SPY vs. ES (AHG)

G

ggoyal

Does the SPY move exactly like the ES?

I am thinking about switching over to futures.

I want to do some simluated trading b4 moving. I am trying to trade SPY, but there seems to be a lot of randomness. people say futures are "smoother" than equities. is that really true? If not, then other than taxes and leverage there is not advantage in trading futures.

QQQQ has such a small range it's not even worth it.
 
SPY and ES charts are exactly same for same period.

The main difference is leverage, taxes, margin.

1 ES point = $50

If ES moves 10 points , SPY will move $1.

Trading 500 SPY is same as 1 ES.


Quote from ggoyal:

Does the SPY move exactly like the ES?

I am thinking about switching over to futures.

I want to do some simluated trading b4 moving. I am trying to trade SPY, but there seems to be a lot of randomness. people say futures are "smoother" than equities. is that really true? If not, then other than taxes and leverage there is not advantage in trading futures.

QQQQ has such a small range it's not even worth it.
More...
 
Quote from ggoyal:

Does the SPY move exactly like the ES?

I am thinking about switching over to futures.

I want to do some simluated trading b4 moving. I am trying to trade SPY, but there seems to be a lot of randomness. people say futures are "smoother" than equities. is that really true? If not, then other than taxes and leverage there is not advantage in trading futures.

QQQQ has such a small range it's not even worth it.
More...

Sigh, it was only a little over a year ago that you said "futures are too risky" . Finally saw the light...
 
Quote from ggoyal:

Does the SPY move exactly like the ES?

I am thinking about switching over to futures.

I want to do some simluated trading b4 moving. I am trying to trade SPY, but there seems to be a lot of randomness. people say futures are "smoother" than equities. is that really true? If not, then other than taxes and leverage there is not advantage in trading futures.

QQQQ has such a small range it's not even worth it.
More...
They move pretty much the same.
You can get up to 2:1 leverage with 2x ETFs like SSO.
Up to 4:1 leverage purchasing SSO on margin.

With the ES you may get about 15:1 if you wish (be careful with such leverages!).

A problem with futures it that you get 'levels' of number of contracts:
Let's suppose you don't want any leverage, you need $63,550 (50 x 1271) per contract.
If your account has $100k, you have about $36k unused (aprox 100k - 63k)

The biggest problem with futures is that you can easily overleverage, if you don't have a strict discipline.
 
I don't mean to hi-jack this thread, but I have been having trouble finding an accurate source for ES historical data. AS noted above, SPY should track the ES which should track the S&P500. However, when I download historical data from YAHOO, they don't match at all. Does anyone know what my problem might be, or can you suggest a good (preferably free) source for several years of ES data that can be easily downloaded to Excel? Thanks for any help, and sorry again for the hijack.
 
Quote from Eldredge:

I don't mean to hi-jack this thread, but I have been having trouble finding an accurate source for ES historical data. AS noted above, SPY should track the ES which should track the S&P500. However, when I download historical data from YAHOO, they don't match at all. Does anyone know what my problem might be, or can you suggest a good (preferably free) source for several years of ES data that can be easily downloaded to Excel? Thanks for any help, and sorry again for the hijack.
More...

ES and other Globex data from 2002 to 2008 for free at http://www.slickcharts.com/cmedata.html

Note that the web site has a slow upload speed.

Do you really need years of data? www.opentick.com is another choice for free historical data.
 
Quote from crgarcia:

They move pretty much the same.
You can get up to 2:1 leverage with 2x ETFs like SSO.
Up to 4:1 leverage purchasing SSO on margin.

With the ES you may get about 15:1 if you wish (be careful with such leverages!).

A problem with futures it that you get 'levels' of number of contracts:
Let's suppose you don't want any leverage, you need $63,550 (50 x 1271) per contract.
If your account has $100k, you have about $36k unused (aprox 100k - 63k)

The biggest problem with futures is that you can easily overleverage, if you don't have a strict discipline.
More...

If you go with one of the wonderful brokers that offer $300 daytrade margins for ES you can get 210 to 1 leverage. Don't blink after you enter a trade or you might have negative equity in your account.
 
Thanks Jeb, I'll check those out. I feal a little more comfortable looking at years of data. I have been caught before by thinking that the most recent year is typical or indicative of the future. It is a good excersize for me to look at a lot of data and see how the market is evolving over time for a particular signal or indicater. Thanks for the help.
 
<i>"A problem with futures it that you get 'levels' of number of contracts: Let's suppose you don't want any leverage, you need $63,550 (50 x 1271) per contract. If your account has $100k, you have about $36k unused (aprox 100k - 63k)"</i>

With all due respect, none of that matters at all. Not one whit, not one smidgeon, not one iota. Nada

Here's the only number that matters: $50 per each ES index point, up or down. With that lone figure and that alone, you create your own leverage.

Want to risk -1% of your account per ES trade? How big is the initial stop-loss risked? -2 points from entry / -$100 per contract? Good. Then you need $10,000 capital balance to trade each ES contract under those parameters of leverage you decided upon.

Want to risk -0.1% of your account per ES trade? How big is the initial stop-loss risked? -2 points from entry / -$100 per contract? Good. Then you need $100,000 capital balance to trade each ES contract under those parameters of leverage you decided upon.

ES trades at 1800, 1500, 1400, 1300, 1000, 800 or 500 price levels from here thru year 2010. Doesn't matter. The $$ movement will be $50 per index point regardless. There is no other leverage of any consideration to any trader, swing or intraday.

Futures are as risky or droll - boring stodgy as each of us choose to make them. $50 per index point, per ES contract. Build from there. All the rest is irrelevant noise.
 
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