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SPX/ES?SPY Newb Question


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SPX/ES?SPY Newb Question

  #1 (permalink)
 
Boomer34's Avatar
 Boomer34 
Georgia, USA
 
Experience: Advanced
Platform: TOS
Broker: TOS
Trading: SPX
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So am beginning to do some index options trading...mainly on the SPX.

This got me thinking...if I want to chart and do basic technical analysis (hope to do market profile)...what symbol should I track and chart?

Thanks for any clarification...

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  #3 (permalink)
 AsymOlly 
Tokyo, Japan
 
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Boomer34 View Post
So am beginning to do some index options trading...mainly on the SPX.

This got me thinking...if I want to chart and do basic technical analysis (hope to do market profile)...what symbol should I track and chart?

Thanks for any clarification...

There are 2 contracts on the CME for S&P500, the SP and ES. The SP is $250 x the value of the S&P500 index while ES, the e-mini, is $50 x value of S&P500 index. Both contracts have options so unless you are swinging with the big boys the ES is plenty of leverage and plenty of opportunity to make money.

To answer your original question, you should use the chart for the symbol that corresponds to the underlying on which you are trading options. So if you trade options on the ES then use @ES (for continuous contract and depending on your platform the "@" maybe some other symbol). I have to say that it's important you understand the close of trading for futures options as they are not the same a equity options.

From the CME website for ES american options contract ( E-mini S&P 500 Options [AUTOLINK]Contract[/AUTOLINK] Specs - [AUTOLINK]CME[/AUTOLINK] Group). You can see the quarterly option closes trading on the open for quarterly expirations.
CME Globex (Electronic Platform) QUARTERLY: 8:30 a.m. / 3rd Friday of the contract month
SERIAL: 4:00 p.m. / 3rd Friday of the contract month

You can also trade options on SPY (S&P500 ETF) which acts like an equity option, 1 contract represents 100 shares of the ETF which is about 1/10 the value of the S&P500 index so 1 option on SPY is $10 x SPX notional value. The contracts trade weekly, monthly and leaps and they settle on Saturday which makes last trading US market close on Friday of expiration week.

Some brokers offer very low fees for equity option contracts so you can size your position to fit your account size without paying a fortune in transaction fees using the SPY option. If you are truly a beginner then that is where I would start.

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  #4 (permalink)
JamesPowell
conyers ga usa
 
Posts: 17 since Nov 2016
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Spy obviously tracks the spx and you can purchase options on both. Spy options are much more liquid therefore cheaper with much smaller spreads. Regarding charting it is a good idea to use the continuous spx chart along with the spy chart. The spy charts like a stock so there won't be any overnight data on it. Only extended hours data. So the continuous spx data fills in the blanks of the missing data on the spy.

Hopefully all that makes since.

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Last Updated on November 19, 2016


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