Tough transition from SPY to ES

M

mnwind

I have been intraday swing trading SPY month options with good success rate recently. Many support and resistance of SPY are around prior close price, option strikes and integral numbers, such as ~$188 for today. I want to transit to ES mainly to save about $10 cost per round trade for 1 contract / 500 shares.

Here is the challenge I have now. After observing ES mini for several days. ES support and resistance numbers are all over the map, 1872, 1874, it also has different closing time, so I can hardly correlate the numbers to SPY. I was able to profit for all 3 trades with SPY today, but every time when I switched screen to ES, I had hard time to determine support / resistance.

Any thought? Is this natural? or maybe ES doesn't fit me?
 
Are you swing trading or day trading? Swing trading mean you're holding on for at least a day. If you made 3 trades that''s consider day trading. If that's the case then I can understand you wanting to save money on commission. But if you're swing trading, then $10 is nothing.

It is entirely natural. If you take a look at the ES, NQ, and YM. All indices futures, yet they form different patterns.

Just a suggestion. If you're having difficulty with the ES but are good with the SPY then maybe try using the SPY to time your ES trade since they more or less move in the same direction.
 
If it ain't broke don't fix it. Stick to what you know would be my advice. SPY and ES can not be traded in the same manner. Remember that you must also pay the spread when trading the ES so it's 12.50 + broker fees (.59-2.99) + exchanges fees (1.16) ect.. so your total cost to enter a trade is 15.50 give or take. not to mention the unexpected glitches and technical problems that can occur when dealing with different platforms and feeds. You can make money a lot quicker trading ES but it's also a lot easier to blow up trading futures than SPY imo. So it's a double edge sword, but If you are dead set on making that leap then go for it! Just my 2c
 
I hold for 30-60 minutes. So you mean watch SPY chart, and switch to ES when you are close to pull the trigger? two steps? Is this a common approach? Thank you!


jinxu said:
Are you swing trading or day trading? Swing trading mean you're holding on for at least a day. If you made 3 trades that''s consider day trading. If that's the case then I can understand you wanting to save money on commission. But if you're swing trading, then $10 is nothing.

It is entirely natural. If you take a look at the ES, NQ, and YM. All indices futures, yet they form different patterns.

Just a suggestion. If you're having difficulty with the ES but are good with the SPY then maybe try using the SPY to time your ES trade since they more or less move in the same direction.
More...
 
Thank you Freshworkz! I'm evaluating whether or not to make switch right now. No decision made yet.

Here is my calculation: 1 ES contract movement = ~ 10 SPY ATM options / Delta 50.

ES spread & commission with IB = ~$16.

I use optionshouse for options, and pay $10 for 10 options. Spread cost is 0.01x100x10=$10, sometimes I can save the spread by my enter technique with SPY, so the average cost is about $26.

So I can save about $10 / round trip. If I trade once a day, and 200 times a year, this would be $2,000 cost saving for each ES contract. Is my calculation way off?




freshworkz said:
If it ain't broke don't fix it. Stick to what you know would be my advice. SPY and ES can not be traded in the same manner. Remember that you must also pay the spread when trading the ES so it's 12.50 + broker fees (.59-2.99) + exchanges fees (1.16) ect.. so your total cost to enter a trade is 15.50 give or take. not to mention the unexpected glitches and technical problems that can occur when dealing with different platforms and feeds. You can make money a lot quicker trading ES but it's also a lot easier to blow up trading futures than SPY imo. So it's a double edge sword, but If you are dead set on making that leap then go for it! Just my 2c
More...
 
For me, huge difference between day trading stocks/etf's and futures as far as Price Action, especially with heavier traded instruments, Trading SPY is extremely heaviest? traded ETF, so arb is not going on much cause as soon as there is "tiny" difference some computer has arb it. SPY is traded in the hundreds of thousands based on using five minute charts, when you go to ES futures charts, less than 5% when you compare volume. When I use to day trade SPY, you could go make a sandwich and come back and it didn't move much whereas n the ES price changed two points, and that is cause of the huge reduction of volume. Just like if you traded ES and Lumber, you would say ES trades so nice and lumber might have 1-2 contracts per day. Way too often those who have done well trading stocks/etf's can't make transition well, if you well, I wouldn't switch until you have done much study first.
 
So you mean ES has more price noise than SPY? How did you transition from SPY to ES? After switch, are you only trading ES now? Or both SPY & ES? Thank you!



Handle123 said:
For me, huge difference between day trading stocks/etf's and futures as far as Price Action, especially with heavier traded instruments, Trading SPY is extremely heaviest? traded ETF, so arb is not going on much cause as soon as there is "tiny" difference some computer has arb it. SPY is traded in the hundreds of thousands based on using five minute charts, when you go to ES futures charts, less than 5% when you compare volume. When I use to day trade SPY, you could go make a sandwich and come back and it didn't move much whereas n the ES price changed two points, and that is cause of the huge reduction of volume. Just like if you traded ES and Lumber, you would say ES trades so nice and lumber might have 1-2 contracts per day. Way too often those who have done well trading stocks/etf's can't make transition well, if you well, I wouldn't switch until you have done much study first.
More...
 
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