[cooperthedog]

[quote=Chris Scoreboard Johnston]I should have proofread what I typed before posting it but that is really semantics. They are both vehicles for trading the same thing so it is irrelevant. What you clearly are misinformed on is the practical side of this.

As a professional trader who routinely trades these vehicles side by side I could easily prove through hundreds of actual trades made the relative lack of liquidity and poor fills in the SPY vs the futures. The minimum tick value might be one thing but where the fills actually occur is quite another. I can easily move a 50 lot in the futures without moving the spread at all but no way could you ever trade an equivalent position in the Spiders with the same effect. There was a year where I traded the same trades exactly entered at the market with these two different vehicles at the same time, and there was an over 20% difference in the gain at the end of the year, case closed. Trust me from someone who has done this for 25 years, SPY’s are much less liquid than the futures, especially now in this environment.

Options are the most illiquid choice available, and also have the time value decay problem, but I suppose better than doing nothing at all.[/quote]

You state above that you “routinely trade these vehicles side by side”, but your original post states you don’t trade SPY’s due to liquidity and are unsure of their restrictions. So which is it?

As to being misinformed on the practical side; trading 50 SP lots clearly puts you into an instituitional category (or highly leveraged). Moving the equivalent 100k+ shares (> $10 million) of SPY’s at the market, using the public bid/ask, would definitely affect the execution price and spread, but lets be realistic, moving blocks that large would be done off-exchange on non-quoted block platforms. For the vast majority of individual investors, to which this thread refers to, liquidity in the SPY’s isn’t an issue, in fact you should be able to move at least $200k worth of SPY’s without slippage, more at the open & close.

Another practical matter is the new T+3 short-selling rule. You state that as the reason to only use index futures, yet that rule only applies to naked short selling, which won’t affect individual (or instituitional) investors who have their broker confirm a borrow before shorting.

[cooperthedog]

[quote=Chris Scoreboard Johnston]I should have proofread what I typed before posting it but that is really semantics. They are both vehicles for trading the same thing so it is irrelevant. What you clearly are misinformed on is the practical side of this.

As a professional trader who routinely trades these vehicles side by side I could easily prove through hundreds of actual trades made the relative lack of liquidity and poor fills in the SPY vs the futures. The minimum tick value might be one thing but where the fills actually occur is quite another. I can easily move a 50 lot in the futures without moving the spread at all but no way could you ever trade an equivalent position in the Spiders with the same effect. There was a year where I traded the same trades exactly entered at the market with these two different vehicles at the same time, and there was an over 20% difference in the gain at the end of the year, case closed. Trust me from someone who has done this for 25 years, SPY’s are much less liquid than the futures, especially now in this environment.

Options are the most illiquid choice available, and also have the time value decay problem, but I suppose better than doing nothing at all.[/quote]

You state above that you “routinely trade these vehicles side by side”, but your original post states you don’t trade SPY’s due to liquidity and are unsure of their restrictions. So which is it?

As to being misinformed on the practical side; trading 50 SP lots clearly puts you into an instituitional category (or highly leveraged). Moving the equivalent 100k+ shares (> $10 million) of SPY’s at the market, using the public bid/ask, would definitely affect the execution price and spread, but lets be realistic, moving blocks that large would be done off-exchange on non-quoted block platforms. For the vast majority of individual investors, to which this thread refers to, liquidity in the SPY’s isn’t an issue, in fact you should be able to move at least $200k worth of SPY’s without slippage, more at the open & close.

Another practical matter is the new T+3 short-selling rule. You state that as the reason to only use index futures, yet that rule only applies to naked short selling, which won’t affect individual (or instituitional) investors who have their broker confirm a borrow before shorting.

[cooperthedog]

[quote=Chris Scoreboard Johnston]I should have proofread what I typed before posting it but that is really semantics. They are both vehicles for trading the same thing so it is irrelevant. What you clearly are misinformed on is the practical side of this.

As a professional trader who routinely trades these vehicles side by side I could easily prove through hundreds of actual trades made the relative lack of liquidity and poor fills in the SPY vs the futures. The minimum tick value might be one thing but where the fills actually occur is quite another. I can easily move a 50 lot in the futures without moving the spread at all but no way could you ever trade an equivalent position in the Spiders with the same effect. There was a year where I traded the same trades exactly entered at the market with these two different vehicles at the same time, and there was an over 20% difference in the gain at the end of the year, case closed. Trust me from someone who has done this for 25 years, SPY’s are much less liquid than the futures, especially now in this environment.

