Micro-DAX Index futures from the Eurex Exchange are smaller sized stock index futures contracts based on the most popular stock indices in Europe. Traders now have the ability to trade micro-sized contracts on the key stock index market in Germany using Micro-DAX Index futures.
What is the DAX Index?
The DAX Index is the leading stock market index for Germany, first published in 1988. It consists of 30 blue-chip companies that are listed on the Frankfurt Stock Exchange. The DAX Index is a market capitalization-weighted index, which means the companies with larger market caps will have a greater weight on the index. Although there are only 30 stocks in the DAX Index, they represent approximately 80% of the total market cap in Germany. Some of the top companies in the DAX Index include well-known firms such as Allianz, Bayer, BMW, Daimler, and SAP, Siemens, and Volkswagen.
What are DAX Futures?
First introduced in 1990, DAX futures (ticker symbol: FDAX) allow investors worldwide to trade one of the most popular European equity indexes with all the benefits of futures trading. The DAX futures contract size is 25 euros multiplied by the index value.
As the value of the DAX increased and FDAX contracts grew more expensive, Eurex launched Mini DAX futures (ticker symbol: FDXM) in 2015. Mini DAX futures contracts are valued at 5 euros multiplied by the index, making it 1/5th the size of a full FDAX contract.
What Are Micro-DAX futures?
Micro-DAX Index futures are a smaller version of the popular liquid DAX Index futures. The Micro-DAX futures contract size is 1 euro multiplied by the index value, while the DAX Index futures contract size is 25 euros multiplied by the value of the index, making Micro-DAX futures 1/25th the size of DAX futures.
For example, if the index level of the DAX is 15,450:
- Micro-DAX futures: 1 euro * 15,450 index level = EUR 15,450 notional
- DAX futures: 25 euro * 15,450 index level = EUR 386,250 notional value
- To observe in U.S. dollars (USD), if the USD/EUR rate is about 1.20, then the notional value of Micro-DAX futures in USD is about $12,875.
Why Trade Micro-DAX Futures?
Launched on April 19, 2021 by Eurex, Micro-DAX futures allow traders to participate in the German stock market with a significantly reduced financial commitment. The contract size of Micro-DAX futures is 1 euro,* making the contracts ideal instruments for traders who want to gain exposure to the major German stock market with less capital.
Micro-DAX Futures Benefits
- Cost-efficient Products: Micro contracts, with their small size and low margin requirements, are the ideal trading instrument for global investors with smaller-sized portfolios.
- Trade Both Sides of the Market with Ease: Traders can speculate on the DAX Index both on the long and short side with no uptick rule or short selling restrictions.
- Trade Nearly Around the Clock: Micro-DAX futures traders can participate in the market nearly 21 hours a day, 5 days a week. This empowers futures traders to quickly react to economic announcements and political news, providing both convenience and peace of mind.
- Trade on a Centralized Marketplace: Micro-DAX futures are traded on the Eurex platform on a single central limit order book, which means all traders see the same price, bid, offer, and size at the same time. Additionally, these contracts clear at the Eurex Clearinghouse.
- Leverage Your Capital: Micro-DAX futures offer leverage, and futures buying power enables traders to control a notional contract value with a relatively smaller amount of capital.
- Trade Highly-Liquid Markets: Eurex futures markets trade on a single central limit order book with many participants, including liquidity providers, to provide liquid and active markets. Since Micro-DAX futures are based on the same indices and Eurex’s standard contracts that are already highly liquid, the Micro contracts benefit from spread trading and arbitrage and have access to this large liquidity pool.
Micro-DAX Futures Contract Specs
- Exchange: EUREX
- Class: Futures
- Trading Symbol: FDXS
- Contract Size: 1 Euro * DAX Index
- Pricing Unit: Euro
- Tick Size: 1.00 index point
- Tick Value: 1.00 Euro
- Intraday Margin: $100
- Contract Months: First 3 quarterly months
- Trading Hours: 1:10am to 10:00pm CET (Central European Time)
- Initial Margins: $1,183
- Position Limit: 25
Key Economic Reports and News That Can Impact Micro-DAX Index Futures
Several economic reports are released each week that can trigger price moves in Micro-DAX Index futures. Economic and political news that impact global interest rates and foreign exchange rates may also impact futures prices.
- European Central Bank (ECB) meetings: The ECB holds monetary policy meetings every six weeks and sets its benchmark refinancing rate and deposit rate at these meetings. Changes in the rates or even in guidance can impact many markets and expectations of interest rates, foreign exchange rates, and inflation, which may also impact prices of Micro-DAX futures.
- Consumer Price Index (CPI): Released each month by major countries in the Eurozone, this report measures inflation and cost-of-living changes that can impact asset prices, including Micro-DAX futures.
- Government spending and budget deficits: Trends in government spending and budget deficits, along with increasing monetization of debt, may impact the value of assets, including Micro-DAX futures.
- World political events: Major political news may impact the value of interest rates, currencies, and asset prices, including Micro-DAX.
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