If the fees and amount of money needed to trade each product were the same, which would you rather trade and why?
SPY or ES
- Thread starter baller1069
- Start date
Depends on the strategy.
For example, if my primary method was Japanese Candlestick patterns...
SPY would be my preference instead of ES.
Another example, if the overnight market data is important on particular trading days...
ES would be my preference instead of SPY.
Mark
* In reference to Japanese Candlesticks...
Day trading.
ES is too efficient in comparison to SPY for day traders that mainly get their pattern signals from Japanese Candlesticks.
However, if I was stuck on trading ES and Japanese Candlesticks is my main game...
I would get my pattern signals from SPY and take the trades in ES.
* In reference to key price action in the overnight data...
Swing trading and position trading.
Mark
if you are scalping, ES is far superior (but YM is superior to both)
ES has MUCH better liquidity and much better fills than spy, especially considering SPY does not have "perfect" short/long fills whereas futures do (futures were designed as a zero sum market for hedging after all)
i spent 6 months honing my strategy for YM by using DIA. the difference is very clear between YM and DIA and ES and SPY
btw, this makes almost no difference for SWING trading (where a tick or two is largely irrelevant) for for intraday scalping, it's critical
in very fast markets, i have seen crossed bid/asks in SPY. i have never seen that in ES
don't get me wrong, you can scalp SPY, but the futures are (in general) a superior scalping instrument
also noted that (imo and ime) if you can design a successful strategy for the ETF (SPY DIA etc.) then it will work with the futures - better
arbitrageurs pretty much ensure that the ETF vs. the futes stays within a relatively narrow band of fair value, of course.
but the main difference is with fills
ES has MUCH better liquidity and much better fills than spy, especially considering SPY does not have "perfect" short/long fills whereas futures do (futures were designed as a zero sum market for hedging after all)
i spent 6 months honing my strategy for YM by using DIA. the difference is very clear between YM and DIA and ES and SPY
btw, this makes almost no difference for SWING trading (where a tick or two is largely irrelevant) for for intraday scalping, it's critical
in very fast markets, i have seen crossed bid/asks in SPY. i have never seen that in ES
don't get me wrong, you can scalp SPY, but the futures are (in general) a superior scalping instrument
also noted that (imo and ime) if you can design a successful strategy for the ETF (SPY DIA etc.) then it will work with the futures - better
arbitrageurs pretty much ensure that the ETF vs. the futes stays within a relatively narrow band of fair value, of course.
but the main difference is with fills
advantage of ES: better tax treatment (treated as if 60% long term capital gains)
advantage of SPY: tighter spreads, ES trades in 1/4 points, SPY trades in pennies which represents 1/10 point
one of the main differences is that SPY's liquidity is fragmented among different ECNs, so you see lots of crossed and locked markets which usually just indicate stale quotes, and where you route your order is important.......this is one of the reasons I prefer ES, it is much cleaner to trade
advantage of SPY: tighter spreads, ES trades in 1/4 points, SPY trades in pennies which represents 1/10 point
one of the main differences is that SPY's liquidity is fragmented among different ECNs, so you see lots of crossed and locked markets which usually just indicate stale quotes, and where you route your order is important.......this is one of the reasons I prefer ES, it is much cleaner to trade