Stop Loss vs Options
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Always a possibility if the news is a big enough shock, but with the volume traded in the ES not "likely". (I can't think of one except for overnight holds through the weekend. Solution to that is to go home flat.)
The amount you could lose is maxed out (circuit breaker)
Theoretically, even that may not limit the loss.
you said day trading so rth. no you wont get any crazy fill with es one of the
most liquid securities on the planet.
most liquid securities on the planet.
Interesting on Option, buy your 3% risk stake in NQ Calls, they might swing to Zero value ( SL hit ) and then come back to profit before expiry, where as once SL hit game over you've got a loser.
Just checked Prices NQ Sep Calls 9500 $877 * 100 - $87,700 cost that's a lot to risk, billionaires game only.
Unless I've cocked math up ??
Just checked Prices NQ Sep Calls 9500 $877 * 100 - $87,700 cost that's a lot to risk, billionaires game only.
Unless I've cocked math up ??
Was thinking more of SPX spreads but its now obvious that the /ES is better suited with its liquidity and lack of greeks.
So your question is which is better
A) Go long / short on ES Futures with a SL ( I hope you know You can;lt trade the SPX as a direct closes is ES futures or SPY ETF )
Or
B) Instead go Long CALL or PUT...spreads on ES ( by the way there are are options on ES Futures directly so not sure why you mention SPX options? although SPX option spreads can be considered)
Each has advantages and disadvantages
Turveyd mentioned them ( although he gave NQ example)
With options when closing a profitable position Market maker spread could be an issue !
C) choice could be LONG CALL or PUT options directly no spreads
If things don;t go your way in case of B and C) time is against you
Paper trade and see if you see liquidity ( Liquidity in ES futures should not be an issue)
A) Go long / short on ES Futures with a SL ( I hope you know You can;lt trade the SPX as a direct closes is ES futures or SPY ETF )
Or
B) Instead go Long CALL or PUT...spreads on ES ( by the way there are are options on ES Futures directly so not sure why you mention SPX options? although SPX option spreads can be considered)
Each has advantages and disadvantages
Turveyd mentioned them ( although he gave NQ example)
With options when closing a profitable position Market maker spread could be an issue !
C) choice could be LONG CALL or PUT options directly no spreads
If things don;t go your way in case of B and C) time is against you
Paper trade and see if you see liquidity ( Liquidity in ES futures should not be an issue)
I day trade the ES using stops and targets. Out of the last couple thousand trades, the vast majority of trades terminated at the stop level, a small percentage incurred 1 tick of slippage beyond the stop, and a very small percentage incurred 3-4 ticks of slippage, but that is quite quite rare and usually just occurs during times of heightened volatility (e.g. Feb-March 2020, Dec 2018, Feb 2018, etc.).
I rarely trade outside of RTH, so can't speak to those hours, but for RTH, to avoid unnecessary slippage, my suggestion is.. do not hold positions into FOMC announcements (14:00 ET), and oftentimes, there is a small burst at 15:50 ET, so if you're holding a position at 15:49 and price is hovering near your stop level, it may likely spike a couple ticks beyond your stop at the 15:50 spike. Outside of those moments, I never worry about slippage.
For those who are active with day trading, stop loss should always be their choice. The instability of day trading is known by all and with your stop loss you can prevent getting indulged into a huge loss. It will help by stopping your loss after a specific value, so you always stay in the race and don’t lose more than you can afford.