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True, look at the index curves for the past 5 years. SPX, RUT and NDX are somewhat similar. The number 30 came from a trend following perspective because they hope that out of 30 diverse markets that a certain % will be trending at any given time
Can you help answer these questions from other members on NexusFi?
Thanks, gotcha more leverage and better tax treatment. I have never traded future options. But the open interest and liquidity in SPY options dwarfs ES options
Well 1 option contract is 100 shares of SPY so around 20,900k.
ES options which are 1 for 1 so 2092 x 50= 104,600k as I understand it from a different post. Maybe more like 5:1.
SPY 209.77
July Monthly 210 put = 109,217 open interest * (210*100)= 2,293,557,000
ES 2091.50
July Monthly 2085 put = 4,004 open interest * (2085 *50) = 417,417,000
You had mentioned "With ES puts there is enough vol that I feel comfortable having 1000+ of the same strike" You comfortable controlling a large percentage of the contracts?
Tastytrade did a brief market measure yesterday comparing the SPX, SPY & /ES. Unfortunately they do not go into detail about the tax advantages for the /ES & SPX.
1 SPX = 1000 shares of SPY = 2 ES contracts
500 shares of SPY = 1 ES contract
I suspect traders are worried about Fed mtg next week.
ES usually rises the week before ESm expires (6/19/15). Then drops the week after that. But with Fed mtg on Wed of that week who knows what will happen. I'm just going to ride it out and not try anything fancy. Going to be volatile next week.
I'm doing research right now looking at decay rates vs DTE vs risk. I will post when I am done.
I agree with you, I'm not really into doing anything fancy either. Usually when there are multiple down days a bounce back to the other side isn't far behind, after all it's only 30 points down from where I opened. It just sucks to take a position and then have 3 days of straight losses afterwards.
