ES

GPUssydestroyer

Good thing we can also just wait until Sunday and buy ES

warwww

They won't let ES fall more than 5 points.

k3t4mine

ES 🦘

Significant_Speed854

Unsure why this Warsh talk really matters. We just had two consecutive days of shit ass numbers and are down less than 2% NQ and less than 1% ES (FROM ALMOST ALL TIME HIGHS). Like this will move the markets.

OrangeForeva

ES: -0.,26% NQ: -1.09% What a disparity.

Ok_Cry7572

ES futures may be down overnight, but if you bought SPY for a bounce at the close today then what gold is doing should put you at ease. SPY and Gold have had a positive correlation, and where Gold leads SPY typically follows.

AdhesivenessOk1997

/ES? Not true at all

OrangeForeva

Barely moved, alright. LOL. ES looks very similar. https://preview.redd.it/urd340gxgfvh1.png?width=1102&format=png&auto=webp&s=32b057eacecf3f862822d6eddd8d9449a58d3ba6

LarryStink

Its only bullish as long as vol stays where it is or drops further. (Hard to do when its at ~15) at 7800: +1 vol point = ~900 ES sold. +3 = ~2,500. -1 = ~1,000 bought. at 7700 (down 1.4%): ~18,800 ES already sold from the spot move alone, then +3 vol = ~2,200 more. index down with vol up = both push the same way.

BarbellPadawan

Realized: -170 /ES, -200 /CL, +130 /GC, +70 TSLA (market short positions), +166 CVNA (short), +41 MU (mostly short), +13 /BTC. So barely positive. About +12.5%

Responsible-Milk-259

Where are the S&P futures at right now? The market is open and you can hedge your SPY exposure by shorting ES futures (e-mini). They are worth $50 a point, so calculate how many you need to adequately hedge. You won’t need to post a cash margin as you’re reducing the portfolio beta.

AnnJilliansBrassiere

NQ/ES opposite day?

tldamico

I noticed that last night. Nikkei was down 2.6%. Kospi down 6%. ES_F was basically flat.

prana_fish

Look at the differences between ES, NQ, and RTY overnight. AI got rug pulled at the breakout again "just" last week to rotate into rest of market, I'm guessing because yields have finally topped. They're gonna keep doing this because retail keeps trying to buy the dip in tech.

LarryStink

Im 4 for 4 on these overnight ES trades using the MM levels for spx. ~10% porfolio gains each time. Up 100% total in a month. The hard part about these streaks every single time is getting sloppy and giving it back. I refuse to that again 😤 

LarryStink

> 7850-55 is very likely target for ES tonight but it will likely reject. The equivalent SPX implied fair value is 7800-7805 which is where a large long and short cluster sit on MM books. If/when it rejects its a short down to 7825 which is the spx equivalent of 7775 the lower cluster on the MM book. I suspect tomorrow's closing price will fall somewhere near there.  Like clock work 😴 

LarryStink

7850-55 is very likely target for ES tonight but it will likely reject. The equivalent SPX implied fair value is 7800-7805 which is where a large long and short cluster sit on MM books. If/when it rejects its a short down to 7825 which is the spx equivalent of 7775 the lower cluster on the MM book. I suspect tomorrow's closing price will fall somewhere near there. 

tldamico

Nikkei down 2.67%. Kospi down almost 6%. ES_F basically flat. What a time to be alive.

Resident-Juice9763

We’re not looking at ES

housemouse431

NQ looks like AIDS compared to ES ovn

1098duc_w_the_termi

Wrong day to be bullish on ES. Should’ve been theta gang today. Gonna sell some put spreads at least to make some of it back

1098duc_w_the_termi

ES double top in an overnight move. Gonna fuck a lot of people

MarginCalledManager

Smashing that ES put button right now thanks to the overnight hopium green candle.

MarginCalledManager

Smashing that ES put button right now thanks to the overnight hopium green candle.

Shijaki

volume on SPY doesn't tell the whole story though. SPY, SPX options, and ES futures should probably all be taken into consideration if you are going to draw any sort of conclusions

Separate-Salary2118

The best one i have found is a guy called SatoTrades (https://satotrades.com/), full time trader from Switzerland and he streams ocassionally on YT aswell, doesnt flex at all and trades with low risk still pulling in 10k+ days sometimes live on stream. He trades futures (NQ and ES) using orderflow and shows entry, exit Sl and TP on stream. He also has a private channel that is paid but its not needed to join, he has a lot of good articles and free guides on his YT and website aswell.

