Although you will ordinarily buy or sell shares of Select Sector SPDRs in the secondary market by trading on the American Stock Exchange, the Fund shares that you trade are generally "created" by market makers, large investors and institutions.
Each Select Sector SPDR issues and redeems shares only in block-size "Creation Units" of 50,000 shares (or multiples of 50,000 shares). Creating 50,000 shares of any Select Sector SPDR requires the deposit into the Trust of a portfolio of stocks closely approximating the composition of the underlying Select Sector Index of a particular Fund (Deposit Securities) combined with a specified amount of cash (Cash Component).
Similarly, a block of 50,000 shares of a Select Sector SPDR (or multiples of 50,000 shares) can be redeemed, principally in kind for a portfolio of stocks held by the Fund and a specified amount of cash. Except when aggregated in Creation Units, shares are not redeemable securities of the Select Sector SPDRs.
Creation and redemption transactions require interface with a firm which is either a member of the Continuous Net Settlement System of the National Securities Clearing Corporation or a Depository Trust Company participant, and compliance with other procedures described in the Trust’s prospectus and Statement of Additional Information.