If you're consistent on SPY, does that mean

Discussion in 'Index Futures' started by Kovacs, Sep 23, 2007.

  1. Kovacs


    you'll be consistent on ES?
  2. tyler19


  3. I would think the spread difference might make the es tougher, although I never traded the ES.

    Any thoughts?
  4. It depends on your trading style, if it is based on scalping you may not get the same fills on ES due to the rapid movements. Futures lead cash so l next time you get a signal, see how far off ES is from the cash price. You can also set up a sim account and demo to see what the result is with your scenario.
  5. It's about the same, however I think the spread difference actually makes the SPY more difficult (psychology changes when going after that extra penny). Personally, I'd trade the ES over the SPY any day, however if you have trouble trading with the leverage of the ES, then the SPY will of course be your best area for the time being. (especially if you're just starting out).

    Moreover, the trading platforms set up for trading the ES are10x better than anything i've seen for the cash market. Systems such as "brackets" set up in futures trading programs make it much easier and quicker to trade for the user.
  6. Kovacs


    The spread shouldn't be that much of an issue.

    On SPY, it's a penny. On ES, it's a tick.

    I usually trade 1000-2000 shares of SPY at a time, so if I hit the bid or lift the offer, I'm out of the money roughly the same amount as one or two ES contracts.

    ES is attractive for the ability to scale up. With only ten contracts, I can make $125/tick, or $1000 every two handles. I can keep scaling up to 50 contracts without too much of a hitch.

    On SPY, I would need to get filled for 12,500 shares to get the same amount, which is not always easy to do.

    Forget about getting 50,000 shares. If a trade that size goes against me on the SPY, I'm going down hard.

    SPY is great for learning and if you want to trade less than a few thousand shares. For more than that, the ES seems to be less risky.
  7. Kovacs


    My style is somewhat like scalping.

    I take partial profits when I'm 25 cents in the money, then the rest at an exit signal (volume spike, tick extreme, s/r, divergence, etc).