LarryStink

Yes I know MM are delta neutral. But delta changes with the passage of time (Charm) and actively buying/selling futures throughout the day depending on what their exposure is to maintain that delta.  As soon as a MM takes on a position its immediately hedged. For SPX they buy or sell ES. But the hedge is dynamic and changes with price, vol, time, etc. Knowing what they hold, and how they are constrained by that hedging requirement gives you a predictable edge.  You are a poker guy, so ill use the reference I was taught. Having access to what the MM owns is like having the largest player at the table cards face up and their strategy and rules taped to their head. It doesnt mean you will win every round  because there are other players in the game. But it gives an incremental advantage that can mean the difference of positive EV or not.

NihilAlien

I’m actually very surprised that LLMs aren’t smart enough to discern the difference between SPY and ES point scales.

Sudden_Ad_4193

If you have the capital and don’t want to constantly watch the market, I’d trade ES futures. As long as you know your levels, just set your buy and sell orders then let the trades come to you. Don’t short it, ever, ain’t worth it. No option greeks to worry about. Don’t trade contracts within a week of the expiration date.

Bubbly-Fly-205

/ES getting ready for big move.

wam1983

I said /ES or SPX. 100pt move in either is a 10pt move in the SPY. Those were OPs numbers.

wam1983

What you just said is impossible isn't actually impossible at all. That's a 100 point move in the /ES or SPX in an hour. That's barely a 3 sigma move if I had to guess. When it happens, those $.05 options inflate to whatever price causes a full wipeout of your account. Your broker will step in, liquidate your positions, and you're money (all, not some) is gone. Don't believe me? Ask AI to go find you day in which a 2% move higher occurred in the last hour of trade. Confirm it, and there's the day when you would have blown up your account. Stop doing that strategy right now. You will absolutely, unequivocally, with no uncertainty at all, lose all of your money in one painful day.

Strong-Comment-7279

Bid Ask attention is super important. Spend a few days doing your paper w B/A leading your strat techs and paper execution. I haven't yet engaged that volume bubble indi on TOS, but it's on the radar, incoming. I will say I do not trade through TOS, and I'm not profitable yet. I only care about community. Rising tides raise all <serviceable> ships. You said SPY. SPY is fun and terrifying. SPX even more so. ES! dominates it all, and is the only thing worth paying attention to for trading in that spectrum of equity. You want to do some real paper trades of statistical significance, follow ES! B/A and paper trade SPX(W), either one, or SPY, if you must. Me, I'm not ready, not interested, in futures - my thing is I only care about the most (il)liquid - it is both - financial instrument on earth - the downdrafts of ES!.

hermeskino715

You're talking about Qs or IWM? Even ES is only .08%

ccs77

I sold all my Nio last week and dumped them into xpev. Nio just isn't it. The battery swap was cool when charging tech was still slow. But right now China has at least 3 brands that can do 1.5 MW charging. That basically destroys the moat for battery swaps. It will still have its market share, just that it won't dominate. Not to mention, CATL does battery swaps now, so in the long term brands will likely use CATL battery swaps and only Nio (and geely) will be on Nio power. Next, the strategy of the company had been poor. From Nio houses to Nio phone, lots of cash burning with little to show in profit. Looj at sales, the only vehicle that is selling well is the ES8. The onvo and firefly sub brands aren't gaining traction. The ultra premium ES9 and ET9 are doing OK but not crazily good like the ES8. The rest of the lineup are worst. A year ago, Li auto were in the same phase with a couple of vehicles driving sales. Look where they are today because their product line isnt strong. Lastly, Nio with their investment in R&D, have one of the poorest autonomous driving tech. They aren't even top 3 right now in China, behind xpeng and huawei for instance.

spxspreads

The next magnet on ES is 8020. This is by the current ES/SPX spread around 7965. And is not not that far above.

MarginCalledManager

options on futures is playing futures... but if you want to buy an ES contract... yea, you need about $30,000 is cash margin

Delicious_Put_5857

decision to long RTY instead of ES: so far, horrendous

MarginCalledManager

You need $1500 in your account to trade /ES options.

