ES options vs Spy options...

When there is a lot of volatility ( market goes down and it goes down fast ) some Es options lack a bid and and ask. You can still make a market, but you will get royally screwed if you still have to get out from your position.

There were good answers above.

If you are willing to take a bit more risk the return you make with ES options will dwarf SPY options return, but you have to be on top of your game.

ES options are as hot as fire. They can and will destroy your account soon if you don't understand well how to use leverage/margin.

I started placing option spreads on ES options after 5 years of trading and I still had to go trough some pretty humbling experiences ( lost almost the entire year gains ). It would have been a smaller loss with SPY options so be very careful.

You can start with a 15% margin on your account and move up your margin as you get better just don't be in a hurry.

It is definitely worth to experiment and try both. To better understand the difference you can place the same position using both on a simulated account.

Good Luck.
 
just to add. always check the skews and always enter the price at the mid or better especially as you go further out of the money and in further out months because the way you place your order could put you in a hole to begin with. that goes for all option prices especially in es options which can have really wide bid ask spreads.
 
Thanks for all the caveats guys. I've been trading futures for years and using equity options at times but, as many have stated, spreads in futures options can be wide and unless your limit orders are spot on and you are quick to adjust as the underlying moves -- almost always ES for me -- you are the one that is picked off and starting with a loss.

Thanks for all the thoughtful comments!
 
When there is a lot of volatility ( market goes down and it goes down fast ) some Es options lack a bid and and ask. You can still make a market, but you will get royally screwed if you still have to get out from your position.
More...
.
Also consider that b/a gets much wider and liquidity is less when the market moves away from your strike when trading ES options. There is seems to be much more interest in SPY options that have strikes far away from the market.
 
You must log in or register to reply here.
Back
Top