Hacker News Reader

Hacker News

Comment by MuffinFlavored | Hacker News Reader

Parent Full thread

MuffinFlavored

Slightly related: what are "big players" more likely to do to get exposure to the S&P directionally:

1. SPY shares long/short on margin/leverage

1. SPY options

1. SPX options

1. /ES e-mini futures

1. a blend of all

Does one trump another in popularity?

View on HN

it's usually front month ES, depending on volume. And MES for smaller accounts.

I'd love to talk to you more. I tried to make a Mastodon account to reach you. I just have questions about how you might know this/what else I could learn from you. I don't trade or anything like that, just interested in learning if you'd like to chat more.

I don't trade, either. I just code custom data collection, quantity allocation, future roll and automated execution algorithms for certified trading advisors.

ES trumps the others.

Nice, thanks. I wonder by how much. Here is why I ask:

a lot of technical analysis is done on psychological levels related to (in my opinion) SPY strike prices/SPX strike prices/SPX levels.

Yet, /ES is typically 20 points ahead of SPX. For example, there can be a battle zone of support/resistance at 4900 on SPX, but /ES blew past it a day ago. I wasn't sure if one had more power/prominence than the other.

The spread between SPX and ES is purely mechanical. It’s a function of expected future interest rates and dividends over the remaining life of the future.

There is no such thing as support/resistance in reality.

> There is no such thing as support/resistance in reality.

Where would you say 80% of the daily trade volume comes from on average?

The powers to be that I can think of:

institutional investors / fund managers slowly reallocating (selling stuff off, buying stuff) daily

high frequency trading algorithms trading shares back and forth to each other in an artificial way to generate synthetic volume/movement

market makers reacting to option chain volume to remain neutral

"hedge funds" / "quant funds" running their algorithm

what do those algorithms look for at the "minute by minute" scale if not things like support/resistance/patterns/volume?

In my experience a large % of the daily trade volume comes from me.

Reply on news.ycombinator.com