Pluth

I wish I had enough money to play /ES. Whatever I am doing with /MES is working, so maybe one day.

Delicious_Put_5857

ES is +0.02% and ur all panicing i cant wait for the -7% day

SwordfishLopsided

Do ES instead

Ldn_twn_lvn

All they had the do was pick an entry on NQ or even ES, ....and they would have been printing geetus How much more wronger, do dey need 2 get?

r_brockmaniv

Why not on /ES instead?

Delicious_Put_5857

im short in case we got a super clean triple top at ES 7850. but i expect it to get stopped. this has been a delicious put update.

Bubbly-Fly-205

/ES running and hitting numerous targets after large bull flag breakout.

Jazzlike_Laugh_1358

what you're seeing is a pretty common pricing/ margin mismatch between the two. the broker is applying a securities margin calculation to SPX and a portfolio–based (SPAN or similar) to ES. because SPX options are cash‑settled European style and the EA treats each leg more conservatively, the per‑contract cash buffer ends up almost twice what you see for the equivalent two ES contracts. if you only prize margin you could still get a better cost‑efficiency by moving to a vertical or spread on SPX – that often brings the R' down to the 2‑ES level, and you might even keep the ETF collateral benefit. on the upside the ETF gives you that 5‑% dividend/interest plus upside risk, so the higher initial buffer may not be a net drag if you’re comfortable with the cash tie‑up. bottom line: it’s a broker/system thing, not a hidden trigger. unless your strategy relies on physical settlement or you need the extra hours of the ES, stick with SPX and just use verticals to tame the margin.

moorhound

that 7782 -> 7788 gap ES=F gap fill was nastyyyy lmao

Upset-Motor-2602

Just shorted some ES futures, we are mooning for sure.

AdhesivenessOk1997

If oil is up /ES futures red……

SeveralBollocks_67

Just bought an ES500 electric. No more gas reliance for me! Bullish.

CoolFoot8162

OP’s short‑put setup on NQ is a solid theta source when IV is fat, but a lot of folks add a front‑ratio 1:2 put spread on the same expiry to keep the income while capping the 100‑point move risk, and the SPAN margin will be well below a lone short put. Do the same on ES but stretch the long side a touch to reduce the bid‑ask bleed; GC is great for iron condors thanks to its low IV, just keep an eye on the SPAN meters once IV spikes.

Delicious_Put_5857

stocks are scary theres too many, rather just have ES NQ RTY ZT ZN CL HO VX on a screen and go from there

Sea_Roll_6474

i usually do the same throat‑wearing 0.1‑0.12 delta short puts on the NQ for about 10‑15 days to keep that time‑decay drip, and on ES I layer a front‑ratio credit spread to slice assignment risk while still profiting on theta. on GC I trend‑play a strangle or iron condor because the vol is low and it lets you stay inside the defined‑risk zone; just keep an eye on SPAN margin and roll if IV jumps. the main rule I follow is: sell un‑needed slippage (wide bid‑ask), size by how much you can stomach a complete move, and always have a quick exit plan before the in‑the‑money knock‑on.

Bubbly-Fly-205

/ES trapped bears yesterday and ran over 100 points. Nothing to do until next bear trap.

DatekSince96

I sell a .12 delta csp on ES, as close to 45 DTE as I can. Close at 21 DTE. I started doing this from a suggestion that Tom Sosnoff gave on Tadtytrade.

Competitive-Buy8341

NQ options are not as liquid as ES, GC, 6E, or ZB. Check OI, volume, strikes and bid/ask spread in others. You will see what I mean.

Competitive-Buy8341

Yes. I like SPAN treatment. Mainly ES, GC, 6E and ZB. NQ is too big for me

btsd_

Robinghood and ToS do, and a majority of the posts I see are from tgose apps. I know its recent on robinhood but I honestly cant recall a single post about ES or NQ positions

MarginCalledManager

The /ES has options that trade 23 hours a day…..

MarginCalledManager

https://preview.redd.it/flbtknml3ysh1.jpeg?width=1320&format=pjpg&auto=webp&s=12369fa37e3212a3043ce6de4c4fcf7f94595b2b WTF /ES spreads are you looking at that are “worse”… you know the /ES tick size is 0.25 right? /ES and /NQ and /YM are far superior and trade 23 hours a day.

