the S&P 500's current level. If the S&P 500 is at 2,000, a share of traditional SPDR EFTs trades at $200 (1/10 multiplied by 2,000). Investors should understand how the value of potential EFTs are calculated.
SPDR EFTs are also eligible for more in-depth investment practices, such as short selling, buying options or buying and selling on the futures market.. These methods are intended to protect the investor against market downfalls, but may be too complicated for the average investor to do without a professional adviser.
Investors interested in buying and holding SPDR EFTs for the long-term can do so on their own. Setting up an account involves making sure their computer has the correct technical specifications and that they understand which SPDR EFT they want to purchase,