Question about spread on futures options (ES vs NQ)

[nooby_mcnoob]

First of all, it is so amazing to me that index futures options trade 24/6

I notice that the spread on NQ nearest options is proportionately about 3x that of ES. Am I missing something or is there a specific reason for this (volatility?)

Thanks

 

[def]

ES underlying ~ 3200
NQ underlying ~ 8800

NQ is wider but in percentage terms it is not 3x wider.

 

[nooby_mcnoob]

ES underlying ~ 3200
NQ underlying ~ 8800

NQ is wider but in percentage terms it is not 3x wider.

Thanks. I'm looking at this:

ES: 3230 CALL 84.50 85.00 spread is 0.5 which is about 0.5/85 0.5% of the contract

NQ: 8750 CALL 282.25 286.75 spread is 4.5 which is about 4.5/286.75 1.5% of the contract

Even if you look at the spread as a percentage of the underlying, it's 0.01% (ES) vs 0.05% (NQ).

 

[farmerjohn1324]

First of all, it is so amazing to me that index futures options trade 24/6

I notice that the spread on NQ nearest options is proportionately about 3x that of ES. Am I missing something or is there a specific reason for this (volatility?)

Thanks

What platform do you use to trade options on e-mini futures?

 

[eastern_warrior]

Thanks. I'm looking at this:

ES: 3230 CALL 84.50 85.00 spread is 0.5 which is about 0.5/85 0.5% of the contract

NQ: 8750 CALL 282.25 286.75 spread is 4.5 which is about 4.5/286.75 1.5% of the contract

Even if you look at the spread as a percentage of the underlying, it's 0.01% (ES) vs 0.05% (NQ).

Volatility is another component. Look at the respective VIX's.

 

[nooby_mcnoob]

Volatility is another component. Look at the respective VIX's.

I figured that was it

What platform do you use to trade options on e-mini futures?

IB haven't really traded though

 

[tommcginnis]

A bunch of good responses here -- I'll add current volume, though, as a major cause of bid-ask spread. Look at Friday expiries versus Mon or Wed. Look at ES vs NQ vs Rus or Dow -- as traded volume goes down, bid-ask widens.

So, compare a 3rd Friday ES to any Monday RUT, on a %-of-price basis, and WOW.

 

[nooby_mcnoob]

A bunch of good responses here -- I'll add current volume, though, as a major cause of bid-ask spread. Look at Friday expiries versus Mon or Wed. Look at ES vs NQ vs Rus or Dow -- as traded volume goes down, bid-ask widens.

So, compare a 3rd Friday ES to any Monday RUT, on a %-of-price basis, and WOW.

I think this must be the main one. Not enough volume.

 

[nooby_mcnoob]

Looks like the NQ spread shrinks by about 50% during regular trading hours so @tommcginnis was closest. He gets the prize.

 

[tommcginnis]

Looks like the NQ spread shrinks by about 50% during regular trading hours so @tommcginnis was closest. He gets the prize.