There isn't any significant retail paper in ES options. You're contradicting yourself once again. ES is an autoquoted market, but still superior to SPX for retail. Essentially, you haven't a clue what you're talking about. 9/10 you're trading against an ES broker making a market. The fact that ES is a tighter market has always been the case. There has always been a pseudo-lock in SPX/SP/ES.
Bye-bye reg T
- Thread starter just21
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There isn't any significant retail paper in ES options. You're contradicting yourself once again. ES is an autoquoted market, but still superior to SPX for retail. Essentially, you haven't a clue what you're talking about. 9/10 you're trading against an ES broker making a market. The fact that ES is a tighter market has always been the case. There has always been a pseudo-lock in SPX/SP/ES.
Let me see if I can explain the two points of view. Given two choices of nearly identical assets, but with different clientele that trades that asset, as a retail trader you may choose the asset based on:
1) If you are a skillful retail trader, imo you want to trade assets where there are other retail traders with less skill than yours. Similar idea to sitting at a poker table where there are several players that are below your skill level. If you are this guy, then go ahead and try to trade SPX options.
2) If you are not so skillful, imo you want to go to the asset that is the most forgiving. That is assuming other things being equal. The ES options are far more forgiving than SPX options.
Note that "skillful" means access to the correct theoretical prices, sophistication in the art of hedging, and general trading skill.
Given that, there is no contradiction in what was stated then and what I am stating now. You just have to keep track of all the if statements. Trading SPX options vs ES options is an act of deciding where you stand skillwise vs your competition, and where you are most likely to get a fair fill.
Simply going to the SPX because you see all the volume transacted is a poor decision, because 99% of that volume goes to pit traders. Assuming that, why trade SPX if you have no edge there? The only edge you have there is that unskilled retail traders flock to the SPX as opposed to ES options. Why that should be (that retail traders flock to the SPX opts vs ES opts) is a good marketing trick (remember, all that SPX opt volume is a mirage from a retail trader point of view). There is no logical reason it is so. The second that retail traders take their business to the ES opts, all the volume on the planet that goes to SPX is meaningless to you if you are a retail trader.
What I am saying is, I don't understand why retail traders continue to trade SPX vs ES options, since [by definition ?] retail traders are screen traders. It must be that all of them believe that they sit on the predator food chain, or more likely, they have been duped into believing that some of that large volume comes to them.
nitro
You're delusional, and I have kept track of all the statements. How do you think I recall that thread? It's not open to interpretation. Adding qualifiers such as "skillful" doesn't alter the facts.
I've stated your contradictions. Perhaps you'd still be trading if you were less concerned with being right when proven wrong.
Not at all. As my skill grows my opinion changes. There is no delusion, only pertubative changes of opinion as I gather more knowledge and insight. A year from now I may change my opinon again, but I think I am closer to the truth today then ever...
If I were proven wrong, I would be more than glad to admit it. I just don't see where it is that I am wrong. It is possible, I just don't understand where that is...
nitro
You aren't wrong, it's simply a diametric-change in opinion? ES was shite, now it puts SPX to shame? Ahh, understood. You didn't blow-up, it's simply a short term liquidity hole.
ES was tighter then, and it remains so with a significant lack of retail participation.
Read the thread I linked in its entirety. Bye bye.