If your 1000 shares round trip cost is $5, then per side is $2.5/1000 shares. Where to get this low rate?
I think SPY tick is 1 cent. The spread for 1000 shares is $10, how did you get SPY spread costs $ 5? Did I miss something?
Feel free to correct me if I'm wrong but I think the only advantage of trading SPY over ES is when you are recently starting in cash and require less risk/leverage. Aside from that, can't think of any other reason to do SPY over ES. NN
It's typically about 4.80 round turn at the best rates but then again, I'm not a big scalper so it doesn't bother me - the other advantages have me using the ES though I do sometimes use the SPY to scale in more slowly/conservatively in the IRA's.
In my experience, the fills are better/faster in ES (less slippage), and if you trade enough even IB rates are 3.60 for ES so the tax/commish even out. Everything being equal ES is a better instrument IMO. If you pay NO taxes, then it may be better to trade SPY, but you may lose enough on slippage to make it worth trading ES. ES fills rarely take more than 1/2 second, SPY gets busy you can miss fills easily.
<i>"and if I look at the spread costs (buying on the Ask and immedialty selling on the Bid)"</i> In the real world, nobody does that. In the real world, short ES 1400.00 and trailed out 1396.00 for +4pts would be the exact-same trades as... short ES 1399.75 and trailed out 1395.75 for +4pts would be the exact-same trades as... short ES 1398.50 and trailed out 1394.50 for +4pts when the... ... ES tops out at 1402.00 and drops to 1391.00 before reversing back up to 1397.00 ** The bid/ask spread means nothing, because no one ever "captures" the spread. Unless every single price swing with zero exceptions was entered on the extreme high and low tick, there is no relevance to the spread.
what have you been smoking? of course there is relevance to the spread. a retailer who always enters at market and sells at market, will save money on a tighter spread.
Of course the spread matters, your cost to trade at market is the commission AND the spread. The misinformation posted on this board by "experts" .. Stick with the ES, you will have more slippage with the SPY
<i>"what have you been smoking? of course there is relevance to the spread. a retailer who always enters at market and sells at market, will save money on a tighter spread."</i> It's been awhile, but apparently what I smoked wasn't nearly strong as yours. Explain mathematically how exactly you "pay" the spread? A retailer who enters at market and exits for anything less than the exact, specific, extreme tick DID NOT pay the spread. The spread was absorbed thru price movement outside of the round-trip trade. If you buy at ES 1400.00 or 1399.75 or 1398.50 and exit for +4pts profit at a targeted exit, trailed stop or any other reason, what did you accomplish? You captured a +4pt trade. Congratulations, job well done... and the distance of spread meant absolutely nothing. It could have been $12.50 wide, $25.00 wide or $100.00 wide. What do you care? You picked off $200 from inside the swing regardless of all else. A retailer who buys & sells at the market does not save squat... if they are doing anything other than trying to scalp for ticks, which is a just loser's fallacy game in eminis to begin with. Enjoy your skunk, we've been dry over here for decades now
<i>"The misinformation posted on this board by "experts"..."</i> Which certainly leaves you out, in your present ET carnation and past.