Indices

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mcginty

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Hi everyone,
This is probably a really stupid question but I've got different answers from a couple of people I've asked already so I'm a bit confused.
I'm interested in starting off betting on indices and I've opened an account with Finspreads. They have 4 different options for SP500:
US SP 500 DFT (1364.6/1365)
US SP 500 Daily Future Monday spread (no prices)
US SP 500 Sept 12 spread (1358/ 1358.6)
US SP 500 Dec 12 spread (1352/1352.6)
None of these match the SP500 close yesterday which was 1362.16.
So which one of the above should I be betting on?
Cheers,
Keith
 
Depends on your preferred / projected time frame for your positions that allows you to monitor them adequately while realistically expecting to make a profit from the majority of them.

So, if you never intend to hold overnight, you could go with the Daily: this shows prices during the Fins trading hours. It's still not exactly the same as the uderlying index but it's very close. Remember you're not betting on the index itself, you're trading a Fins SB market derived from the index. Positions are closed automatically at the end of the session.

DFT positions are rolled over into the next day and there is normally a small daily charge for this. This continues indefinitely.

The monthlies roll over like DFT but they automatically close on the set date of expiry in the month specified. There is no rolling charge per session but you will see the prices quoted this far out from expiry are significantly different from the underlying index, which makes the job of making a profit tricky.

Most traders find the shorter the time frame, the harder it is to make a profit from SB. Generally, roll-over daily charges are not high individually but eventually make very long-term positions expensive.
 
Hi Keith

Its a good question as it can be confusing.

tomorton has discribed it well would add a few points.

Firstly you have chosen a good index to trade as the futures quote is based on the es which is the main index traded by "serious" futures traders and you often get reactions at key areas of support pivots ect much more than say the Dow imo.

An advantage with city/fins is you can trade very small stakes on the spx/es which I would strongly recommend if you have not traded them before.

US SP 500 DFT (1364.6/1365) = Based on the spx cash (personally would not bother with this as the future is the one to trade)

US SP 500 Daily Future Monday spread (no prices)= based on the spx FUTURE known as the " es" with slightly lower spraed than the monthly below.(you will see prices when it opens)

US SP 500 Sept 12 spread (1358/ 1358.6)= as above but higher spread as its not a daily and diffrent rollover

US SP 500 Dec 12 spread (1352/1352.6)= not currently the forward month ie the main month traded which has the greatest volume.
 
tomorton said:
Depends on your preferred / projected time frame for your positions that allows you to monitor them adequately while realistically expecting to make a profit from the majority of them.

So, if you never intend to hold overnight, you could go with the Daily: this shows prices during the Fins trading hours. It's still not exactly the same as the uderlying index but it's very close. Remember you're not betting on the index itself, you're trading a Fins SB market derived from the index. Positions are closed automatically at the end of the session.

DFT positions are rolled over into the next day and there is normally a small daily charge for this. This continues indefinitely.

The monthlies roll over like DFT but they automatically close on the set date of expiry in the month specified. There is no rolling charge per session but you will see the prices quoted this far out from expiry are significantly different from the underlying index, which makes the job of making a profit tricky.

Most traders find the shorter the time frame, the harder it is to make a profit from SB. Generally, roll-over daily charges are not high individually but eventually make very long-term positions expensive.
Click to expand...

Hi Tom,

Thanks for your really thorough response.

I'm not looking at daily purely because I have a day job and I'm trying to learn SB by night.

So I guess this leaves me with the DFT? Which seems to be fairly close to the actual index so I presume I can base my bets on the SPX on my charting software?

Cheers,

Keith
 
tim3 said:
Hi Keith

Its a good question as it can be confusing.

tomorton has discribed it well would add a few points.

Firstly you have chosen a good index to trade as the futures quote is based on the es which is the main index traded by "serious" futures traders and you often get reactions at key areas of support pivots ect much more than say the Dow imo.

An advantage with city/fins is you can trade very small stakes on the spx/es which I would strongly recommend if you have not traded them before.

US SP 500 DFT (1364.6/1365) = Based on the spx cash (personally would not bother with this as the future is the one to trade)

US SP 500 Daily Future Monday spread (no prices)= based on the spx FUTURE known as the " es" with slightly lower spraed than the monthly below.(you will see prices when it opens)

US SP 500 Sept 12 spread (1358/ 1358.6)= as above but higher spread as its not a daily and diffrent rollover

US SP 500 Dec 12 spread (1352/1352.6)= not currently the forward month ie the main month traded which has the greatest volume.
Click to expand...

Hi Tim,

Many thanks for you excellent response too.

Having read Tom's response, i don't think I'm in a position to bet on the daily as I'm looking a bit longer term than that?

Out of interest, how would I find the SPX ES on my charting software (Stockcharts)?

Cheers,

Keith
 
Yes Keith, that's what I would do if trading S&P. But allow for the minor differences between the index and the SB quote, the spread is an important error between the two - don't forget Fins charts show the mid-price between their buy and sell quotes, and that their spread could expand and contract: it's so annoying when you find you've been stopped out of a good position in the early hours just because of the spread.
 
tomorton said:
Yes Keith, that's what I would do if trading S&P. But allow for the minor differences between the index and the SB quote, the spread is an important error between the two - don't forget Fins charts show the mid-price between their buy and sell quotes, and that their spread could expand and contract: it's so annoying when you find you've been stopped out of a good position in the early hours just because of the spread.
Click to expand...

Thanks Tom.
 
regarding Brokers I would recommend focusing more on more getting your money back than worrying about the spread

N
 
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