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I initiated a swing short (much longer term than I show on this thread) on SPY today as we crossed back under the 200DMA. I am looking to fill the rectangle which represents a big island bottom gap but of course will monitor as time goes on. I note …
I didn't want to take that thread off topic.
As you can see I do not live in the US and I am not a US citizen.
Can I assume you trade the SPY for swing trades as opposed to say the VOO because SPY has better liquidity ie much higher average daily volume?
The fact that VOO's expense ratio is nearly half that of the SPY's does not impact/concern you for swing trades I assume?
I see SPY is actually classed as a UIT (Unit Investment Trust) whereas VOO is classed as an ETF. From my perspective as a foreigner I think I would be taxed the same way on each, but does this difference affect you ie what is the difference to a US tax payer between a UIT and an ETF.
Finally, in your post I linked to above you said you were initiating a swing trade SHORT on the SPY. How do you short the SPY? I would have thought you would have needed to place the short trade via an inverse ETF like 'SH'?
Liquidity is king. If you compare e.g. today's ETH volume, you find <1k shares for VOO vs about 1M shares for SPY at the moment.
Shorting the SPY is the same like shorting other shares. You need a broker who allows you to short the asset,
then you short it (i.e. you sell without owning the shares at that moment). The requirements and conditions
(account size, margin, interest rates etc.) depend on your broker. Inverse ETFs are mostly second-rate alternatives
for those who can't short.
Spy liquidity trumps any benefits of others being cheaper. It's all taxed the same- short term cap gain/ loss -here in the states. I use SH for shorts but I will not even look at that chart as it will mess with my head. I use First trust for a lot of my position trades and OIL for oil position( entered yesterday- pray it works out!)
Or when clients are long spy and you have discretion it looks bad to regulators when you short the same security They don't consider multiple timeframes- sometimes second rate is better than no trade. I've also had to give my trade to a client who did unsolicited sell later in the day as it looks bad if I got a better price. Many more complex considerations in my world
Probably the biggest reason to play SPY are the options, three weekly expirations vs monthly. Also they somehow manage to keep SPY pretty close to the index * .1. Been a little curious about how they manage to do that.
If you are just buying the S&P 500 without options, maybe VOO is less intense.
They don't consider multiple timeframes- sometimes second rate is better than no trade. I've also had to give my trade to a client who did unsolicited sell later in the day as it looks bad if I got a better price. Many more complex considerations in my world