The SPY Exchange Traded Fund (ETF) tracks one of the most popular stock indices in the world, the S&P500.
Standard and Poor's (S&P) is an American financial services division of McGraw Hill that publishes research and analysis on stocks. They publish a number of indices on stocks from the various global markets. The most well known of these is the S&P 500. This index is a weighted average of 500 of the largest publicly traded companies in the US. This index is often used as a metric to assess the relative health of the US economy.
Information about the S&P 500 Index and the stocks that make up the current list can be obtained at the link Standard and Poor's.
The SPY is an abbreviation of the term 'Standard and Poor's Depository Receipts on the S&P500' or 'SPDR S&P 500' or S&P 500 ETF.
The SPY is designed to track, as closely as possible. the performance of the S&P 500 index. The SPY ETF enables traders to buy and sell shares and trade Options of the ETF so as to give them exposure to the broader market of the 500 stocks that make up the index.