No man is an island

Frequently this type of question comes up from the newer folks:

When I trade the QQQQ the bid/ask spread is typically .05, but when I look at SPX/NDX/RUT the bid/ask spread is quoted in whole dollar, why would anyone trade the larger indices?

"A 3pt move in the NDX or MNX is quite a different story as a 3pt move in the QQQQ" an experienced trader once related to me. "You have to compare apples to apples, in relative terms". Lets see how.

The table values were constructed using after hour quotes as of the close on Friday 11/10/06. Basically comparing apples to apples in % terms.

Also consider transaction costs. If u had a set amount of say $5000 blocks to deploy in the Nasdaq index, how many commissions would you have to pay using the Qs? How many commissions would you have to pay using the MNX or NDX?

Amen for ISE challenging CBOE for their proprietary products to be multi-listed. See full article here.

I remember the week NDX went from trading on CBOE only to trading on multiple exchanges and the spread dropped by 2/3.

When is someone gonna sue PHLX for XAU to be opened up ;-)

Just as No man is an island, entire of itself; every man is a piece of the continent, a part of the main, no options exchange can be on its own for every long ;-)