What are Micro-DAX Index Futures?

By NinjaTrader

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 can 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 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 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 SAP, Siemens, Allianz, Volkswagen, Daimler, BMW and Bayer.

What are DAX Futures?

A futures contract is an obligation to buy or sell a commodity at or before a given date in the future, at a price agreed upon today.

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. 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 liquid and popular 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 the 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 US Dollars, 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, the Micro DAX futures allow traders to participate in the German stock market with a significantly reduced financial commitment. The Micro-sized contracts are identical to the standard DAX futures except for the contract size.

The contract size of the Micro DAX futures is 1 Euro * making the contracts ideal instruments for those who wish to gain exposure to the major German stock market with less capital.

Micro-DAX® Futures offer traders the opportunity to trade both on the long side and the short side of the market. These contracts are listed on the Eurex Exchange alongside other popular futures and options. The trading hours are 1:10am to 10:00pm CET (Central European Time).

Micro-DAX® contracts trade on the Eurex electronic system on a central limit order book (“CLOB”), meaning all traders see the same bid, offer, price and size at the same time. These contracts clear at the Eurex Clearinghouse. The smaller contract size of Micro-DAX® Futures offers a significant benefit for traders and allows for accessing popular markets with a smaller capital commitment.

Micro-DAX® Futures Benefits

  • Cost-efficient Products – Micro contracts with its small contract 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 additional opportunity 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 you 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 in order to provide liquid and active markets. Since Micro DAX futures are based on the same indices and Eurex’s standard contracts which are already highly liquid, the Micro contracts will benefit from spread trading and arbitrage and will 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 Which Can Impact Micro DAX Index Futures

Several economic reports are released each week which can trigger price moves in Micro DAX futures. Additionally, economic and political news which 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. The ECB sets its benchmark refinancing rate and its deposit rate at these monetary policy meetings. Changes in these rates or even changes 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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