Options are the most illiquid choice available, and also have the time value decay problem, but I suppose better than doing nothing at all.[/quote]

You state above that you “routinely trade these vehicles side by side”, but your original post states you don’t trade SPY’s due to liquidity and are unsure of their restrictions. So which is it?

As to being misinformed on the practical side; trading 50 SP lots clearly puts you into an instituitional category (or highly leveraged). Moving the equivalent 100k+ shares (> $10 million) of SPY’s at the market, using the public bid/ask, would definitely affect the execution price and spread, but lets be realistic, moving blocks that large would be done off-exchange on non-quoted block platforms. For the vast majority of individual investors, to which this thread refers to, liquidity in the SPY’s isn’t an issue, in fact you should be able to move at least $200k worth of SPY’s without slippage, more at the open & close.

Another practical matter is the new T+3 short-selling rule. You state that as the reason to only use index futures, yet that rule only applies to naked short selling, which won’t affect individual (or instituitional) investors who have their broker confirm a borrow before shorting.

[cooperthedog]

[quote=Chris Scoreboard Johnston]I should have proofread what I typed before posting it but that is really semantics. They are both vehicles for trading the same thing so it is irrelevant. What you clearly are misinformed on is the practical side of this.

As a professional trader who routinely trades these vehicles side by side I could easily prove through hundreds of actual trades made the relative lack of liquidity and poor fills in the SPY vs the futures. The minimum tick value might be one thing but where the fills actually occur is quite another. I can easily move a 50 lot in the futures without moving the spread at all but no way could you ever trade an equivalent position in the Spiders with the same effect. There was a year where I traded the same trades exactly entered at the market with these two different vehicles at the same time, and there was an over 20% difference in the gain at the end of the year, case closed. Trust me from someone who has done this for 25 years, SPY’s are much less liquid than the futures, especially now in this environment.

Options are the most illiquid choice available, and also have the time value decay problem, but I suppose better than doing nothing at all.[/quote]

You state above that you “routinely trade these vehicles side by side”, but your original post states you don’t trade SPY’s due to liquidity and are unsure of their restrictions. So which is it?

As to being misinformed on the practical side; trading 50 SP lots clearly puts you into an instituitional category (or highly leveraged). Moving the equivalent 100k+ shares (> $10 million) of SPY’s at the market, using the public bid/ask, would definitely affect the execution price and spread, but lets be realistic, moving blocks that large would be done off-exchange on non-quoted block platforms. For the vast majority of individual investors, to which this thread refers to, liquidity in the SPY’s isn’t an issue, in fact you should be able to move at least $200k worth of SPY’s without slippage, more at the open & close.

Another practical matter is the new T+3 short-selling rule. You state that as the reason to only use index futures, yet that rule only applies to naked short selling, which won’t affect individual (or instituitional) investors who have their broker confirm a borrow before shorting.

[cooperthedog]

[quote=Chris Scoreboard Johnston]I should have proofread what I typed before posting it but that is really semantics. They are both vehicles for trading the same thing so it is irrelevant. What you clearly are misinformed on is the practical side of this.

As a professional trader who routinely trades these vehicles side by side I could easily prove through hundreds of actual trades made the relative lack of liquidity and poor fills in the SPY vs the futures. The minimum tick value might be one thing but where the fills actually occur is quite another. I can easily move a 50 lot in the futures without moving the spread at all but no way could you ever trade an equivalent position in the Spiders with the same effect. There was a year where I traded the same trades exactly entered at the market with these two different vehicles at the same time, and there was an over 20% difference in the gain at the end of the year, case closed. Trust me from someone who has done this for 25 years, SPY’s are much less liquid than the futures, especially now in this environment.

Options are the most illiquid choice available, and also have the time value decay problem, but I suppose better than doing nothing at all.[/quote]

You state above that you “routinely trade these vehicles side by side”, but your original post states you don’t trade SPY’s due to liquidity and are unsure of their restrictions. So which is it?

