SPY v ES

is there a difference between trading SPY v ES in terms of difficulties and commissions? I started trading SPY in anticipation of trading ES next year. I mostly add liquidity, so I pay almost nothing in commissions trading SPY. is this also the case for ES(cheaper commish for adding liq?) I find it odd that no one hardly brings up SPY for discussion.

 

It is the same ocean, but you should ask whether you want to live on fish or on sharks?

 

ES gets better treatment for taxes (part of your profits are long-term gains no matter how long you hold). 1 ES contract = 500 SPY shares, so you can compare commissions using that ratio.

Probably just depends on how much commission you're paying and how much you trade whether or not getting the favorable tax treatment will make futures worth it.

Both have pretty huge liquidity, so I don't think it really makes too much of a difference.

ES does trade all night, if that matters to you at all, you can get out of a position almost always, trading is closed 3:15-3:30 and 4:30-5:00 (Chicago time) everyday, and from 3:15 on Friday until 5:00 on Sunday.

 

You mean SWIM with....

Anyway, what is the difference?

 

Susannah is right on. The ES are a leveraged trading vehicle, iow, it takes a whole lot less of your trading capital to make (or lose) a whole lot more.

Maybe a side by side comparison of the 15 minute ES / SPY helps clear things up a bit.

Steve

 

Steve,

What charting program is used in this example you posted? (nice clean charts, IMO)

Thank you,

Paul

 

Hi Paul,

Thanks!

I use Qcharts http://www.qcharts.com/

There are other charting packages out there better than Qcharts I think, but for the $150/month - it already has more than I need.

Steve

 

since I'm a prop, I file for K1, not 1099........ so if I stick with SPY, I pay no social security taxes, but if I wanted to trade ES, I'll have to file for separate 1099? won't it complicate the matter a bit?

and what are the hours for SPY? 7am to 8pm M-F?

 

850 to 870 and 85 to 87 is still percentage wise the same difference. I fail to see the leverage. ES allows to leverage more on margin. SPY has the usually stock/ETF margin req. So yes, with ES you can leverage more but the leverage is not in the issue.

 

mostly add liquidity,

explain that NASD Level II (game) term as respects trading SPY,

and exactly how you do it?

because there in lies the mental difference and approach towards your goal