SP500 ETF recommendations please

[joesxm3]

I would like to allocate to the SP500 with the possibility of selling covered calls against my position.

Would SPY be the way to go, or is there something better I should consider?

Thanks.

 

[aja8888]

Spy...no need to get complicated.

 

[chassis]

SPY

 

[joesxm3]

Thanks. That's what I thought but I figured to double check.

 

[NW-Bound]

Spurred by the OP's question, I looked at SPY and VOO.

VOO is larger than SPY, at $753B vs. $455B. However, SPY is more popular among trader, as evidenced by the daily trading volume of $34B against $2.4B.

That's huge! The daily trading volume is 7.5% for SPY against 0.3% for VOO.

And I also looked at the option trading activity for both ETFs. Again, SPY shows a much larger base of traders, with a lot more options outstanding.

Still, the trading volume of VOO is high enough that the liquidity is still good.

 

[COcheesehead]

IVV, lower expenses than SPY.

 

[silvor]

VOO is 3x cheaper.

SPY has (almost) daily options.

I guess figure what’s more important to you.

 

[Optionality]

Not sure what options you want to sell, but if they are actual SPY options, you want to have actual SPY as that they have physical delivery. In other words, if your call gets exercised, you are supposed to deliver SPY, not VOO or cash. I would not recommend trading VOO options as they are very illiquid compared to SPY, and the costs associated with that are much higher than the measly difference in fees.


There _are_ alternatives if you want to get really fancy.

 

[silvor]

I wouldn’t call VOO options illiquid at all.

 

[Optionality]

If I pull up Yahoo Finance, the relative spread is at least 10 times that of SPY. True, you can do the volume, but the cost is a lot higher.

 

[pb4uski]

Not sure what options you want to sell, but if they are actual SPY options, you want to have actual SPY as that they have physical delivery. In other words, if your call gets exercised, you are supposed to deliver SPY, not VOO or cash. I would not recommend trading VOO options as they are very illiquid compared to SPY, and the costs associated with that are much higher than the measly difference in fees.


There _are_ alternatives if you want to get really fancy.

Makes sense... and I own some Dec 2023 SPY LEAP call options.

However, I'd prefer to own LEAP calls on a broader index... something akin to VOO... but I have yet to find a broader domestic stock ETF with traded options that go out to late 2023. For example, options available on ITOT, VT! and SCHB only go out to mid 2022.

Thoughts?