DAX Futures Through Interactive Brokers

A

AmericanEalge1989

Hi,

I have been trading stocks, funds, and ETFs for about 5 years. I am now testing the waters with the futures market.

Does anybody know why on Interactive Brokers when I input like if I want to buy 1 future contract of DAX, it shows me a value of about 50k€ while it shows me a value of about 5k€ if I want to buy 1 future contract of CAC40?

Cheers,
Alex
 
AmericanEalge1989 said:
Hi,

I have been trading stocks, funds, and ETFs for about 5 years. I am now testing the waters with the futures market.

Does anybody know why on Interactive Brokers when I input like if I want to buy 1 future contract of DAX, it shows me a value of about 50k€ while it shows me a value of about 5k€ if I want to buy 1 future contract of CAC40?

Cheers,
Alex
More...
contracts are not uniform, each one has their own current value, 1 Dax is worth more than 1 CAC, if you want to spread them you will need to compute your chosen ratio
 
@ ETCallHome: Thank you. I find it really weird that you cannot invest in the DAX future if you dont want to invest at least 50 k€... I thought that either I was making a mistake somewhere or that there was some kind of bug.

@ Chubbly: Yes. Thank you for the input. I was aware of the existence of such products. However, I didnt know it was only launched on 28 October 2015.
 
A dax contract cost 25€ with a tick size of 0,5. So 12,5€ of tick value.
Where the mini Dax cost 5€, has a tick size of 1, therefore a tick value of 5€.

Usually your cost is the tick value + Commission (Roundturn) + Margin (Which is temporary)

Dax is offered by Eurex.
http://www.eurexchange.com/exchange-en/products/idx/dax/DAX--Futures/17206

While the Cac future is offered by Euronext.
https://derivatives.euronext.com/en/products/index-futures/FCE-DPAR/contract-specification

Brokers ask for higher a margin for Dax than Cac.
Because Dax is the most volatile Index future in the European Family.

Most European Index will share the same shape.
I mean if you can't invest in the Dax. You could "follow" it with another.
For exemple, the Cac or the Stoxx, because they're highly correlated.
Furthermore, you can leverage a lot with the Stoxx.
Because it's highly liquide. Contrary to the Dax.
Which can explain its volatility.

Here you've got the information provided by IB on Fdax (Dax futures)
https://misc.interactivebrokers.com...x.php?action=Details&site=GEN&conid=206931709
 
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@ K-Pia: Thank you. After discussing with Interactive Brokers, they told me that what I was seeing as the "Amount" on the Preview Order window (aka the 50k€) was the notional value. They added that this information is pretty much useless. Then I ask myself, why do they show this info on the Preview Order window if it is useless?? Finally, when I asked them how can I see which amount is to be taken out of my cash to fund the DAX future investment, they replied that it is the Intitial Margin. Maybe I am confused and mistaken but I find it hard to believe.
 
Hi Ealge :-)

right now the FDAX is at 9842 points. The regular FDAX contract has a point value of 25 EUR, so the notional value of the FDAX is 9842 x 25 EUR = 246,050 EUR.

This value basically shows you how much capital you control/ move with one FDAX contract. As you can see the value of the FDAX is pretty high, compared to other index futures. This means you control lots of capital. Also, the FDAX is a very volatile contract. These days we have intraday ranges of at least 100-200 points, which means that with just one FDAX contract your risk capital might fluctuate about 2500 to 5000 EUR per session if you just hold from session opening to close. Lots of movement means lots of chance for profits, but also high risk for losses.

Because of this risk, the margin for the FDAX is pretty high. The initial margin set by Eurex today for the FDAX is 18,482.50.
http://www.eurexchange.com/blob/235...5/data/MarginParametersEstimationCircular.xls

Interactive Brokers wants at least this initial margin on your account for each FDAX contract you trade, to have the insurance that you are able to cover potential losses.
https://www.interactivebrokers.com/en/index.php?f=margin&p=fut

For daytrading, Interactive Brokers will usually ask for just half of the initial margin, so in case of the FDAX you would need then about 9200 EUR in your account.

For the new miniDAX contract it is very similar, the main difference is that it moves in full points and not in half points like the large FDAX. And each point in the miniDAX is only 5 EUR, so only 1/5 of the large contract.

If you want to trade a smaller contract that moves almost 1:1 with the DAX you might also try the FESX, the EuroStoxx50 Futures. These 2 contracts are highly correlated and you can monitor the FDAX and execute on the FESX, as long as you dont want to do VERY shortterm scalping. Then other factors might come into play.

Hope this helps a bit.

Greetings,
CALLumbus
 
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