So interesting thing I learned earlier this year, SPX actually begins trading @ 3:00AM EST. I had an SPX position in my IB account and also one in an Etrade account when I discovered this. I was able to exit the IB position when the market opened. I was not able to exit the Etrade position until the normal opening time. One thing that was odd though, I couldn't see the quotes displayed properly through IB. Might have been a fluke or maybe I need some special data feed to view that. Anyways, I digress. Have a good weekend all!
Yes, the SPX does have Extended Trading Hours (2:00AM-8:15AM CST). BUT, take a look at the folks who offer those hours to the retail trader, the platforms that you can trade ETH products on and the volume of the SPX between 2 and 6 for example. The ES is a far better bet in the wee hours of the morning (IMHO.) For more information see: S&P 500® Index Options http://www.cboe.com/micro/spx/introduction.aspx Extended Trading Hours (ETH) http://www.cboe.com/micro/eth/ Extended Trading Hours (ETH) Participants http://www.cboe.com/framed/pdfframe...tle=Extended+Trading+Hours+(ETH)+Participants ETH Volume Charts http://www.cboe.com/micro/eth/eth-charts.aspx Best
They are quite liquid. They are the only options I trade. I sold short the 226 puts yesterday expiring this Friday for an average price of 1.09 and the final bid/ask on them today was 0.64/0.85 I did not buy to close since i want to be put stock. I did sell short the calls (naked) in the early morning today with the expectation of having SPY in my account saturday. SPY options trading is pretty capital intensive but they are the best instruments to trade period. been doing it for years now. I also had a long SPY position called away early as well which was nice. (today was ex-dividend) The beauty of it all is its like Flying a 787, dialing up your destination and setting up your trip, and the autopilot for the task at hand.
Curious who are the primary traders of SPY options. Is it big institutions and hedge funds? I am a small fish in the scheme of things and fly under the radar but those markets are quite busy and its common to see large positions on the tape all the time. I find it interesting that all you hear on the regular media (ie CNBC etc..) is stuff about buying the hot stock of the week, Cramer and his picks. But never mention of SPY options trading etc.
They may be very liquid but it depends on which options you want to trade. If you are very far in or out of the money they are less liquid. Take a look at the open interest and the spreads to get an idea. I assume you don't want to day trade anything like that, though. It is important to be careful with these things, with flash crashes and such. Don't assume they will "fix" the flash crash. Don't get too big.
It may be difficult to trade $100K if your strategy moves you way out into the DOTM tail. The LEAPS are also thinly traded and hard to move $100K at times for some OTM options.
Yes, big institutions buy, sell and hold the majority of the SPY shares (all 1+ Billion of them.) . From NASDAQ (http://www.nasdaq.com/symbol/spy/institutional-holdings) come this information as of COB yesterday. As you can see JP Morgan Chase, Goldman Sachs, and UBS are the top 3 holders of SPY shares. Best
You should be cautious when interpreting this data. It probably doesn't really mean a whole lot because it's probably almost entirely held for their clients.
SPX is actually better than SPY, saving commission and indeed with similar slippage as SPY. I can't recall when is my last time I trade SPY. LOL