One of the most familiar indices on the entire planet is the S&P 500. Investors from around the globe are familiar with the name and its basket of stocks with in it. It is a market barometer for almost every trader, fund manager, or investor. While it is highly likely that you hold at least one of the S&P 500 symbols in your portfolio, sometimes it may be beneficial to have a direct stake in the index itself. If you find this to be the case, what are some ways that you can participate and what should you know?

The easiest way for any type of market participant to play the S&P 500 in the stock market is to use the ETF (SPY  ). Day traders love the liquidity and movement of the ETF, and longer term investors love the ability to participate in dividends, as well as the low expense's associated with the product. For the longer term investors the SPY currently has an expense ratio of 0.15%, which isn't the lowest of the S&P 500 products but it is certainly a fair fee for the level of liquidity they offer.

If you are feeling like you want to venture into the option world then you may want to look at the S&P 500 index directly. Most platforms offer this product under the symbol SPX, or $SPX. This is the index in its most direct calculation. Because its an index and not a ETF there is no ability to purchase shares of this product. You can place option trades on the symbol though and it is quite popular. There are a few things you should know though. #1 - Be careful of the margin requirements if you choose to sell naked options. As a simple calculation, think of the SPX as ten times the size of the SPY, and you can see how big of a product this is. #2 - Since there are no shares available, if you choose to use options just keep in mind that this product expires to cash. What does this mean? Well if you were to buy a call and the SPX goes above your strike price, you cannot exercise it for shares. You can simply take your profit and exit. If you are short puts as an example, if your puts go in the money you would not have the fear of being assigned shares. It would just be a cash loss against your portfolio.

There are other ETF's you can use as well, but be sure you understand the fees associated with those ETF's if you plan to use them for long term investment vehicles.