Why trade QQQ and SPY vs Emini S&P and mini nasdaq?

[NihabaAshi]

Quote from Cutten:

The reason I ask was due to the guy Don Miller on Tradingmarkets.com who says he trades the QQQs and SPYs for a living. I was wondering why a professional daytrader would use them instead of the futures.

Cutten,

Look at the markets like a Track & Field meet.

Some like the hurdles, some like the shot put, some like the sprints, some like the long jump et cetera.

It's not so much which is better.

It's more what you want to do.

There are traders (retail and institutional) making a living in any areas of the markets...Eminis, ETF's, Eurex, Forex, Bonds, Equities et cetera.

You just need to sit down and figure out which one(s) you want to compete in...

Then fine tuning your ability into a specific area.

NihabaAshi

 

[taigong]

Quote from EricP:

One possible advantage for the stocks is that it may be possible to trade with a lower commission rate than with futures. For example, 800 QQQ might be done for no net commission (0.2 cps commission and 0.2 cps ECN rebate), while the same trade on the NQ's might cost ~$2-3. Another possibility is for those doing relatively short term trading in IRA's and are not able to do futures.

Actually you can short e-mini's in IRA whereas it is not allowed for ETF's. So one more advantage for mini's.

But on the plus side for ETF's are, scaling, size of hedge relative to one's position, liquidity on options (esp. on cubes), and maybe low commision, as you and others pointed out.

 

[Hurricane]

The futures have more advantages than the ETFs in my mind as well but it depends what you are trying to do. With ES there is such high volume on the bid and ask that it's tough to get executed some times so I end up doing market orders. The volumes on the SPY bid/ask are smaller. Also, when the bid/ask spread is 1 or 2 cents, the slippage is less on 500 shares SPY which is equvalent to 1 ES contract.