Recent-Pollution-715

getting the IV mismatch is basically because VIX options are quoting the forward volatility expectation, while UVXY options are quoted against a leveraged short‑futures position that resets daily. The daily reset forces the fund to roll into further out‑of‑the‑money futures, which are dragged down by the contango curve, so its implied vol stays lower. if you’re looking to hedge the market, just walk into an out‑of‑the‑money SPY or /ES put—it’s simpler and doesn’t suffer the UVXY decay. UVXY is better only if you want short‑term, highly‑leveraged exposure to a VIX spike, not a blanket hedge.

MarginCalledManager

WTF /ES spreads are you looking at that are “worse”… you know the /ES tick size is 0.25 right? /ES and /NQ and /YM are far superior and trade 23 hours a day.

Confident_Double1392

NDX is to SPX what QQQ is to SPY and NQ is to ES. Volatility cuts both ways, but it does make for some cool reddit gains.

btsd_

Agreed, but again, im talking about pure Yolo degenerate 0dte. Not responsible trading strats lol. I see people dumping 10k, 20k on random spy or qqq 0dtes, and wonder why Noone does it on ES or NQ. Especially as NQ will easily move 100pts in a couple minutes fairly often any more. On a spike or drop like that on NQ, QQQ options will usually not return the same % move in that time frame, at least not that I have seen

Jaded-Shirt-6262

Because people here on WallStreetBets are regarded lol. But I agree with you. I lost a bunch last year trading SPY/QQQ 0DTE. But this year I trade only ES/MES and finally became profitable.

AdhesivenessOk1997

Watching yields and $104 Brent and +93 WTI. Trading /ES overnight.

FrenzyCapital

Most people here covered the big point, but one thing that helped me was to stop triggering off the option price at all and watch the underlying instead. On a day like April 9 the SPX option quotes were garbage, but SPX itself and /ES were trading fine the whole time. So instead of a $20 stop on the option, pick the SPX level where you'd want out (say your short strike minus some cushion) and set an alert on that. When it hits, you either close the option with a limit somewhere reasonable or you hedge with futures right away and deal with the option once the spreads come back in. You're reacting to a price that's actually real. On your follow up about /ES vs /MES, the quick math goes like this. An SPX option controls 100x the index, /ES is 50x, and /MES is 5x. So if you're short one SPX call with a 0.30 delta, that's roughly 30 SPX deltas, which is about 0.6 /ES or 6 /MES. That's why /MES is usually the better fit for one or two contracts, since you can actually match the size. Futures trade almost around the clock Sunday night through Friday, so yes, it works after hours. Just remember the delta moves as the market moves, so a hedge that was right at 0.30 delta won't be right if you're suddenly at 0.60. I wouldn't try to automate it. I'd just know your numbers ahead of time so you're not doing math while it's ripping. Honestly though, the real lesson from that day is the one ThetaEdge said. If you need a stop to survive, the position is too big or should've been a spread. A long wing is the only stop that's guaranteed to fill.

Additional_Coach5121

You're right. ES is ranging since ages. I hope we see some volatility with the midterms until spring 😀

maomaocat

lol /ES just went red, whaat is going on

Tokyo-Dream888

ES is rippin higher damn

JumpyRubin6

The gap between SPX and /ES at the open isn't just noise, it's structural. Since /ES trades 23 hours a day and SPX only prints during regular hours, all the overnight movement gets compressed into that first SPX print at 9:30. That's why you see a 20pt green candle on SPX while /ES is red. SPX is catching up to everything that happened since yesterday's close in one violent tick. The futures pricing model the top comment mentions is the technically correct answer, but for practical trading you might have better luck watching the SPY/SPX arbitrage instead. SPY options are liquid enough premarket to give you a cleaner read on where SPX should open. Some days it still won't be perfect, especially around expiration or big econ data, but it beats eyeballing /ES point moves and hoping for the best.

iamcraby

I think you missed this part: "1x SPX option charges $80K margin, while 2x ES options charge only $60K margin"

sepist

/ES is a a 50 point multiplier, SPX is a 100 point multiplier

Same-Dig3622

ES red on the day, oops! Data too fake for Mr.Market!

