Stock Index
| |
|
|
|
| Symbol |
SPY |
ES |
VFNIX |
Margin
requirements per $10K/notional value |
$5,000 |
$3,000 |
$10,000 |
| Commission |
Yes |
Yes |
No |
| $Value of 1 ticket ($10 K base) |
$.79 |
$12.50 |
$.86 |
| Advantages |
1) Allows one trade access to a fully diversified basket of S&P stocks
2) Very Low
transaction costs (bid/ask spread is 1 penny)
3) Tremendous liquidity
|
1) Lower margin requirements
2) Access to
electronic platform that trades after hours
3) Instant
Execution
|
1) Extremely low transaction costs (18 basis point) |
| Disadvantages |
1) High Margin Requirements and interest rate costs
2) Liquidity low outside market hours
3) Need up tick to short
|
1) High Leverage provides large risk per tick |
1) No leverage at all
2) No short selling
|
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