As to being misinformed on the practical side; trading 50 SP lots clearly puts you into an instituitional category (or highly leveraged). Moving the equivalent 100k+ shares (> $10 million) of SPY’s at the market, using the public bid/ask, would definitely affect the execution price and spread, but lets be realistic, moving blocks that large would be done off-exchange on non-quoted block platforms. For the vast majority of individual investors, to which this thread refers to, liquidity in the SPY’s isn’t an issue, in fact you should be able to move at least $200k worth of SPY’s without slippage, more at the open & close.

Another practical matter is the new T+3 short-selling rule. You state that as the reason to only use index futures, yet that rule only applies to naked short selling, which won’t affect individual (or instituitional) investors who have their broker confirm a borrow before shorting.

[cooperthedog]

[quote=asianautica]Are you suggesting that UAW worker won’t get social security? Social security is a tax that I paid into. I can’t negotiate with the government as to how much I want from social security. Pension is not like social security, since I don’t have an option to pay less social security tax and get less social security benefits. However, UAW have an option to reduce the pension cost. If anything, you should compare it to 401k. I do consider company match as income. Although the government doesn’t make me report it as income right now, there’s already talk in Washington to remove tax benefits from 401k. That however, is a whole different story.[/quote]

What I’m trying to point out is that the 150k/$73 per hour average “compensation” number is an accounting fiction. Do you really think that a current UAW worker is receiving a 60K salary and 90K in benefits? Do you think 75K is actually being set aside each year, for each employee’s retirement?

The social security example is as close an analogy as I can think of (not that UAW won’t receive social security), since it is a similar issue for non-UAW workers, in that ss & medicare will be massively underfunded in the future, much like the UAW pensions & health benefits are now.

Imagine 30 years from now the average worker makes 60k a year, plus 15k in benefits (and they pay the same percentage for ss/medicare tax as they do today). Their total compensation is 75k. Now assume that SS/medicare are massively underfunded. There are many more retirees then workers, and the current workforce can’t pay the expected benefits to retirees without raising the FICA/medicare taxes to 100% of your income. So the gov’t (the analogy to GM in this case) states that current workforce “makes” 150k in total compensation (75k in direct wages/benefits and another 75k in “benefits” for legacy costs of former workers). Is this future workers compensation really 150k? Assuming the govt funds the 75k legacy shortfall, will the current worker receive that exact amount as a benefit in the future, or just a small fraction of that amount.

[cooperthedog]

[quote=asianautica]Are you suggesting that UAW worker won’t get social security? Social security is a tax that I paid into. I can’t negotiate with the government as to how much I want from social security. Pension is not like social security, since I don’t have an option to pay less social security tax and get less social security benefits. However, UAW have an option to reduce the pension cost. If anything, you should compare it to 401k. I do consider company match as income. Although the government doesn’t make me report it as income right now, there’s already talk in Washington to remove tax benefits from 401k. That however, is a whole different story.[/quote]

What I’m trying to point out is that the 150k/$73 per hour average “compensation” number is an accounting fiction. Do you really think that a current UAW worker is receiving a 60K salary and 90K in benefits? Do you think 75K is actually being set aside each year, for each employee’s retirement?

The social security example is as close an analogy as I can think of (not that UAW won’t receive social security), since it is a similar issue for non-UAW workers, in that ss & medicare will be massively underfunded in the future, much like the UAW pensions & health benefits are now.

Imagine 30 years from now the average worker makes 60k a year, plus 15k in benefits (and they pay the same percentage for ss/medicare tax as they do today). Their total compensation is 75k. Now assume that SS/medicare are massively underfunded. There are many more retirees then workers, and the current workforce can’t pay the expected benefits to retirees without raising the FICA/medicare taxes to 100% of your income. So the gov’t (the analogy to GM in this case) states that current workforce “makes” 150k in total compensation (75k in direct wages/benefits and another 75k in “benefits” for legacy costs of former workers). Is this future workers compensation really 150k? Assuming the govt funds the 75k legacy shortfall, will the current worker receive that exact amount as a benefit in the future, or just a small fraction of that amount.