OurNewestMember

Tbh, I'm more likely to trade overnight for serendipity -- closing out risk during overnight dislocations (instead of purely riding out short vol probabilities). You might be able to guess from this that I don't dynamically rehedge full deltas (I might fully hedge at open, though), so if I were to throw on an outright ES overnight, it would likely be an under hedge delta-wise

Kobe_4_three

Return on buying power is the right frame. Same exposure but SPX ties up way more capital. Does the gap narrow much with spreads or does ES still win?

Kobe_4_three

Hedging with ES instead of relying on SPX global hours is smart mechanics. Most people just white-knuckle the weekend. Do you hedge the full delta or just take the edge off?

Additional_Coach5121

Retails make a very small percentage of the overall trading volume. Lets forget the idea of stop hunting an big fish trying to catch our tiny sizes. Big participants take hours or even days to get in and out of positions via algos, thats what we saw yesterday with ES and NQ.

Positivedrift

Two different margining systems between the two products. Its as simple as that. SPAN can bite you though if you are not careful and/or don't understand how it works. Index is cash-settled european style with no early exercise. ES settles to a contact and can be early exercised, though I've been trading ES for years and have never heard of that happening. Index options are usually treated a little more favorably in terms of capital requirements compared to equities. In other words, a 10-lot of SPY will require more capital to hold than a single SPX contract. You'll pay a lot less in fees for SPX over ES. Over time, that will prevail over the difference in capital. Also worth noting that the futures contact is not the index and can move differently. In all other ways I can think, it doesn't really make a difference which you trade though.

Equivalent-Jaguar-55

ES why cant you be more like your brother NQ??

OurNewestMember

The easiest thing to say here: achieve cross margining when possible. Basically, if you're net shorting S&P500 directionally, do that with SPX. Opening trades for zero margin. Easy peasy. Tbh, it sounds like many of your trades won't cross margin, but still try (cross margining is when the combined requirement is reduced due to risk offset, not when the requirement is satisfied from something other than cash like from long ETFs). Now, the rest of it. I'm going to assume your cost to fund futures is about zero and not 6%, because that's achievable (details later). With those basics, ES vs SPX. Some questions are mostly margin independent, like if you need physical settlement or American style exercise, it's going to be ES. So we can mostly ignore obvious deal makers/breakers. So the securities account has long marginable ETFs and maybe a short box and some SGOV/BIL/etc (see later). A short S&P500 put is not getting any margin favors from the long ETF. Couple that with higher margin requirement and, "not SPX" is the answer for selling puts here. Short calls (or long puts) we already mentioned indirectly - should be a obvious win with SPX (given the long ETF holdings). What about strangles? Smaller futures margin should dominate here. But consider lifecycle. If you're going to manage aggressively, futures costs and trading hours could matter, etc. So roughly speaking, open trades wherever margin is lowest. You'll use more of that 60% excess liquidity most efficiently by doing net short calls and net long puts with SPX. But "using up" more than the 60% utilization for its own sake (by suffering higher margin requirements) is not necessary because you can (and probably should) take like 1%age point of your excess liquidity and move it to futures, so you can get the lower requirements at negligible extra cost. Which brings us to...funding futures trading should roughly cost zero. The optimal setup for futures is a big box (eg, buy 2000 wide for 1900 debit or whatever, and give it some duration so you're not messing with these constantly). It earns the implied rate and will satisfy your margin requirements. Having it doesn't mean you must trade futures (you'll earn the going rate regardless) If you need cash (you do; you're cash poor, as you're supposed to be), sell a box (I'm assuming you don't want to sell your ETFs and replace them with calls/synthetics). Futures margin deposits should not come from the broker. Also, sell a box, and leave it. You "pay it off" by pumping up your SGOV or something, not crossing the spread a second time and even risking needing to open another box due to shortsightedness. Good funding hygiene helps cover all your trading costs! If your securities account is $300k NLV, then putting $300k notional deposit into your futures account should cost you less than 1%age point of your securities excess liquidity (you'll go from like 60% to maybe 61% utilization). It's achievable to cover a year's worth of trading for like $70 of slippage (which should be "paid for" by 1 or 2 weeks of open futures positions not being secured by USD cash). This is absurdly cheaper than borrowing from even "the best" which will cost you 120+bps (and that's assuming you're borrowing millions from either IBKR or RH Gold, lol). Ie, structure your portfolios in advance so that there's little cash movement for futures (or even opening SPX debit positions). Then you can pick SPX or ES based only on product fit and margin efficiency. There's plenty more on cash management, but that's enough for now. Some scenarios. ##Scenario: Long ETF, sell an S&P500 strangle SPX: $60k requirement can come from the excess liquidity in the ETF. ES: $40k requirement comes out of the excess liquidity in the box (actually you might release like $1k excess cash back to securities, just use SGOV/BIL/etc to soak it up) ES likely the winner due to the lower requirement ##Scenario: long ETF, buy S&P500 OTM put debit calendars (assume cash settlement is okay) SPX: requirement should be about zero (cross margining), and the debit should come from selling leftover SGOV/BIL or whatever you worked up when you sold the big box you need because you're cash poor ES: normal SPAN2 requirement (not bad, but likely not zero) which will be deducted from any excess in your long box. Debit also should come from selling bills, same as for opening the debit SPX position SPX probably the winner due to the negative Deltas nuking the requirement. Most people will not setup their accounts like this, and then cash management becomes a completely avoidable recurring cluster. Boxes could just be managed twice a year (December and January) and then fine tuning with something like SGOV can happen like 12 hours a day with penny wide spreads. Brokers sure fleeced the public on funding futures accounts 😂 So here's the answer: - settlement and assignment characteristics always dominate the SPX vs ES choice - always go for the cross margining in those few applicable cases (SPX short calls, long puts in the securities account). Of course both portfolios will change over time - Get your cash management setup on both securities and futures, so that funding is a non issue for choosing SPX vs ES. Obligatory caveat: technically long options don't generally have a margin requirement, but we can pretend like they do because they will tend to reduce the requirement when you do put on marginable positions (eg, when we say adding net long puts should be done with SPX)

