Why would you want to short SPY instead of S&P futures?

M

Maverick2608

Shorting SPY: payment of short fee rate; higher taxes in the US; usually higher commission.

Are there any reasons why you would want to short SPY instead of S&P 500 futures?
 
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Some traders may have a long term short using SPY they are planning to hold beyond a year - no rolls & lower taxes. Some of these traders will use futures to trade around their core SPY position. This keeps their trading costs lower, since they only need to trade in one direction with futures, & its a work around for the futures wash sales rule - its still a wash sale, but its legal this way.

Some traders may use SPY so they will not get shaken out of their position overnight.
 
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Robert Morse said:
If you do not have a future’s account and do not want one.
If the size of the future contract is too big for you.
If you have a PMA and want to hedge an SPX option position and want the margin offset.
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That. Also, if you are delta-hedging a SPY option position and do not want to deal with delivery.
 
comagnum said:
Some traders may have a long term short using SPY they are planning to hold beyond a year - no rolls & lower taxes. Some of these traders will use futures to trade around their core SPY position. This keeps their trading costs lower, since they only need to trade in one direction with futures, & its a work around for the futures wash sales rule - its still a wash sale, but its legal this way.

Some traders may use SPY so they will not get shaken out of their position overnight.
More...
%%
Amen and since PT Jones likes the futures, why try to compete with him??And believe it or not something like SDOW also pays a dividend.......... And have to close our a contract/panic selling dont have to close SDOW @ all- may want to but BIG difference between have to + want to. Dont know if SDOW if liquid enough for daytrading??
 
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