Options: OEX, SPX or SPY?...QQQQ or NDX?...best to daytrade?

Quote from akivak:

Any additional feedback from CBOE?

I’m trying to buy the SPX mar/feb 1125 call spread. The spread bid/ask is 8.6/11.7. I started from the middle (10.15) and raised it by 5 cents every 5 minutes to 10.3, still no fill.

P.S. As I’m typing this, it got filled at 10.3. 15 cents slippage for the whole spread. Maybe I wasn’t patient enough.
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15 cents slippage on the SPX = 1.5 cents on SPY. That seems ok?

I visited the CBOE trading floor yesterday with Jon Najarian (Dr. J) and his partner Andrew Coffey (they are affiliated with optionsMONSTER/tradeMONSTER). Couldn't have been nicer guys.

Anyway, speaking with Jon and others whom he introduced me to on the floor, I was surprised that nobody really had an answer as to which is the better product to trade. The feeling from one particular VIX trader was that it was better to trade the SPY because of the tighter spreads because it'll help you most when you're wrong and want to bail out of a bad trade - despite the higher total commissions.

This got me thinking. Yes, the commission impact is higher on SPY. However, if you are trading on an account with limited funds such that you wouldn't be trading more than say 5 SPX contracts at a time, its better to trade SPY because then you can scale into and out of positions. And you have more options available for repairing your position if needed.

I trade ATM calendar spreads. And my first buy is very rarely the low tick for the week. Instead of buying 1 SPX calendar spread at 10.00, It is more beneficial for me to attempt to buy 10 SPY calenders - one at a time - scaling in stating at 1.00, then .99, .98, .97, etc. over the next 2-3 days. And if the market moves significantly, perhaps I can use some of my remaining bullets on the now current strike that the market has moved too - thereby widening my profit profile.

This of course takes patience, but I think it puts the trader in a better position.

When you get to a point where you're buying 10 SPY contracts at a clip - then you can move up to SPX and employ the same type of scaling to improve your overall cost of entry (and benefit from the inherent commission cost savings).

I wish I learned more magic insider stuff while on the floor, but the real answer is probably that there there is no right answer. Each product caters to a different need (liquidity, size, execution, etc). What's best for whom is in the eye of the beholder.
 
Quote from Sean McLaughlin:

15 cents slippage on the SPX = 1.5 cents on SPY. That seems ok?

I visited the CBOE trading floor yesterday with Jon Najarian (Dr. J) and his partner Andrew Coffey (they are affiliated with optionsMONSTER/tradeMONSTER). Couldn't have been nicer guys.

Anyway, speaking with Jon and others whom he introduced me to on the floor, I was surprised that nobody really had an answer as to which is the better product to trade. The feeling from one particular VIX trader was that it was better to trade the SPY because of the tighter spreads because it'll help you most when you're wrong and want to bail out of a bad trade - despite the higher total commissions.

This got me thinking. Yes, the commission impact is higher on SPY. However, if you are trading on an account with limited funds such that you wouldn't be trading more than say 5 SPX contracts at a time, its better to trade SPY because then you can scale into and out of positions. And you have more options available for repairing your position if needed.

I trade ATM calendar spreads. And my first buy is very rarely the low tick for the week. Instead of buying 1 SPX calendar spread at 10.00, It is more beneficial for me to attempt to buy 10 SPY calenders - one at a time - scaling in stating at 1.00, then .99, .98, .97, etc. over the next 2-3 days. And if the market moves significantly, perhaps I can use some of my remaining bullets on the now current strike that the market has moved too - thereby widening my profit profile.

This of course takes patience, but I think it puts the trader in a better position.

When you get to a point where you're buying 10 SPY contracts at a clip - then you can move up to SPX and employ the same type of scaling to improve your overall cost of entry (and benefit from the inherent commission cost savings).

I wish I learned more magic insider stuff while on the floor, but the real answer is probably that there there is no right answer. Each product caters to a different need (liquidity, size, execution, etc). What's best for whom is in the eye of the beholder.
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A quick update on my SPX trade (Mar/Feb 1125 calendar).

Since I needed to raise some cash and it was an experimental trade anyway, I decided to close it.
SPX was at 1,102. The spread was selling for 8.3/12.0 (the middle at 10.15). I placed a sell order 5 cents below the middle (10.10) and was filled within minutes. The bid/ask did not change from the time the trade was sent till the execution.

The individual prices are even more interesting.
The Mar. 1125 call bid/ask was 18.7/21.1. It was sold at 19.7 (20 cents below the mid)
The Feb. 1125 call bid/ask was 9.1/10.4. It was bought at 9.6 (15 cents below the mid!!!)

The conclusion? Maybe it was not a fast moving market and not a typical trade, but both entry and exit were very fast (less than 2-3 minutes) and the total slippage was $20 on two spreads plus $5 commissions. Executing the same trade on SPY (10 contracts) would cost $28 in commissions at IB (probably around $50 at most another brokers), plus probably at least $10-15 slippage.
 
If you wanted to go long only, which options would you buy QQQQ or SPY options? And why in the world are there two options listed for every strike price on yahoo finance for march 10 options?
 
Quote from clambill:

If you wanted to go long only, which options would you buy QQQQ or SPY options? And why in the world are there two options listed for every strike price on yahoo finance for march 10 options?
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either QQQQ or SPY as they both pretty much mirror each other...as to the yahoo two sets...hmmm...perhaps noting difeffernt exchanges?
 
Quote from clambill:

And why in the world are there two options listed for every strike price on yahoo finance for march 10 options?
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One set expires March 20, the other expires March 31.

If only there were a way to express the expiration date in the option symbol...
 
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