Active Investor Update
There is also beginning to be a subtle shift towards away from the Spyder Trust (SPY), which is the most popular proxy for trading the broad market, but is not part of the penny pilot, toward the IWM as the vehicle of choice for option traders. Don Kaufman, chief derivatives officer with ThinkorSwim (SWIM ), the online brokerage firm, says since the IWM began in pennies, he has basically stopped trading Spyder options. "Why should I pay a nickel or a dime to buy a large amount of out-of-the money options that I need strictly for hedging or margin when I can them for two cents in the IWM?" Kaufman asks rhetorically.
His point is that index products, which have low volatility and are widely used for hedging or complex strategies, enjoy more contracts traded per average transaction size, higher daily volume and greater open interest than most individual listings, so it makes sense to use the lowest cost and most efficient market. Those pennies can quickly add up.TheStreet Premium Services
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| Dow Jones | S&P 500 | NASDAQ | 10-Year Note |
|
|---|---|---|---|---|
| 12,419.86 | 1,313.32 | 2,837.36 | 16.00 |
Oil *
103.16
|
|
DOWN
160.83 |
DOWN
19.10 |
DOWN
33.63 |
DOWN
0.25 |
10 Yr
1.60%
SPDR Gold
151.91
|
|
-1.28%
|
-1.43%
|
-1.17%
|
-1.54%
|
Data delayed 20 minutes |
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