ES future to ETF

Quote from JimmyJam:

From what I understand, the futures normall trade at a premium to the underlying contract.

I don't know exactly why (the underlying lags in value).
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LMAO!!! Come on JJ for someone of your intellect and stature, that can spot that blowing 1/3 of your account isn't the way forward and can disect exactly why, I really hope you would be able to figure out the the future value of something (which you can trade in a "future contract") is the underlying value (or spot) + interest (between now and the exp of futures contract) - dividend.

F= U + I - D
 
Quote from FGBS:

LMAO!!! Come on JJ for someone of your intellect and stature, that can spot that blowing 1/3 of your account isn't the way forward and can disect exactly why, I really hope you would be able to figure out the the future value of something (which you can trade in a "future contract") is the underlying value (or spot) + interest (between now and the exp of futures contract) - dividend.

F= U + I - D
More...

:) , now comes the stalking.

***

Gnome actually nailed the calculations osho67, I (on the other hand) just pulled the info off of the PDF that I uploaded in the middle of the night to help you figure-out your question, with the hope that others would come along and elucidate further on the subject matter.

It just so happens that your statement "Margin requirement will be a constraint as well because roughly 500 of SPY will require 35000 while 1 contract of ES requires roughly 6000." may be true of your broker, but it isn't true of all (or even most) discount brokers. Overnight margin should exactly equal $3,500 as well. - if this is not the case with your brokerage, you should find one where it is.

Purely aside from your question, as a trader, this is very good information to have at your fingertips.

There are numerous scenarios where risk can be managed more effectively by working exclusively with ETFs if the S&P E-mini represents too much leverage for a given style of trading, incorporated into a portfolio of stocks if that is more your style, or through a combination of offsetting trades between the futes and the ETFs if you like to hedge-your-bets.

Good trading is all about managing risk. :)

Good trading,

Jimmy Jam
 
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