Premium difference between SPX and S&P Mini (ES) option premiums

Brennen81

Junior member
33 0
Hello,

A moment ago, both the SPX and S&P mini (ES) are at prices that match (extremely close) to at the money strikes for their options chains. If I bring up both the ATM put and call for each contract for the same expiry day, the ES premiums are nearly identical, which makes sense. But the SPX puts are way more expensive than their calls.

Why are they this way? Both are European settled.

Thanks for any help.

B
 

econbizer

Junior member
23 0
is there room for a riskless profit?

one reason could be the minis cater to retail n caters nowhere near what instis need. higher demand on spx puts as insurance by instis/funds may be the cause of this difference in pricing.

a bigger premium on puts over calls is usual, as downside volatility is crazier than upside vol.
 

ikicker

Junior member
10 0
Have you noticed that SPY option calls are trading at a discount recently as well? And the puts are trading at a premium...

I think that is because some investors are anticipating a correction in February. That is what my model spit out in November last year.
 

kalott

Established member
682 59
maybe they are afraid that something happens to trump, but that would only give a flash crash before ppt starts buying

and the ewt-guys are searching for a major top (neely and the others)
 

mb325

Well-known member
473 87
I don't know the reason for difference in price between SPX and ES, but typically with indices puts will be more expensive than calls as they're in higher demand due to people buying them as downside protection when long stocks.
 

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