Which has lower comissions trading stocks or trading futures

[Sky123987]

because futures are leveraged instruments has anyone figured out "on a bang per buck" which is cheaper?

 

[rc5781]

Futures all the way. For daytrading the ES mini, with about $2000 you can buy one contract, which is worth about $73,000 right now. Roundtrip costs $4.8 for IB.

For every dollar move in the ES, each contract increases/decreases by $50.

 

[Sky123987]

well if it's worth
$70,000 and say the average stock is $50

then you'd need 140 shares to equal 70,000

so 1 contract is to 4.8 as 140 shares is to x


so I guess paying 4.8 per contract round trip is like paying .0035 / share round trip or .00175 / share THAT'S CHEAP!

 

[Steve Tvardek]

I trade w/ Velocity Futures and it costs me $500 per 1 ES lot. Better margin than IB. For daytrading ES I preferred Velocity over IB. However, IB allows you to trade many more markets. I guess it just depends on what you want to do.

Quote from rc5781:

Futures all the way. For daytrading the ES mini, with about $2000 you can buy one contract, which is worth about $73,000 right now. Roundtrip costs $4.8 for IB.

For every dollar move in the ES, each contract increases/decreases by $50.

 

[chud]

The question was about commissions, not margin required.

If you're using IB or similar commission structure, stocks are far, far cheaper in commissions than futures when you compare the potential for profit. Assuming profit potential is defined as 14 day ATR multiplied by $ gain per point, you get the following:

Product   Profit potential per $1 comm.
es            $285
er2           $426
nq            $214
ym            $258
aapl          $846
rimm          $797
goog          $2325
bidu          $2613

This is assuming you're trading stocks in 200+ share blocks to take advantage of the $1 minimum.

Of course, ATR may not be the greatest way to judge profit potential for everybody's trading style, but that gives you an idea.

 

[rc5781]

Well if you're considering SPY versus ES mini, you save .20 per round trip trading the ES mini.

Also, you can save 30% on your tax bill because a certain percentage of your profits on futures can be tagged as "long term" profits. You can't do this with stocks unless held for over a year....

 

[Sky123987]

Quote from chud:

The question was about commissions, not margin required.

If you're using IB or similar commission structure, stocks are far, far cheaper in commissions than futures when you compare the potential for profit. Assuming profit potential is defined as 14 day ATR multiplied by $ gain per point, you get the following:

Product   Profit potential per $1 comm.
es            $285
er2           $426
nq            $214
ym            $258
aapl          $846
rimm          $797
goog          $2325
bidu          $2613

This is assuming you're trading stocks in 200+ share blocks to take advantage of the $1 minimum.

Of course, ATR may not be the greatest way to judge profit potential for everybody's trading style, but that gives you an idea.

way to choose stocks whose share price is near the average

 

[chud]

Quote from Sky123987:

way to choose stocks whose share price is near the average

You're looking for "bang for your buck" right?

 

[teun]

Slippage is more important (in terms of cost) than commission.

Slippage on most stock is higher than on the (equivalent) futs, but SPY is an exeption.

 

[Sky123987]

they you should be the one receiving the slippage. Everyone always talks how slippage is a negative, well if everyone is losing money via slippage it must be going somewhere...