Trading SPY and DIA for Fun & Profit Message Board

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Strategies & Market Trends : Trading SPY and DIA for Fun & Profit

SPY 679.96

-1.1%

4:00 PM EDT

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To: dmccoach who wrote (117)	6/2/1999 2:09:00 PM
From: James F. Hopkins	Read Replies (1) of 130

Dan; The Spy is a good tool, it tracks the S&P very close, as most of these do, there are times they get off a tad but they quickly come back. They are unit trust the people who create them have to buy all the stocks in whatever index and put the stocks up at the Bank of NY ( i think it is ) any way the stocks are on deposit, before they can get and sell the UT's --------------- Well when the UT's such as spy do get off the index the big players arbitrage them ( scalping a few coins ) but it brings them back in line. Like if the SPY gets low they can redeem their UT's getting the stocks back, if It gets high they put stocks up and create more UT's to sell. ---------------- Being able to trade mid day is the advantage..and say you go into a index Fund such as the WDOWX , (Dow30..) well you have to take closing price on the FUND, also you can run into Transfer fees if you trade the Funds too much..the above is normally NTF and no load but they can charge a $24 TF if you trade it too much. But say you do want to long the DOW30..it's a good fund..and you can hedge off down days by shorting the DIA , which works to the DOW30 like the SPY to the S&P. ----------------- My time limit to get a fund order in is 2pm, EST if I see the index move much after I place the order and it's not in my favor the I can use one of the Spiders to peg it off. Ie ( I want to come out of the Dow30 FUND , on an Up day to get a better NAV ..so at 2pm all looks good and I place the order but the dow starts falling..well instead of just saying crap I jump short the DIA, the close it at the close which in effect fixes my Fund price..( at an extra cost of $12 each way for the short but tahts better than taking a bath. ) There is not much need to try to grab the Spy or such when it's at a small discount..it all happens so fast and with the spread the big boys almost always get taht. Jim

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