[cooperthedog]

[quote=asianautica]Are you suggesting that UAW worker won’t get social security? Social security is a tax that I paid into. I can’t negotiate with the government as to how much I want from social security. Pension is not like social security, since I don’t have an option to pay less social security tax and get less social security benefits. However, UAW have an option to reduce the pension cost. If anything, you should compare it to 401k. I do consider company match as income. Although the government doesn’t make me report it as income right now, there’s already talk in Washington to remove tax benefits from 401k. That however, is a whole different story.[/quote]

What I’m trying to point out is that the 150k/$73 per hour average “compensation” number is an accounting fiction. Do you really think that a current UAW worker is receiving a 60K salary and 90K in benefits? Do you think 75K is actually being set aside each year, for each employee’s retirement?

The social security example is as close an analogy as I can think of (not that UAW won’t receive social security), since it is a similar issue for non-UAW workers, in that ss & medicare will be massively underfunded in the future, much like the UAW pensions & health benefits are now.

Imagine 30 years from now the average worker makes 60k a year, plus 15k in benefits (and they pay the same percentage for ss/medicare tax as they do today). Their total compensation is 75k. Now assume that SS/medicare are massively underfunded. There are many more retirees then workers, and the current workforce can’t pay the expected benefits to retirees without raising the FICA/medicare taxes to 100% of your income. So the gov’t (the analogy to GM in this case) states that current workforce “makes” 150k in total compensation (75k in direct wages/benefits and another 75k in “benefits” for legacy costs of former workers). Is this future workers compensation really 150k? Assuming the govt funds the 75k legacy shortfall, will the current worker receive that exact amount as a benefit in the future, or just a small fraction of that amount.

[cooperthedog]

[quote=asianautica]Are you suggesting that UAW worker won’t get social security? Social security is a tax that I paid into. I can’t negotiate with the government as to how much I want from social security. Pension is not like social security, since I don’t have an option to pay less social security tax and get less social security benefits. However, UAW have an option to reduce the pension cost. If anything, you should compare it to 401k. I do consider company match as income. Although the government doesn’t make me report it as income right now, there’s already talk in Washington to remove tax benefits from 401k. That however, is a whole different story.[/quote]

What I’m trying to point out is that the 150k/$73 per hour average “compensation” number is an accounting fiction. Do you really think that a current UAW worker is receiving a 60K salary and 90K in benefits? Do you think 75K is actually being set aside each year, for each employee’s retirement?

The social security example is as close an analogy as I can think of (not that UAW won’t receive social security), since it is a similar issue for non-UAW workers, in that ss & medicare will be massively underfunded in the future, much like the UAW pensions & health benefits are now.

Imagine 30 years from now the average worker makes 60k a year, plus 15k in benefits (and they pay the same percentage for ss/medicare tax as they do today). Their total compensation is 75k. Now assume that SS/medicare are massively underfunded. There are many more retirees then workers, and the current workforce can’t pay the expected benefits to retirees without raising the FICA/medicare taxes to 100% of your income. So the gov’t (the analogy to GM in this case) states that current workforce “makes” 150k in total compensation (75k in direct wages/benefits and another 75k in “benefits” for legacy costs of former workers). Is this future workers compensation really 150k? Assuming the govt funds the 75k legacy shortfall, will the current worker receive that exact amount as a benefit in the future, or just a small fraction of that amount.

[cooperthedog]

[quote=asianautica]Are you suggesting that UAW worker won’t get social security? Social security is a tax that I paid into. I can’t negotiate with the government as to how much I want from social security. Pension is not like social security, since I don’t have an option to pay less social security tax and get less social security benefits. However, UAW have an option to reduce the pension cost. If anything, you should compare it to 401k. I do consider company match as income. Although the government doesn’t make me report it as income right now, there’s already talk in Washington to remove tax benefits from 401k. That however, is a whole different story.[/quote]

What I’m trying to point out is that the 150k/$73 per hour average “compensation” number is an accounting fiction. Do you really think that a current UAW worker is receiving a 60K salary and 90K in benefits? Do you think 75K is actually being set aside each year, for each employee’s retirement?

The social security example is as close an analogy as I can think of (not that UAW won’t receive social security), since it is a similar issue for non-UAW workers, in that ss & medicare will be massively underfunded in the future, much like the UAW pensions & health benefits are now.

