ES vs SPY

Discussion in 'Trading' started by quin8670, Dec 5, 2021.

  1. Does anyone know of any historical threads where the PROs and CONs were debated of trading ES vs SPY?

    Thanks a lot.
     
  2. 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.
     
  3. Robert Morse

    Robert Morse Sponsor

    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.
     
    Last edited: Dec 5, 2021
    Spaghetti Code, MACD, DaveV and 3 others like this.
  4. MACD

    MACD

    @Robert Morse -- once again (as always) provides great "to the point" content. Thanks
     
  5. s trader

    s trader

    ESPIONAGE VS SPY. Somehow i think these are related.
     
  6. Robert Morse

    Robert Morse Sponsor

    Thank you MACD-One more advantage of futures, no PDT rule.

     
  7. 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.
     
  8. Overnight

    Overnight

    Notional amounts mean nothing on ES futures. STAT