So I suppose being that different it would probably ruin using an SPY strategy to the /ES???
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- Thread starter victsavio
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So I suppose being that different it would probably ruin using an SPY strategy to the /ES???
If you have a trading strategy that's working on the SPY, it would probably works also for the ES. Same underlying. Same market driven. A simple backtest would confirm this.
Robert Morse
Sponsor
I do not know what your strategy is. I don't know the size of your account or your ability to learn futures, which are bigger than the ETF so there is less scaling. I don't know where you live or their tax treatment of SPY vs Futures.
I'm only suggesting that you can get the leverage you are asking for with ES futures and it might be a better solution.
I'm only suggesting that you can get the leverage you are asking for with ES futures and it might be a better solution.
offshore is ok , thanks
That’s what I was getting at. Any trading strategy that is applicable to SPY would be applicable to /ES. Sure there are subtle differences. For futures 24hr market, expiration’s, knowing the monthly symbols instead of just knowing the main symbol you’ll have to add the month and year. If one has created a profitable strategy I’m sure they’re capable of learning the differences.
I wouldn’t even consider SPY over ES especially in the US. You’re subject to many more regulations. Pattern day trader, wash sales, worse tax treatment etc. Sure Rob could have pointed out the additional differences. But in the end if you can make it with SPY I’m sure you can with ES. That’s was my intent. Seems though that OP prefers going to other brokers over trading Futures though.
I am a day trader since 90% of my positions are closed in the same day. The other 10% in the following day. I don t know about taxation in US but to me it doesn t make difference. By the way I m not saying that is impossible, but it would be something different I think and I should go indeed through a testing period first ....just not willing
Robert Morse
Sponsor
The IRS subjects SPY to the wash sale rule while ES is a 1256 contract and not subject to wash sales.
https://www.sec.gov/answers/wash.htm
https://www.irs.gov/pub/irs-pdf/f6781.pdf
Mark-to-Market Rules Under these rules, each section 1256 contract held at year end is treated as if it were sold at fair market value (FMV) on the last business day of the tax year. The wash sale rules don’t apply. If your section 1256 contracts produce capital gain or loss, gains or losses on section 1256 contracts open at the end of the year, or terminated during the year, are treated as 60% long term and 40% short term, regardless of how long the contracts were held. The mark-to-market rules don’t apply if you properly and timely identified a section 1256 contract as a hedge.
https://www.sec.gov/answers/wash.htm
https://www.irs.gov/pub/irs-pdf/f6781.pdf
Mark-to-Market Rules Under these rules, each section 1256 contract held at year end is treated as if it were sold at fair market value (FMV) on the last business day of the tax year. The wash sale rules don’t apply. If your section 1256 contracts produce capital gain or loss, gains or losses on section 1256 contracts open at the end of the year, or terminated during the year, are treated as 60% long term and 40% short term, regardless of how long the contracts were held. The mark-to-market rules don’t apply if you properly and timely identified a section 1256 contract as a hedge.
