ES vs Spider fees structure

Discussion in 'Index Futures' started by e-miNY, Sep 4, 2006.

  1. e-miNY


    Is ES cheaper to take a position than SPY? Because there is no management fees for ES. Does the logic work the same for long & shorts that it is cheaper to take a postion in the ES?
  2. You don't explicitly pay management fees for trading SPY. It's already priced in to the ETF.
  3. Retail margin for 1 ES contract is less than 100 shares of SPY and you get better leverage using the futures (a good and bad thing ).

  4. e-miNY


    Although is priced in. But in reality u still have to pay for it. So, the question is, does the 0.99% or whatever that percentage is make SPY more expensive to take a position than ES?

    Is like the USO situation. On some days, crude can be up a dollar but the ETF could be down a dollar because of the fee structure.
  5. e-miNY


    Let's forget leverage here. The futures have already priced in the extra interest you earned from the extra leverage.

    Holding everything else constant. Everything is the same for ES and SPY except the management fee, correct? Divedend, Interest from leverage etc are all priced in.
  6. ES is the S&P futures, SPY attempts to track the S&P cash index and is off slightly due to fees and trading and dividends.

    Honeslty they are apples and oranges in many ways. If you are daytrading, use ES. If you want to open long-term positions, perhaps you could look at SPY.

  7. Uh, you sure you got that logic straight? That be some mighty powerful fee.
  8. e-miNY


    Here u go:
    Investors considering purchasing the oil ETF should tread lightly, warns Bianco Research in a Monday note. The research group points out that, according to the fund's prospectus, the average daily change in the ETF's net asset value for any period of 30 straight valuation days comes within 10%, plus or minus, of the average daily change in the benchmark oil futures contract over the same period. "A 10% tracking error? Try that in the equity index ETF world," writes the research group. The divergence is already in play Monday: While oil prices were up more than a buck, the USO ETF shed nearly 1% to $67.76.

    With the contango thing, u are losing about 12-15 bucks a year(around 1.20 spread per month) before u make a dime.
    U are dead right, that's some fees for the ETF.
    That's why i am saying no matter day trading or position trading, ES is the way to go.
  9. Let us also remember the tax advantages of ES over SPY.
  10. e-miNY


    Oh, i am from HK. So no tax either way.
    #10     Sep 10, 2006