Does anyone know of any historical threads where the PROs and CONs were debated of trading ES vs SPY? Thanks a lot.
i think the key difference is ES trades almost 24 hours daily while SPY is restricted to regular trading hour. ES generally has lower spread/margin requirements as well.
ES is a Future so taxed as a 1256 contract. ES has a materially lower margin requirement. Short ES futures has no overnight borrow cost while most short stocks do including SPY. The only advantage I can think of for using SPY is if you want a long term position with long term tax treatment and dividends.
Some things - Trading notional amounts less than a single ES contract starts to get expensive, since the MES contracts have a high commission / fees usually. - No Ex dividend day to worry about with ES, (and less assignment risk if you are trading options) - [May be wrong about this] Cash has to be used as collateral for ES, rather than higher yield things like treasuries. (at least for my broker). I wasn't able to hold an ES position collateralized on my other shares.