Inventory merchants, traders, and hedgers have lengthy identified the worth of inventory index futures. Merchants can entry exposures to a complete nation’s fairness markets or a particular sector inside it by way of numerous inventory index futures benchmarks.
Simply as an investor can entry the broad U.S. market by way of numerous iterations of the S&P 500 futures, the most important blue chip shares by way of the Dow Jones futures, or the expertise sector by way of the Nasdaq 100, market individuals can entry many European and international fairness benchmarks by way of Eurex’s household of inventory index futures.
Eurex is the main European derivatives change and clearing agency. It affords market liquidity, effectivity, and integrity by offering clients with progressive options to seamlessly handle danger. By way of its derivatives change and clearing arm, Eurex has pioneered merchandise and infrastructures, providing a broad vary of worldwide benchmark merchandise and that includes open and low-cost digital entry.
Eurex Indexes
Eurex affords an all-encompassing suite of worldwide, regional, and thematic inventory indexes that allow merchants to diversify their investments or acquire further publicity to particular areas of their portfolio. With its built-in clearing, cross-margining, and a large pool of merchandise and liquidity, Eurex affords a single level of entry right into a sea of liquidity, offering operational and monetary effectivity. Eurex’s benchmark indexes are among the many most liquid exchange-traded derivatives and entice a worldwide community of market individuals.
These indexes embrace the next merchandise and product households.
DAX® futures
The DAX® Inventory Index represents Germany’s largest 40 shares. Eurex affords the DAX® Index Futures (FDAX), a Mini-DAX® (FDXM) that’s one-fifth the dimensions of the massive contract, and a Micro-DAX® (FDXS) that’s one-fifth the dimensions of the Mini.
Along with futures and choices on the DAX® with numerous danger thresholds, Eurex affords futures on its mid-cap index (MDAX). The index tracks the efficiency of the 50 shares that observe DAX® firms when it comes to dimension or that aren’t eligible for DAX® inclusion. The Mini MDAX futures (FSMX) have a tick worth of €1, so it’s extra aligned with the Micro-DAX® than the Mini.
Retail merchants can hedge publicity to mid-cap firms or make a wager on the mid-cap sector versus giant caps by spreading the FSMX with the FDXS.
Eurex additionally affords futures on its TecDAX Index, which incorporates the 30 largest firms categorized as belonging to the “expertise” sector and that fulfill minimal high quality necessities. The tick worth of the TecDAX futures (FTDX) is €5. Merchants can entry the expertise sector or cut up that sector off (or double up) by buying and selling it versus the Mini or Micro-DAX®. Eurex additionally affords futures on its sustainability index DAX® 50 ESG.
EURO STOXX 50®
The EURO STOXX 50® is an index of the most important 50 shares within the Eurozone, and the EURO STOXX 50® Futures (FESX) is the Eurozone’s benchmark inventory index.
The EURO STOXX 50® Index Quanto Futures (FESQ) is an identical to the extremely liquid EURO STOXX 50 Index Futures (FESX), with the exception that it trades in U.S. {dollars}. Each contracts expire at the very same index stage on the third Friday of March, June, September, or December.
Eurex has launched Micro EURO STOXX 50® futures that commerce at 1/20 the gearing of the massive contract (see specs under).
The STOXX® Europe 50 Index Futures (FSTX) is a contract primarily based on an index of the most important 50 firms in Europe. This index included firms primarily based in the UK.
The EURO STOXX 50® ex Financials Index Futures (FEXF) follows the identical protocols because the EURO STOXX 50® however excludes monetary sector shares.
Eurex additionally lists 23 separate sector-specific index futures.
Contract values and worth gradations:
| Contract | Contract Worth | Minimal worth | Change |
|---|---|---|---|
| Factors | Worth | ||
| EURO STOXX 50® Index Futures | EUR 10 | 1 | EUR 10 |
| Micro EURO STOXX 50® Index Futures | EUR 10 | 0.5 | EUR 5 |
| EURO STOXX 50® Index Quanto Futures | USD 10 | 1 | USD 10 |
| EURO STOXX 50® ex Financials Index Futures | EUR 10 | 0.5 | EUR 5 |
| STOXX® Europe 50 Index Futures | EUR 10 | 1 | EUR 10 |
FTSE 100 Product Suite
Eurex lists futures on FTSE 100 Index (FTUK). The FTSE 100 is a inventory index of the most important shares listed on the London Inventory Trade primarily based on market capitalization. It additionally lists futures on a declared dividend FTSE 100 Index (FTDD) and the FTSE 100 Whole Return Index (TTUK).
MSCI Indexes
MSCI indexes are a few of the world’s most generally tracked benchmarks and linked to greater than $16.3 trillion in belongings underneath administration. The indexes additionally function the idea for over 1,300 Trade Traded Funds (ETFs). The huge quantity of capital benchmarked towards MSCI indexes and the improved tradability of index-based merchandise through ETFs has led to an elevated want for futures and choices. MSCI derivatives assist managers facilitate in and outflows of funds, hedge present fairness publicity, and improve portfolio efficiency.
Eurex is the one change providing a complete suite of merchandise consisting of futures and choices on regional and nation indexes. Presently, 160 MSCI futures and 32 MSCI choices can be found, protecting rising and developed markets in several index varieties and totally different currencies (EUR, USD, GBP, and JPY).
Buying and selling Liquid Markets
Though the universe of index futures provided by way of Eurex is extraordinarily broad, the core markets appropriate to retail merchants embrace the Mini and Micro-DAX® suites of merchandise in addition to the Micro-EURO STOXX 50®. Extra subtle merchants can look into the FTSE merchandise and the sector-specific EURO STOXX futures.
“These are all super merchandise,” says Dan Gramza, President of Gramza Capital Administration, who’s a dealer and guide to home and worldwide shoppers. “They really present the chance to diversify publicity outdoors of america.”
A key to using these merchandise—each when it comes to market traits and in relation to their impression on U.S. markets—is figuring out when these merchandise lead or lag the U.S. market, in accordance with Gramza. “The quantity of lead or lag can present a novel alternative for commerce entry. The lead or lag may be outlined when it comes to magnitude of change in addition to time,” Gramza says. “The buying and selling methods that you’d make the most of for U.S. home indexes can apply to those markets. The rationale for that is, on the whole, these markets are likely to observe the identical rhythm which suggests indicators which might be getting used on U.S. home indexes may also work on these European merchandise.”
In fact, buying and selling Euro-based monetary markets means you will need to perceive the elemental elements and financial experiences that can have an effect on these markets.
Anybody buying and selling U.S. monetary markets understands the significance of figuring out when main financial experiences are launched. The U.S. employment scenario report, GDP, and Shopper Value Index all could cause main disruptions in U.S. primarily based inventory indexes or Treasury futures. That is notably true for short-term day or swing merchants who’re much less in a position to stand up to a short-term volatility spike. These merchants ought to most likely be flat going into these experiences. Even longer-term merchants have to know the market expectations of those experiences to handle their trades.
Anybody buying and selling any of those euro-based inventory indexes must familiarize themselves with the German- and European-based indicators that may have an effect on markets. The StoneX calendar is an effective useful resource for vital occasions that might impression DAX® and Euro Stoxx futures or any market you might be buying and selling.
Eurex affords a broad and liquid group of inventory indexes that gives alternatives to create alpha and diversify your buying and selling. Gramza notes that the most effective time to commerce the DAX® and EURO STOXX 50® is usually through the first two hours of the Eurex buying and selling session and the final two hours as a result of each durations typically provide the best liquidity and volatility.
