Gambling on Weekly S&P500 options

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bellagioprince

Hello guys

I am looking to gamble on weekly option for S&P500.

I currently trade with AMP (only trade ES futures) do you guys think it is the best to trade ES options compared with SPY options or SPX?

I am very new to option so any recommendation or opinion will be appreciated it!
 
SPX if you have capital to trade 10x more than SPY option value at a time.
Too many reasons to list, while already discussed here on ET in the past.
 
guru said:
SPX if you have capital to trade 10x more than SPY option value at a time.
Too many reasons to list, while already discussed here on ET in the past.
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Thanks for your input. Is ES option not recommended over spy option if I lack capital?
 
bellagioprince said:
Thanks for your input. Is ES option not recommended over spy option if I lack capital?
More...


You can try ES and it trades during extended hours from 12am, but options on it are much less liquid than SPY and SPX, have less options / smaller options chain, and can be more expensive in the end due to slippage and higher commissions than SPX (though may be better than SPY). It is something you can try in the future after starting with SPY options. I wouldn’t start with ES options.
 
i would only do es if your good at defending using the actual futures. otherwise like others have said spy and spx are less likely to string you out when you need a fill.

amp doesn't have those i think. right they don't so if you trade spy and spx look into just being a stock trader and do oex.
 
Thank you guys I will look into SPX and do more research. Care to share which brokers you guys are using?

I am currently considering IB and lightspeed.
 
bellagioprince said:
I am very new to option so any recommendation or opinion will be appreciated it!
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The SPX options have a large notional value. 100x the Index. Today the SPX is trading at 3643 (+/-) so the notional value is, roughly, $364,000.00. The SPY is one tenth the size of the SP is trading at 364 with a notional value of $36,400.00. One is an index, one is an ETF. Both contracts trade during regular market hours (i.e. 8:30am-3:00pm CT.) The SPX options have some AM expirations so you have to be careful of those.

I trade the /ES options. Vertical credit spreads only. And have been profitable doing so. I do not trade the underlying futures contracts. One thing about options on futures is to remember you are trading a derivative of a derivative. You need to understand the underlying, when the contracts expire, what contracts the options are trading against, settlement procedures, etc. Visit the CME's website for more information. The trading fees are higher than equity options. My broker charges me $0.90 per option per leg. Plus the exchange and NFA fees add up to another $1.10. One advantage to the /ES options is that they (like many other futures options) trade almost 23 hours a day. The /ES option begin their trading day at 6:00PM (ET) until 4:15PM the next day. With a halt from 4:15 to 4:30 and from 5:00PM until 6:00PM (ET.) I can start trading at 6:00PM Sunday evening which sometimes is an advantage when the Asian or European markets are going crazy I can be in the "game" long before the SPX or SPY traders can get in Monday morning. Ditto in the evening after hours.

Since you are "very new" to options you may want to start out with the ETF products like the SPY, or perhaps the IWM, EEM, QQQ, etc. The SPY is the volume leader normally and you can trade dollar wide spreads without putting all that much equity at risk. In any case you need to understand just what exactly you are trading. What is the product, its notional value, when and where it trades, what the exchange's product specifications are, settlement procedures, etc. I would not recommend that you start with the /ES options until you've learned about the underlying futures contracts (i.e. the E-Mini S&P 500 futures) and the options on thso contracts.

just my thoughts.

Best and good trading.
 
guru said:
You can try ES and it trades during extended hours from 12am... I wouldn’t start with ES options.
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Not sure what you're talking about i.e. 12am. There are no "extended hours" for futures options. The E-mini S&P 500 options trade on CME's Globex: Sunday - Friday 6:00 p.m. - 5:00 p.m. Eastern Time (ET) (the next day) with trading halt at 4:15 p.m. - 4:30 p.m and a maintenance break from 5:00 p.m. - 6:00p.m. On expiration day the /ES options cease trading at 4:00 p.m. In other words the /ES options trade about 23 hours a day.

I do agree with your suggestion about not starting learning options trading using the /ES. It's a derivative of a derivative and presents some challenges not normally associated with a stock or ETF options. Not only do the options expire but so does the underlying.

Best
 
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