Imagine 30 years from now the average worker makes 60k a year, plus 15k in benefits (and they pay the same percentage for ss/medicare tax as they do today). Their total compensation is 75k. Now assume that SS/medicare are massively underfunded. There are many more retirees then workers, and the current workforce can’t pay the expected benefits to retirees without raising the FICA/medicare taxes to 100% of your income. So the gov’t (the analogy to GM in this case) states that current workforce “makes” 150k in total compensation (75k in direct wages/benefits and another 75k in “benefits” for legacy costs of former workers). Is this future workers compensation really 150k? Assuming the govt funds the 75k legacy shortfall, will the current worker receive that exact amount as a benefit in the future, or just a small fraction of that amount.

[cooperthedog]

[quote=asianautica]The way I see it is, they get paid $60k in cash, $15k (your #) in current benefit, but $75k in benefit they’ll receive when they retire themselves. My question is, why draw a hard line in the sand when negotiating w/ a company that is on the verge of bankruptcy?[/quote]

So, do you count your future social security benefits in your reported income? If you make 60k, do you say you actually make 100k, due to the benefit you’ll receive when you retire? Will you increase your “total” income when social security has its inevitable shortfall? Under this logic, the bigger the social security deficit, the more you make…

As to the UAW not negotiating, I agree, its their funeral. If they were wise, the UAW would’ve required these retiree benefits be funded and set in a trust. Hindsights always 20/20.

[cooperthedog]

[quote=asianautica]The way I see it is, they get paid $60k in cash, $15k (your #) in current benefit, but $75k in benefit they’ll receive when they retire themselves. My question is, why draw a hard line in the sand when negotiating w/ a company that is on the verge of bankruptcy?[/quote]

So, do you count your future social security benefits in your reported income? If you make 60k, do you say you actually make 100k, due to the benefit you’ll receive when you retire? Will you increase your “total” income when social security has its inevitable shortfall? Under this logic, the bigger the social security deficit, the more you make…

As to the UAW not negotiating, I agree, its their funeral. If they were wise, the UAW would’ve required these retiree benefits be funded and set in a trust. Hindsights always 20/20.

[cooperthedog]

[quote=asianautica]The way I see it is, they get paid $60k in cash, $15k (your #) in current benefit, but $75k in benefit they’ll receive when they retire themselves. My question is, why draw a hard line in the sand when negotiating w/ a company that is on the verge of bankruptcy?[/quote]

So, do you count your future social security benefits in your reported income? If you make 60k, do you say you actually make 100k, due to the benefit you’ll receive when you retire? Will you increase your “total” income when social security has its inevitable shortfall? Under this logic, the bigger the social security deficit, the more you make…

As to the UAW not negotiating, I agree, its their funeral. If they were wise, the UAW would’ve required these retiree benefits be funded and set in a trust. Hindsights always 20/20.

[cooperthedog]

[quote=asianautica]The way I see it is, they get paid $60k in cash, $15k (your #) in current benefit, but $75k in benefit they’ll receive when they retire themselves. My question is, why draw a hard line in the sand when negotiating w/ a company that is on the verge of bankruptcy?[/quote]

So, do you count your future social security benefits in your reported income? If you make 60k, do you say you actually make 100k, due to the benefit you’ll receive when you retire? Will you increase your “total” income when social security has its inevitable shortfall? Under this logic, the bigger the social security deficit, the more you make…

As to the UAW not negotiating, I agree, its their funeral. If they were wise, the UAW would’ve required these retiree benefits be funded and set in a trust. Hindsights always 20/20.

[cooperthedog]

[quote=asianautica]The way I see it is, they get paid $60k in cash, $15k (your #) in current benefit, but $75k in benefit they’ll receive when they retire themselves. My question is, why draw a hard line in the sand when negotiating w/ a company that is on the verge of bankruptcy?[/quote]

So, do you count your future social security benefits in your reported income? If you make 60k, do you say you actually make 100k, due to the benefit you’ll receive when you retire? Will you increase your “total” income when social security has its inevitable shortfall? Under this logic, the bigger the social security deficit, the more you make…

As to the UAW not negotiating, I agree, its their funeral. If they were wise, the UAW would’ve required these retiree benefits be funded and set in a trust. Hindsights always 20/20.

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