Basic Points

• ES is the most-traded index futures product, and represents the S&P 500.
• As a futures contract, the market prices each month for ES differently, with each usually a bit higher than the month before.
• Futures can be bought or sold at any time, and do not need to wait until their date before they are closed. They trade like stocks, but are available from Sunday night to Friday night. 

Intermediate: Using SpotGamma for ES Analysis

As a new feature for March 2023, ES data is being added for models and HIRO. 

Select ES charting platforms are also guided by our cloud notes. These show what ES levels correspond to the strongest combined OI levels on SPY and SPX (with combo 1s being the strongest). Being able to compare notional values like this is essential for being able to monitor the S&P 500 simultaneously from the perspective of the futures, index, and main ETF.

Advanced: Use Cases for ES

First, there is the micro version of ES which goes by MES. This is 10x smaller, with its options being worth half of SPY. Meanwhile, ES is five times the size of SPY (notionally). But it is only half of SPX, which represents the S&P 500. Since SPX only has options, ES is the main tool for institutions to hedge SPX with, which makes its flows of particular interest. 

ES and most other futures are traded on the Chicago Mercantile Exchange (CME) and designed to provide traders with leveraged exposure to the US stock market without needing to purchase any of the underlying stocks directly. ES can be traded to help diversify, hedge, or increase directional risk on a portfolio. Neutral option strategies on ES can also be used to trade volatility, however ES is often much less liquid than SPY or SPX, and so the stability of its bid/ask spread and implied volatility levels is less trustworthy. 

As something special for futures, ES has the additional benefit of how options with the same strike and date can have limit orders to buy and sell at the same time, which is not allowed for equity or index options.