James I didn't trade 2020 as I felt it was likely to be random and untradeable from my perspective. I don't recall 2008 having huge up days but I was trading synthetics to the downside, and did well. Wait for 2 up days then go short. Now the mantra is again, BTFD.
SPX options have 0.10 minimum tick size (0.05 for certain spreads). ES FOPs have 0.25 minimum tick size.
Yes. I posted OP to it and the non-upgraded version of chatGPT said: Equity index options (like SPX, NDX, and RUT) and micro futures options (like MES and MNQ) each have their own advantages and appeal to different types of traders for various reasons. While you've listed some of the advantages of futures options, there are benefits to trading regular index options that attract many traders. Here are some key reasons: 1.Settlement and Regulatory Considerations Cash Settlement:Many equity index options settle in cash, which can be more convenient for traders who don't want to deal with the physical delivery of the underlying assets. Regulatory Environment:The options market is regulated by the SEC, which provides a certain level of confidence and protection for traders. Futures markets are regulated by the CFTC, and some traders may prefer the regulatory framework of one over the other. 2.Trading Volume and Liquidity Liquidity:While MES and MNQ options have good liquidity, the traditional index options (like SPX and NDX) often have even higher liquidity. This can result in tighter bid-ask spreads and better execution prices. Volume:Higher trading volumes in these options can make it easier to enter and exit positions without significantly impacting the market price. 3.Variety of Strategies Strategy Flexibility:The broad array of available strikes and expirations in traditional index options allows for more sophisticated and varied trading strategies, including complex spreads, butterflies, and iron condors. Weeklies and Quarterlies:Traditional index options often have a wider range of expiration dates, including weekly and quarterly options, providing more flexibility for different trading strategies. 4.Pricing and Greeks Volatility Products:Many traders use index options to trade volatility, either through direct positions or by using the VIX index, which is based on SPX options. This gives them additional tools and products to hedge or speculate on volatility. Greeks Management:Traders might prefer the characteristics of the Greeks (Delta, Gamma, Theta, Vega) in equity index options compared to futures options, depending on their trading strategies. 5.Accessibility and Broker Support Broker Support:Some brokers may offer better support, tools, and resources for trading traditional index options compared to futures options. This can include educational materials, analytics tools, and customer service. Accessibility:Traditional index options are widely available and well-known, which can make them more accessible for traders, especially those who are newer to the markets. 6.Tax Considerations Tax Treatment:In the U.S., certain index options can qualify for favorable tax treatment under IRS Section 1256, where 60% of gains are treated as long-term capital gains and 40% as short-term. This can be a significant advantage for some traders. Conclusion While micro futures options have their own advantages, such as lower margin requirements, 24/6 trading, and potentially lower commissions, the traditional index options offer benefits in terms of liquidity, strategy flexibility, regulatory environment, and sometimes better brokerage support. Traders choose the product that best fits their trading style, risk tolerance, and objectives. It's important to evaluate both options and consider which features are most beneficial for your specific trading needs and goals.