SPY alternative with cheaper share price?

[kmiklas]

Is there an alternative to the SPY that is cheaper per share?

My betting strat calls for leveraging up when certain price patterns occur (specifically, reverse movement in a derivative Elliott wave). For example, if the price is moving for me, I'd like to leverage up 200/300/500 shares to 1000 total.

The problem is the total cost. Today, the SPY stands at about $226 per share, and so to leverage up to 1000 shares would require USD $226,000. I simply don't have that much money in my account.

I've Googled around, and tried:

1. Leucadia National (LUK). It doesn't quite move like the SPY.
2. Investing into MSFT, as it makes up more than 2% of the SPY, and is 2nd only to AAPL in weighted value. Problem is that it is subect to MSFT-specific forces, and can get a little wild and spikey.
3. The E-spy mini (?). I've seen it mentioned in several books and Web sites, but I haven't figured out how to invest in this.
4. The Q's (QQQ), but this is a little tech-heavy.
5. The DJIA diamonds (DIA), but this is almost as expensive.

Any suggestions?

Thx Keith :^D

 

[FSU]

Your best bet is the SPX emini futures. 1 future equals 500 shares of SPY, and will require margin in the neighborhood of $6,000.

 

[Robert Morse]

Is there an alternative to the SPY that is cheaper per share?

My betting strat calls for leveraging up when certain price patterns occur (specifically, reverse movement in a derivative Elliott wave). For example, if the price is moving for me, I'd like to leverage up 200/300/500 shares to 1000 total.

The problem is the total cost. Today, the SPY stands at about $226 per share, and so to leverage up to 1000 shares would require USD $226,000. I simply don't have that much money in my account.

I've Googled around, and tried:

1. Leucadia National (LUK). It doesn't quite move like the SPY.
2. Investing into MSFT, as it makes up more than 2% of the SPY, and is 2nd only to AAPL in weighted value. It is subect to MSFT-specific forces, and can get a little wild.
3. The E-spy mini (?). I haven't figured out how to invest in this.
4. The Q's (QQQ), but this is a little tech-heavy.
5. The DJIA diamonds (DIA), but this is almost as expensive.

Any suggestions?

Thx Keith :^D

Near term Weekly options on SPY have very tight spreads. You can buy ITM puts or calls to accomplish your leverage.

 

[kmiklas]

Near term Weekly options on SPY have very tight spreads. You can buy ITM puts or calls to accomplish your leverage.

Thanks Robert

 

[JackRab]

I don't understand why people bother trading SPY when the far better/more-liquid/less-transaction-costs ES (futures on S&P500) is available. ES leads SPY anyway so you're already behind the curve trading SPY....

 

[gkishot]

SSO, 2x leverage.

 

[Robert Morse]

don't understand why people bother trading SPY when the far better/more-liquid/less-transaction-costs ES (futures on S&P500) is available. ES leads SPY anyway so you're already behind the curve trading SPY....

Most traders/investors don't have a futures account.

 

[CyJackX]

I don't understand why people bother trading SPY when the far better/more-liquid/less-transaction-costs ES (futures on S&P500) is available. ES leads SPY anyway so you're already behind the curve trading SPY....

1 ES exposure is 500 shares of SPY. I'm practicing with 1 lot of SPY and intend on moving up to ES, but I don't want to get that much exposure until I'm good and ready?
When you say that it leads, I assume that that lead is still fast enough that a human can't take advantage of it.

 

[Daal]

I don't understand why people bother trading SPY when the far better/more-liquid/less-transaction-costs ES (futures on S&P500) is available. ES leads SPY anyway so you're already behind the curve trading SPY....

I prefer SPY over ES, why? SPY has a 1 cent spread, whereas ES trades in .25 ticks. Thats equivalent to 2.5 cents of SPY, overtime that extra spread adds up. Intraday 4-1 leverage is plenty. Plus its a lot easier to scale in and out with SPY given that you can buy/sell as little as 1 share. With ES you are stuck with 1 contract sizes

 

[JackRab]

1 ES exposure is 500 shares of SPY. I'm practicing with 1 lot of SPY and intend on moving up to ES, but I don't want to get that much exposure until I'm good and ready?
When you say that it leads, I assume that that lead is still fast enough that a human can't take advantage of it.

Maybe doable for investing/longer term trading, but pointless for daytrading IMO. What are your transaction costs? A roundtrip for 1 SPY would cost me 0.30% in costs alone... so if you are practicing, I hope you're taking into account that you have to at least cross that threshold? In ES costs are way less.

By leading I mean it's the more liquid market and because liquidity leads an illiquid market, you get better fills etc with ES.

But I get you would want to practice in a more safe way...