Dax Futures

Volatility And Trading Opportunities In The German DAX Futures

One of the lesser known stock market indices is the German DAX. DAX stands for Deutscher Aktienindex. If you are not familiar with the DAX, you may be missing out on some great trading opportunities.

If you jump to about the 23:00 mark in this video (a reply of a live Trading Hangout we held) you will see Brian walkthrough some DAX futures trades he takes:


DAX is the stock index for the German Stock Market, the Deutsche Boerse (DTB). The actual DAX index is calculated during the trading times, which are 8:30AM to 5:15PM Central European Time, and it is based on 30 stocks, including ones you may have heard of like Volkswagen, BMW, Lufthansa, Siemens and Adidas. The DAX futures market has good liquidity, and is estimated to have a daily volume of about 200,000 contracts.

It is traded from 8:00AM to 10:00PM in Europe, which is 2:00AM to 4:00PM Eastern in the United States. DAX futures are traded on the EUREX, which is an electronic exchange you can reach on www.eurexchange.com, under the symbol FDAX.

Our favorite time to trade using exchange time is just after 9am Exchange Time and about an hour before the US floor markets open which would be about 1:30pm Exchange time.

They do have a slightly higher margin requirement than other futures such as the British Pound and Euro on the foreign exchange, the common stock futures for Dow, S&P, etc., and other futures – you need to have about 8,000 Euros deposited in your account to trade the DAX. A DAX Futures Contract is valued at 25 Euros per point, which means that if FDAX is quoted at 5000.0, the value of the contract is 125,000 Euros.

Despite this, you may well find it worthwhile to look into DAX Futures, as they are known to be volatile and thus present good opportunities to the astute trader. The daily price range is about 80 points, so even on day trading you can pick up 30 to 50 points in one move.

Interestingly, and of advantage to the American trader, it’s generally found that the mornings are not so profitable, and that trading during the normal US market times works well.

The German market tends to follow the US markets, so this can help in determining the best plays.

Some traders swear by these futures to the exclusion of everything else.

As with all futures trading, DAX Futures are a leveraged derivative, which means that you can gain a much larger amount with your money than just the simple increase in the index. Futures do have a greater risk, for those who have not done their homework, and for those who misread the signals, so you need to be informed and prepared before entering the trades – but the volatility tends to reward the diligent.

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