Equivalents to SPY

stevegee58 · Jun 30, 2015

Scataphagos said:
Couldn't you could trade odd lot size in SPY?

I was gonna say it's OK to by 2 or 5 or whatever shares of SPY as long as your commission structure is favorable like at IB. You'd be paying a $1 ticket to enter and exit which isn't bad at all.

loyek590 · Jun 30, 2015

another thing to consider is the ES vs YM spread. You can put it on for peanuts. Less than 1k for 1:1. If you are bullish, you buy the es and sell the ym. That gives you a micro long es position, due to the difference in value of the two contracts.

loyek590 · Jun 30, 2015

loyek590 said:
another thing to consider is the ES vs YM spread. You can put it on for peanuts. Less than 1k for 1:1. If you are bullish, you buy the es and sell the ym. That gives you a micro long es position, due to the difference in value of the two contracts.

the other reason I like that spread is it gives you a lot of staying power, no real fear of black swan, just avoid the temptation of always averaging down. Those spreads can stay irrational longer than you can stay solvent. I think one time YM stayed above ES for a whole year. That one hurts. Right on the direction but wrong on the spread.

loyek590 · Jun 30, 2015

so it really doesn't matter to me if you buy puts, sell calls or spread futures, the idea is to take something which may be very volatile, and tame it down to something you are comfortable with. When I am really nervous I am so spread and so protected that no matter which way the market moves nobody but the broker can make money.

I could accomplish the same thing at less cost by just getting flat, but then I wouldn't really know what is going on.

redbaron1981 · Jun 30, 2015

Thanks Loyek thats something worth thinking about.

i960 · Jun 30, 2015

ES requires like 5k of margin at most places. If you can't afford that then you shouldn't be doing this. Be aware that you're controlling over 100k of notional.

hajimow · Jun 30, 2015

jl1575 said:
UPRO (ProShares UltraPro S&P500); Currently at $67.

Don't go with untrapro etfs. You wont be conservative anymore.

redbaron1981 · Jul 1, 2015

i960 said:
ES requires like 5k of margin at most places. If you can't afford that then you shouldn't be doing this. Be aware that you're controlling over 100k of notional.

Thanks for the reply. I have more than enough to start with and the margin requirements on ES are of know concern compared to account size.

What I am trying to figure out is which is the best instrument to use as there are a lot of choices not just futures.

Also if I am to trade my strategy to ES how do I transfer pricing from SPY to ES?

ScalperJoe · Jul 1, 2015

redbaron1981 said:
Leveraged ETF's could be used such as SSO and SDS but I have no experience with these and not to sure how liquid these products are.

SDS has a horrible inverse correlation of the S&P, except if you're day trading ONLY.

SSO is good in a raging bull market, as we've had for many years now. However, that 2x leveraged ETF will lose value very quickly when the market drops.

Trading 500 shares of SPY is equivalent of the move in 1 lot of ES, so as others have said you could just modify the strategy with futures with a lot less capital outlay.

If you have a Fidelity account, then you can trade IVV in lieu of SPY, and pay no commission.

i960 · Jul 1, 2015

redbaron1981 said:
Also if I am to trade my strategy to ES how do I transfer pricing from SPY to ES?

You don't, you only pay attention to ES at that point.