iamcraby

If I'm holding all cash, ES options are better since the margin requirement is way lower. Better off-market hours too

nq-FOMO

hedge with /ES or /MES until the options prices calm down.

Lumpy_Ad7971

i trade them a fair bit, mainly on /ES and /CL. the big draw for me is the 1256 tax treatment, 60/40 long term/short term split is nice no matter what your bracket is. liquidity can be spotty on some contracts though so check the open interest before you jump in

OurNewestMember

#1 is if I want physical settlement (this is important for hedged/calendarized structures) #2 is risk-based margin. (Retirement or other non portfolio margin accounts, I'm much more likely to use futures) #3 is if I wanted American style options (quarterly ES) #4 is remaining portfolio composition (related to #2) -- achieving margin offset (eg, SPX call credit spread might be "free" against long stock) #5 is transaction costs (futures tend to cost more for commissions/fee, exercise and assignment fees, and unwinding to avoid pin). In some cases, futures may be cheaper #6 is trading hours. If I expect to need to adjust aggressively near expiration, I'll more likely choose futures (not all of my accounts have SPX global trading hours) It's unlikely I'll encounter a situation where it's a toss-up. Each instrument has very valuable advantages as well as pitfalls

CCisreallyhot

What are your considerations when looking at /ES vs SPX?

Embarrassed-Bank2835

Yeah, that can happen. SPX and ES options can look economically similar on paper, but the margin models are completely different depending on the broker, account type, portfolio margin treatment, and what collateral they’re willing to recognize. I’d compare them on return on buying power, not just premium collected. If SPX ties up 30–50% more capital for basically the same exposure, that matters a lot. Also worth checking whether the margin changes materially with spreads instead of naked short options, because sometimes the capital efficiency difference gets a lot smaller once risk is defined. In your case the ETF collateral treatment might still make SPX better overall even if the listed margin looks worse. I’d run the comparison based on total usable capital, not just the per-trade requirement.

