Overnight ES and the S&P 500 Index

Discussion in 'Trading' started by short&naked, Feb 21, 2009.

  1. Could sombody please explain how it is possible for the ES to trade after-hours when trading for all of the 500 stocks in the S&P 500 has ceased?

    Also, does the ES determine the value of these stocks or it is the other way around? It doesn't seem possible that one could have two different instruments determine the value of one stock (ie. in this case, the stocks and the ES itself).
  2. ES is a futures contract, so it's more like a bet on where you think the S&P will be in X months' time. As such, it is not the S&P index, and so there's no reason why it cannot trade outside of regular trading hours. All kinds of events happen outside RTH that influence it.
  3. My understanding is that the ES usually moves slowly once the Asian markets open. Then moves in tandem with the FTSE once open and US premarket opens the arbs can come in and either move the ES towards the SP500 or the SP500 towards the ES. Once US markets are fully open it takes a couple of minutes for the prices to come in to line.

    They also have futures on the DOW and NAZ.

    Used to be a lot more predictable but after August nearly always turned into usually. Opening gap used to close nearly always but now usually.May be improving as the volatility is decreasing, ignore OPEX day of course.

    I live in NZ and watch the ES pretty much all day [night time US].

    If you're long/short in stocks you can always us the ES to hedge your position if you can work out a decent delta.

  4. Stosh


    Good explanations. I find it fun to try to predict (in the off hours) what will happen the next day during regular trading. Of course, in the U.S. you lose a lot of sleep doing this and can also lose your ass. Stosh