The SPX is around 2,000 dollars, so commissions per dollar you want to invest, are very small. I think it costs something like 75 cents per each option plus the regular commission.
To get the same amount of money invested into SPY or DIA, you'd have to pay 20 times more in the extra commissions! Sometimes I end up day trading a couple times. If I break even on a trade it's nice to only have blown 30-40 in commissions instead of over $100.
There is a bit of a spread on the bid/ask, but it's very easy to meet in the middle, and if you end up paying more than the middle price, this difference is very tiny when distributed across the entire option value.
Don't you mean SPX is around $2000 and are you really day trading 25-40 contracts at a time?
ReplyDeleteI corrected the mistake, thanks. If you trade like 2, then you pay like 9 in commission, vs like 20+ if you trade SPY. Then multiply that by 2 because of a buy and a sell.
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