The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to answer the question, “How is SPX calculated?” SPX is the ticker symbol that basically tracks the S&P 500 index. That ticker symbol is calculated using the S&P 500 index as the base. The S&P 500 index is a floating adjusted market cap weighted index. What does that really mean? It just means that it continuously adjusts and it also means that it’s market capped, so it’s based on the capitalization of the individual components that make up the S&P 500. This means that companies like Microsoft, Apple, Amazon, Facebook, etcetera which have higher capitalization than the rest of the components have higher weightings. Microsoft for example I think as of right now has a weighting of 4.32. Apple has a weighting of 4.06. Amazon has a weighting of 2.93. Because they’re higher valued companies based on market capitalization, they therefore get a higher weighting index. That’s probably the flo