Dax Futures is one of the most popular futures contracts traded in Europe’s largest stock market, the Deutsche Borse. The Dax Futures contract is a futures contract that allows investors to speculate on the direction of the German stock market index, the DAX. The DAX is made up of the 30 largest and most actively traded stocks in Germany, representing 80% of the total market capitalization of the country’s stock market. Trading Dax Futures provides investors with an efficient way to gain exposure to the German stock market, without having to buy and sell individual stocks.
Dax Futures are traded on the Eurex Exchange, which is one of the world’s largest derivatives exchanges. The Eurex is a regulated exchange, providing investors with a secure and transparent marketplace. The Dax Futures contract is a cash-settled contract, meaning that investors do not have to take delivery of the underlying stocks. Instead, they receive or pay the difference between the opening and closing prices of the contract.
Dax Futures are traded in euro, and the contract size is €25 per point. The minimum price movement is 0.5 points, and the daily trading limit is €2,500 per contract. The contract is settled in cash on the last trading day of each month, and is marked to market every day.
Investors can use Dax Futures to gain exposure to the German stock market, hedge their portfolios, or speculate on the direction of the market. For example, an investor who believes the German stock market will go up can buy a Dax Futures contract and benefit from the increase in the underlying stocks. Similarly, an investor who believes the German stock market will go down can sell a Dax Futures contract and benefit from the decrease in the underlying stocks.
When trading Dax Futures, investors should be aware of the risks involved. The price of the underlying stocks can be volatile, and investors can lose money if the price moves against them. Investors should also be aware that they may be subject to margin calls if their positions become too large or too risky.
In addition to the risks associated with trading Dax Futures, investors should also be aware of the fees and commissions associated with the contract. The Eurex Exchange charges a commission for each trade, and investors should be aware of these fees before entering into a trade.
Overall, Dax Futures provide investors with an efficient and cost-effective way to gain exposure to the German stock market. Investors should understand the risks involved with trading Dax Futures and be aware of the fees and commissions associated with the contract. With a proper understanding of the risks and costs associated with the contract, investors can use Dax Futures to gain exposure to the German stock market and potentially benefit from movements in the underlying stocks.