IMO the best options to trade are options based on index ETFs, like QQQQ, SPY, DIA; because of their liquidity, lower spreads, and more affordable prices.
i would agree, however they are slightly different underlying. i do like the etf's because they are on the penny pilot program. i'm not a big fan of the 5 cent wide markets.
what are the fees on etf's and dia?I have played oex index options and you just pay your commission....I hear there's exchange fees or something with etf's and dia???Can someone explain...I might start playing dia since i follow/trade the dow30 so exclusively...
No as far as I know if you want to buy a spy call, you pay your broker commissions, that's it. spy and qqqq are very liquid and pretty deep size wize. Iwm options as well. http://biz.yahoo.com/opt/stat1.html
Here is a link to etf's by shares traded, options volume usually follow suit. http://finance.yahoo.com/etf/browser/tv?f=0&c=0
The only extra fees are on sales, which amount to $30 per $1mil. So if you sell 1 call at 2.6 then that's $260*30/1,000,000=$0.01.
No, there's no dividend (well, there's is you hold all 500 stocks of the SPX), however the dividend yield is incorporated in option pricing.