Dow Mini vs. emini S&P - which one???

[Spectra]

Good question. Here are a few reasons why we suggest traders start out by focusing on the Dow E-Mini YM.

1. The Dow Jones Industrial Average (YM) is the most widely watched index of large-cap US stocks followed by the S&P 500 (ES). It is considered to be a bellwether for the US economy.
2. Less slippage. If you get a bad fill on the YM it will only cost you $5/per contract. A bad fill on the ES will cost you $12.50 per contract. This is the equivalent of your broker calling telling you hes charging you an additional $7.50 per market trade.
3. Margin requirements are less on the YM
4. The ES/ER/AB tend to be overly volatile at times. Sudden ramps that pierce through stops are not uncommon. Newer traders can not handle this action.
5. Often times the ES can be used as a leading indicator to foreshadow moves in the YM. We take advantage of this in our trigger system to increase our odds.

If your ready for wild action in a few months then give the ES or ER a try.

 

[steve0617]

If and when you get to some decent quantity of contracts each month, you should seriously look into leasing a seat on the CBOT or CME. If the merger happens, perhaps there will be just the CBOT and the way things work will change, but for now...

For trading ES or NQ, you would need the IOM seat on the CME. Costs about $850 a month now but your commissions on the exchange piece of the whole commission cost will drop by about two thirds. Thus, you'll have to trade a lot to offset the cost of the seat (like at least 2000 contracts a month - but that's only 100 contracts total a day average - nothing if you're trading big eventually). The contract is a fixed cost at the beginning of the lease period. Then it's just MUCH lower commissions.

The Russell 2000 uses the GME seat on the CME. It costs about $250 a month. Same basic exchange commission drop. But since the seat costs so much less, the amount you need to trade to offset is in the low hundreds per month.

The YM contract on the CBOT right now is the best deal. You need the IDEM seat and it costs under $100 a month as of now but it fluctuates each month. For only $100 a month, you need to trade under 300 contracts a month to offset it. And with the CBOT and the IDEM seat, the contract length is several years, but it's cancellable with 30 days written notice and a $100 fee.

Of course, there are also little PITA fees with Globex or other little fees depending on your trading platform. And there's application fees with each exchange, but if you're in this business long term, it makes EXCELLENT financial sense to lease a seat.

And on top of that, once you're trading decent size, brokers will pay VERY nice attention to you, and with a seat, you can get all in commission rates in the $.50 - $.75 a side....

And on top of that #2, it's kinda cool to tell casual people what you do (they sometimes scoff that you're a 'daytrader') but they ALWAYS shut up when I say "Oh, and I have a seat on the Chicago Board of Trade."