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Fee jump could dampen US trading tactics, volume
- Thread starter seasideheights
- Start date
I don't understand what you are talking about? Are we talking EASE of scaling in and out or if you feel it's too risky vrs SPY?
As a newb, trading SPY vrs trading ES might be the way to go only because you can trade smaller as you gain experience. But all the fees of trading SPY can add up. Plus you have to be more precise in ES trading because of tick increment.
As a newb, trading SPY vrs trading ES might be the way to go only because you can trade smaller as you gain experience. But all the fees of trading SPY can add up. Plus you have to be more precise in ES trading because of tick increment.
Quote from gkishot:
How can you scale in and out if your minimum contract size for ES is about $40,000?
ES trading is inherently more risky (as compared to SPY). But, if one is a good SPY daytrader, then one should work on transitioning to ES. Tax treatment is much more favorable and so are the fees. Especially now with SEC fee increasing 4 fold or whatever it is.
Also, it depends on how you trade too. Daytrading vrs swing trading vrs long term position trading. I'm speaking from a daytrading perspective, flat at the end of everyday.
Also, it depends on how you trade too. Daytrading vrs swing trading vrs long term position trading. I'm speaking from a daytrading perspective, flat at the end of everyday.
Quote from gkishot:
I am talking about both: how can one easily go from $40,000 position down to $30,000 position without increasing the risk?
Quote from jnorty:
I've read about guys who are associate members or members of the cme paying 55 cents rountrip for 2000 contracts a day. Obviously paying the usual $3 r/t for 2000 contracts retail most would go broke. I'm not talking the corp 106 membership but being some type of member. What type of member on the cme would pay 55 cent all in fees and what would it cost a month for the membership?I guess as far as trading the spy versus the es its basically the same. But i just don't trade the spy plus my comfort level in stocks is greater.Also to do futures leverage correctly one needs 300-500k in an account to equate to 10-20k spy's. I don't feel comfortable having that type of money in a non sipc insured futures account.
Memberships are expensive costing about 750k. Leasing a seat would be about 1k/month.
http://www.cmegroup.com/company/membership/
Not sure if you hold overnight or just intraday, but you can find a broker that offers $500 margin. If you are looking to trade 10-20k SPY' worth of ES you'll be safe with 100k in the account or less.
Futures FCM's are require to keep customer funds segregated. To my knowlegde no traders has ever lost their deposits.
let's quickly look at a few benifits:
1. lower transactions costs
2. save about 100k yr in SEC fees
3. futures are taxed at a lower rate. 60% long-term and 40% short term. So if you make 100k/yr trading SPY's, you would save about $12,500/yr in taxes.
Just open a small account with 5k and see if you like it.
Quote from R. Raskolnikov:
ES trading is inherently more risky (as compared to SPY).
ES trading does not have to be inherently more risky. The risk only derives from leverage. But that's the trader himself who sets the leverage relative to his trading capital so he is in full charge of the risk. Nobody forces his hand to use the leverage in case of ES contracts. That's why in case of a loss the trader might want to scale back his position to decrease the leverage and consequently the risk.
It IS inherently more risky because the minimum trade size is 1 lot of ES and that equals 500 shares of the SPY. So you HAVE to assume more risk because of the conversion. You can't trade 1/5 one lot but you can trade 100 shares of SPY.
Yes, leverage is great in the ES but like I said a good trader knows this and trades appropriately. You cannot say that cost structure is more advantageous in the SPY vrs the ES because it is not.
Yes, leverage is great in the ES but like I said a good trader knows this and trades appropriately. You cannot say that cost structure is more advantageous in the SPY vrs the ES because it is not.
Quote from gkishot:
ES are not inherently more risky. The risk only derives from leverage. But that's the trader himself who sets the leverage relative to his trading capital so he is in full charge of the risk. Nobody forces his hand to use the leverage in case of ES. That's why in case of a loss the trader might want to scale back his position to decrease the leverage and consequently the risk.
Unsure from the thread if you are talking about HR1068, which will effect all of us. The 1/4% tax on all $$$ transactions will limit trading, lower the thin margins we presently have.
I trade easily $100K per day, expecting 2-6% based on 3x ETF's, $100K trading which is fairly easy , especially without T+3, means $250 tax from my trading for win or loss.
I trade easily $100K per day, expecting 2-6% based on 3x ETF's, $100K trading which is fairly easy , especially without T+3, means $250 tax from my trading for win or loss.
They are talking about SEC fees being raised not transaction tax.
Quote from Mark2m:
Unsure from the thread if you are talking about HR1068, which will effect all of us. The 1/4% tax on all $$$ transactions will limit trading, lower the thin margins we presently have.
I trade easily $100K per day, expecting 2-6% based on 3x ETF's, $100K trading which is fairly easy , especially without T+3, means $250 tax from my trading for win or loss.
Quote from R. Raskolnikov:
Yes, leverage is great in the ES but like I said a good trader knows this and trades appropriately.
Can you give some example so I would understand better what the appropriate trading means.
You cannot say that cost structure is more advantageous in the SPY vrs the ES because it is not.
Yes, it is because one can't fix the risk ( leverage) with futures according to his losses. Because of the futures contractual structure.