UK Accounting Glossary
An S&P 500 Mini is a derivative contract created for investors with limited capital. The S&P 500 Mini instrument allows investors to buy a fractional share of a conventional S&P option or futures contract, rather than a whole contract. Exchanges created the S&P 500 Mini because as the S&P 500 more than tripled from 1986 to 2007, contract values increased to in excess of $100,000. Small individual investors had been priced out of the derivatives market and were unable to participate until the S&P 500 Mini made it accessible again. The small investor could pursue the same speculation and hedging strategies as large institutional investors using an S&P 500 Mini. Otherwise, an S&P 500 Mini is the same as a standard S&P 500 contract. Investors trade S&P 500 Mini options or futures on the same exchange, S&P 500 Mini contract is cash-settled, and the S&P 500 Mini follows the same expiration schedule.
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This glossary post was last updated: 5th February 2020.