Equity index represents the performance of the basket/universe of stocks that fulfill a certain criteria.
In Europe, there several important equity indexes that reflex the performance of the European equity markets.
Through equity index derivatives traded on the Eurex exchange, traders can express their trade ideas and conviction on these indexes.
#1 STOXX Indexes
The derivatives from STOXX include indexes that cover blue-chip. board-based, and sector-specific derivatives indexes.
The STOXX indexes are not closely correlated to the North American and Asian equity market, making them a good choice for diversification.
Key futures products include:
(a) EURO STOXX 50 Index Futures (FESX)
The FESX is derived from the EURO STOXX 50, which tracks the performance of Eurozone's 50 largest companies (by free-float market cap) among the 20 supersectors.
The top 10 components, sector, and country weighing of EURO STOXX 50 index as of October 2024:
(b) STOXX Europe 600 Index Futures (FXXP)
The FXXP allows traders to gain exposure to the STOXX Europe 600, which is a broad-based index of the European equity market.
With 600 component companies, the STOXX Europe 600 provides coverage across 17 countries and 11 industries within Europe's developed economies, representing close to 90% of the underlying investable market.
The top 10 components, sector, and country weighing of STOXX Europe 600 index as of October 2024:
(c) EURO STOXX Banks Index Futures (FESB)
The FESB is derived from the EURO STOXX banks index, which tracks the largest banks in the Eurozone by free-float market cap.
The top 10 components of STOXX Europe 600 index as of October 2024:
#2 Dax Futures (FDAX)
The FDAX is derived from Dax, the blue-chip index for the German stock market, one of Europe's most efficient stock market.
The Dax tracks the performance of the 40 largest and most actively traded German companies.
By trading the FDAX, traders will gain exposure to top German stocks such ask Allianz, Volkswagen, Adidas, and Deutsche Bank.
The top 10 components, sector, and country weighing of the DAX as of October 2024:
#3 FTSE 100 Index Indexes (FTUK)
The FTUK is derived from the Financial Times Stock Exchange (FTSE) 100 Index, which tracks the performance of the top 100 companies listed on the London Stock Exchange with the highest market cap.
The top 10 components of FTSE 100 Index by market cap (as of 11/12/2024)
#4 MSCI Indexes
MSCI indexes produce some of the world most widely tracked benchmarks, with 166 MSCI futures available covering countries from Emerging Markets and Developed Markets.
(a) Developed Market derivative indexes
Example of MSCI's developed market index are the MSCI World Index, MSCI indexes from European countries, MSCI USA Index, and MSCI Japan Index.
Example: MSCI Germany Index Futures (FMGY)
The FMGY tracks the MSCI Germany Index measure the performance of the large and mid cap segments of the German market. With 56 constituents, the index covers about 85% of the equity universe in Germany.
(b) Emerging Market derivative indexes
Example of MSCI's emerging market index are the MSCI Malaysia Index, MSCI Philippines Index, and MSCI Indonesia Index.
Example: MSCI Malaysia Index Futures (FMMY)
The FMMY tracks the MSCI Malaysia Index measure the performance of the large and mid cap segments of the Malaysia market. With 33 constituents, the index covers about 85% of the equity universe in Malaysia.
Verdict: Explore the exciting equities index derivatives market in Europe!
In this post, we've see the exciting offering of the equities index derivative market in the Eurex exchange.
I hope this is helpful and hopefully opens up potentially new market for you as a trader!
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Disclaimers
Any of the information above is produced with my own best effort and research.
This post is produced purely for sharing purposes and should not be taken as a buy/sell recommendation. Past return is not indicative of future performance. Please seek advice from a licensed financial planner before making any financial decisions.
Leverage is a financial tool that comes with its advantages and risks. Please learn and understand both the upsides and downsides of leverage before using it for trading.
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