ES options vs Spy options...

Discussion in 'Options' started by Swan Noir, Sep 15, 2011.

  1. Does anyone see advantages of using one over the other?
     
  2. rmorse

    rmorse ET Sponsor

    ES option receive a tax advantage over Spy.
     
  3. joneog

    joneog

    SPY tighter b/a spreads, ES better tax treatment.

    Also, ES is 5x the size of SPY so depending on the broker you may get lower commissions.

    ES uses SPAN margin and the quarterlies are cash-settlement.
     
  4. dmo

    dmo

    Here are some differences:

    For ES options, it's as easy to short the underlying as to buy it. When you short ES it will never be called away due to a short squeeze or short-selling restrictions, which is not true of SPY.

    Difference in liquidity. Compare bid/ask spreads in the options that interest you.

    Sensible, easily-understandable risk-based SPAN margining in ES vs incomprehensible SEC margin rules in spy.

    Different tax treatment
     
  5. Seems like the edge is clearly to ES. Only advantage I can see to SPY is that you can adjust size more precisely. Thanks ... all.
     

  6. dont forget SPX options
     
  7. rmorse

    rmorse ET Sponsor

    Yes, the tax advantage is available to futures, options on futures, cash indexes and options on cash indexes. These products also have generally wider electronic spreads and are harder to trade. I think only very experienced traders should open futures accounts or trade high priced indexes with wider spreads. SPY is much easier to trade with very narrow spreads that are very liquid.
     
  8. you can also trade es options around the clock (well at least when globex isn't down for maintenance). be careful since liquidity isn't there though.
     
  9. Spxpm from 4th October electronically traded spx. Twice the size of es. Have been comparing spx and es margins in tws and the portfolio margin is more generous than span for this product. Other products span is better, eg compare si and slv.
     
  10. What about liquidity of SPY on last trading day? At what time it becomes difficult / too expensive to close SPY positions?
     
    #10     Sep 16, 2011