Embarrassed-Bank2835

I treat both more as context than as a signal. GEX can help explain why price is getting pinned, why certain strikes matter, or why volatility might expand, but I wouldn’t take a trade just because some level is labeled “gamma support.” Same with options flow. A big print tells you something happened, not necessarily why. Could be a hedge, spread, roll, closing trade, part of a bigger position, etc. The useful part for me is when it lines up with price action I already care about. If ES is reacting around a major level and the options positioning suggests there’s a reason for that area to matter, that adds confidence. I still want the chart to confirm it. For a paid tool, the thing I’d care about is clean data, historical context, filtering out obvious junk, and being able to see how positioning changed over time. A free tool could replace it if it did those things well. The raw “big call bought” feed by itself doesn’t do much for me.

iamcraby

My intention is not to solely reduce margin. Of course there are many ways to do that. I'm just wondering if SPX and ES really do have very different margin calculations and if SPX's is almost always way higher, or if I'm missing something. Call spreads, or buying a far OTM option for that matter, do reduce the margin but if you did the same legs in ES the total margin would be even less from what I noticed.

iamcraby

Thanks for the response. So here's the thing: if I trade in SPX options, the positions cross margin with my securities (ETF) completely, I have 0 cash in my account. Excess liquidity is 85% of the value of the ETF (remaining 15% is the margin/haircut for holding the ETF) but if I trade in ES options, the positions still do cross margin with my securities, but I'm charged a 6% interest which defeats the whole purpose of holding an ETF as collateral. I'm expecting a decent return from my securities, and on top of that a decent return from my Options trading. Also, my trading is not just selling PUTs. let's say I do everything - spreads, strangles, straddles and calendars.

OurNewestMember

They have to support most of those hours, so it's mainly Schwab, IBKR and tasty. Etrade and Tradestation could work, too. But this means no active trading on RH (they are getting better, though) or fidelity or webull, etc. In the spirit of letting mechanics drive the strategy, I don't really heavily on SPX global hours, which is what lets me not be stuck solely on IBKR (my SPX positions are always hedged, so emergency work can be done with ES instead which many brokers support unlike SPX global hours) I mean, set safety constraints upfront (like which brokers and strategies) and then the world's your oyster

OurNewestMember

Well, the specifics matter. The 15% ETF holdback will not really be your burden if you get good cross margining. But you may not get good cross margining. So the biggest question is if your options strategies will cross margin with your existing securities. Next question (especially if the prior is "no") is if you are still better off absorbing the higher SPX requirement to be able to soak up excess risk capacity from your securities. Tbh, going from utilizing 60% to 80% risk capacity I would not be excited about absorbing the larger margin burden (but I haven't run the numbers). And the 20-25% margin might be inflated (SPX vs ES), but that is coming from your excess liquidity rather than maybe 15-20% cash sitting in your futures account (I mean, you're always going to take a hit when you use securities instead of cash). Also, it's not totally fair to count the 15% requirement for the ETF since you need to reserve that regardless of options positions (unless your options cross margin and basically reduce your 15% requirement) Basically, if I were getting net short SPX against my net long ETFs, I'm probably happy to do it (ie, if I get cross margining I'm likely to come out ahead). But if I'm mainly selling puts, it's not as clear

iamcraby

but cross margining risk against my securities already has its own cost - the ETF itself blocks about 15% value as margin. I mostly use 60% of my net value to sell options and pay for margin (remaining 40% is the cushion for MTM losses or margin increase during IV spikes), if I switch from ES to SPX it becomes ~80% So 15% for pledging my ETF + potentially another 20-25% = 40-45% is the total cost.

OurNewestMember

Yes, this sounds about right. It's effectively the price of being able to cross margin risk against your securities? But more precisely, I don't know why SPAN2 and securities margin (TIMS?) plus any broker markup differ so much and so consistently. Anyway, SPX and ES both have their place; one cannot replace the other. Margin is one factor among many to decide which to use

iamcraby

Portfolio margin but I've tried various different combos and found that the margin for SPX options is always higher compared to ES

iamcraby

My problem is not how much margin I pay. It's more about how much margin I pay per $10000 (or any particular amount of) notional exposure. 1 SPX = 2 ES = 10 XSP but if 1 XSP option selling attracts an $8K margin, that's $80K per 10 XSP. For the same notional exposure (2 ES options) the margin is only $60K.

SpottedRetirement1

XSP is good if you want smaller notional and the same tax treatment but the liquidity is spottier than SPX so fills can be a bit more annoying depending on the strike and expiry The margin thing is just how portfolio margin treats the two products because ES is futures and SPX is an index option so the risk array numbers come out different even for the same delta exposure

jbaker_28

Can’t even take a full /ES contract, smh

ericthedisrespectful

/ES bouncing off that 7760 sapport line