Volume on the Spoos Is Worthless

[gqguy2003]

Many traders make a point of watching volume on the mini S&P 500 futures. (ES).

I submit this is pretty much worthless as a indicator. The reason is there there is no volume on the Large contract. You can prove this by running a matrix on the Large Pit Traded Contract. Tradestation symbol SPU07.P Large institutions dont trade the emini. So if volume is being watched on the emini you have no idea of what the volume is in the large contract because there is no such thing. Consequently the impact of institutional trading of the large contract is not taken in to account when you look at volume on the ES.

A far better indicator is the premium. PREM

 

[hypostomus]

So why is PREM better?

 

[JamesVU2000]

No offense, but you are completely wrong about volume in the spoos

 

[gqguy2003]

Quote from JamesVU2000:

No offense, but you are completely wrong about volume in the spoos

Please offer your argument.

 

[gqguy2003]

Quote from hypostomus:

So why is PREM better?

Read my post on the PREM What it is and how to read it. That should help.

 

[gnome]

FWIW... I have found neither Volume nor PREM to be of value in trading stock indices.

 

[no. 22]

My view is that PREM isn't worth that much, unless you're an arb. Sure, sometimes PREM gets high, but if there's a continuation your short gets smashed. Another thing to consider is how often does your PREM update? With each tick it might be worth something, but if it's every few seconds you're not going to get much value out of it.

 

[frank_london]

Quote from gqguy2003:

Many traders make a point of watching volume on the mini S&P 500 futures. (ES).

I submit this is pretty much worthless as a indicator. The reason is there there is no volume on the Large contract. You can prove this by running a matrix on the Large Pit Traded Contract. Tradestation symbol SPU07.P Large institutions dont trade the emini. So if volume is being watched on the emini you have no idea of what the volume is in the large contract because there is no such thing. Consequently the impact of institutional trading of the large contract is not taken in to account when you look at volume on the ES.

A far better indicator is the premium. PREM

You think large institutions don't trade the minis? You must be kidding. Sorry man, but you don't have a clue.

 

[rateesquad]

Volume matters-------ALWAYS>>>>>

 

[jd7419]

"Large traders dont trade the emini".

Are you kidding me? The dollar volume of the emini is over 10 times the pit contract. The pit contract is a relic of the past.