They are not very liquid, However, it may be a way to get around the 25k reg T requirement? One reason I am considering it is that one can choose a smaller bite on a small stock that index futures. For example, trading SPY futures is a smaller bite than trading ES, and still not be limited by the 25k requirement of trading SPY itself? My purpose is to get around the 25k day-trading limitation. I don't care for leverage, I just want to get my feet wet. Please if you have traded them, what are the pros and cons. Thanks.
lack of interest from traders. traders have limited capital unlike market makers who have unlimited capital
Thanks. There is no daytrading rule for ES, YM, NQ, etc but there is 25k requirement for SPY futures - which is only 1/5 of ES ?
If you want to trade the index, than why not just trade ES, you just need $ 500 margin if you plan to hold the trade just for the day. You could fund your account with just $ 2,500 - $ 5,000, and trade until you get good enough to add more money to the account. The benefit also of trading futures is less surprises especially if you keep aware of major reports like employment. What I don't like about trading stocks, is that you can get a headline like company gets raided by the Feds for tax fraud. If you are long, the stock is going to gap down below your stop and there is nothing you can do about it. Say you are short, headline comes out, phase III results in, 80% positive on test subjects, stock gaps up, stops are meaningless.
I am on simulator for futures. I would prefer a lower risk trading instrument while I get more precise with futures.