What is the DAX Exchange?
The DAX Exchange is the German equivalent of the Dow. It is a capitalization-weighted index comprising the 30 Largest German companies within the Prime Standard listed at the Frankfurt Stock Exchange (FWB®), in terms of order book volume and market capitalization. It is based on prices generated in the electronic trading system XETRA®. The DAX® is a performance / total return index, it is assumed that all dividends and cash distributions are re-invested into the index.
I've seen many traders who normally trade 10 YM or 10 ES lots, which are interchangeable, jump in the DAX Exchange and also trade 10 lots. They heard it was like the Dow, because it has a similar trading range to the Dow, and it's made up of 30 big stocks like the Dow, so they go ahead and use a 20 point stop--just like they would on the Dow. When their stop is hit, they thought they should only have lost $1,000 but it ends up being $6,500 on the DAX Exchange. The bottom line is that the DAX Exchange has large contracts. It trades in a similar range as the YM, but instead of $5.00 a point, the DAX Exchange worth 25 euros a point. The DAX Exchange trades from 2:00 a.m. until 1:00 p.m. EST in the winter. With daylight savings that changes from 3:00 a.m. until 2:00 p.m. EST. To get quotes on this contract, you have to sign up for Eurex with your data feed, which runs about $9.00 a month.
What are the DAX Exchange contract specifications?
- The symbol for the Dax Exchange is FDAX.
- The Contract Value is 1 point = 25 Euros.
- EURUSD exchange rate is currently 1.35
- 25 Euros x 1.35 = $33.75 USD per point
- Moves in ½ point increments, or 12.50 Euros
- 12.50 Euros x 1.35 = $16.875 USD per tick
- Contract Months: Quarterly like ES, YM: March, June, September and December
- Trading Hours: 12:50 AM to 3:00 PM Central
What else should I know about trading the DAX Exchange?
The DAX is a big contract, worth $225,000 USD. This compares with the emini at about $72,000 USD and the big S&P at $369,000 USD. Trading One Dax Exchange contract is like trading 3 Eminis. The DAX Enchange requires overnight margin of 12,900 Euros, or $17,415 USD. The DAX intraday margin for day trading is around $2,000 to $5,000 USD per contract. Please Note: Decreased Margin = Increased Risk.
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