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Are there Pros and Cons to trading SPX options instead of SPY?
- Thread starter Scataphagos
- Start date
Many cons.
1. Some brokers don't offer charts for it.
2. More expensive.
3. Higher spreads
4. Less liquidity
The only advantage I can think of is if your account is very large you can reduce your commission costs by taking more expensive contracts instead of multiply contracts of SPY. But you can effectively reduce commission costs by just adjusting your strike or taking further DTE SPY contracts. So I really see no point of SPX options. Hence, SPY options are much more popular.
1. Some brokers don't offer charts for it.
2. More expensive.
3. Higher spreads
4. Less liquidity
The only advantage I can think of is if your account is very large you can reduce your commission costs by taking more expensive contracts instead of multiply contracts of SPY. But you can effectively reduce commission costs by just adjusting your strike or taking further DTE SPY contracts. So I really see no point of SPX options. Hence, SPY options are much more popular.
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SPX options...welcome to the good life, and right life, of ET 
May the farce be with you, and may you make a million bucks in a year,
May the farce be with you, and may you make a million bucks in a year,
SPX trades most at the time at midprice, less commissions, less margin..
%%SPX options...welcome to the good life, and right life, of ET
May the farce be with you, and may you make a million bucks in a year,
LOL just like a star wars mov ie.
MeanWhile back on planet earth; SPY = liquidity leader, and as mr K noted lower price;
+ No decay on SPY............
SPX:
Contrary to some of the earlier posts, I think both SPX & SPY have TONS of liquidity. No noticeable difference on that front.
- Treated as 1256 contracts, so taxed at 60% long term cap gains rate, 40% short term
- 10x larger, which may be good or bad, but generally lower transaction costs (as you don't trade as many units)
- European option, so only exercisable at expiration
- More expiration cycle
Contrary to some of the earlier posts, I think both SPX & SPY have TONS of liquidity. No noticeable difference on that front.
My bad... I meant to ask about "SPX options vs SPY options"..