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Mini FDAX - FDXM from Eurex
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Mini FDAX - FDXM from Eurex

  #1 (permalink)
Market Wizard
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Mini FDAX - FDXM from Eurex

Rumors condense that the Eurex will start a Mini FDAX contract.

In the meantime, there are several German sources that cite it, so it might be true.

There are lots of reasons that would militate for FDAX minis:
  • 20-35k margin for the full-sized FDAX
  • massively shrunken volume during the last 5 years
  • bad liquidity of the full-sized FDAX (e.g. an order of 5 contracts regularly causes slippage and partial fills)
  • setting incentives esp. for private investors to trade (German) futures
  • etc. etc.

At the moment, the following specs are discussed:
  • 5 per point (instead of 25 per point for the full-sized FDAX)
  • margin about 1/5 of the full-sized contract
  • tick size 1p (instead of 0.5p for the full-sized contract)

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  #3 (permalink)
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Close to a Eurex statement:

Today, the Boersen-Zeitung, which is the official publication organ of all German securities exchanges,
publishes a short story on page 1. Not much too add to yesterday except one news:
According to the Boersen-Zeitung, the Mini FDAX could already start in October (!).

Link to the story (German):
https://www.boersen-zeitung.de/index.php?li=300&artid=2015187006


Last edited by choke35; September 30th, 2015 at 03:57 AM.
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Here is the original statement from EUREX.

Eurex - Eurex expands equity index derivatives segment

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So what will change and what's the advantage for the trader ? I don't see anything except generating fees for the exchange. Can't support the margin argument. Volume is down on all exchanges/contracts except CL. Slippage will be slightly eased only. If someone used to trade 1 contract, he now trades 5 contracts. If one participant pulled 1 contract the other participant wanted to trade, it will be the same with 5 contracts. The argument to take the CFD/Certificate traders from their market I can't support either. It's just a help for the market makers and algo fuzzies. If you can push the miniFDAX with 1 contract in the FDAX on 0.5 move in and out you lose 12.50 EUR in the FDAX and will win 25EUR in the miniFDAX for these guys. Because they will stay on both sides and the miniFDAX will be the pussy of the FDAX. At least one will always jump on the pushes and fill both sides.


Last edited by gboos; October 1st, 2015 at 04:03 AM.
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I'm agree with gboos in most cases.For real players FDax still will be better.For smaller retail investors mini will be no attractive too- CFD on FDax are still much better then this becouse most of CFD privider's got all cost's at only 1 point.So pay more for less ? No - it will probably only take few player's from the big one but it will not add ,,new'' traders.
It will be like new Kospi 200 mini - volume will be at 10 % of Fdax volume (after few months).If they wont to make real change then they should just change tick of actual FDax - but it could be too revolutionary so they dont wont to risk ...

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gboos View Post
So what will change and what's the advantage for the trader ? I don't see anything except generating fees for the exchange. Can't support the margin argument. Volume is down on all exchanges/contracts except CL. Slippage will be slightly eased only. If someone used to trade 1 contract, he now trades 5 contracts. If one participant pulled 1 contract the other participant wanted to trade, it will be the same with 5 contracts. The argument to take the CFD/Certificate traders from their market I can't support either. It's just a help for the market makers and algo fuzzies. If you can push the miniFDAX with 1 contract in the FDAX on 0.5 move in and out you lose 12.50 EUR in the FDAX and will win 25EUR in the miniFDAX for these guys. Because they will stay on both sides and the miniFDAX will be the pussy of the FDAX. At least one will always jump on the pushes and fill both sides.

Sure: Exchanges want to make money. What's wrong with that?
Also sure: There are HFTs out there. If you're a scalper, try to rub noses with them. Good luck.

But: Have you ever compared the intransparency and (hidden) costs of (F)DAX CFDs/Certificates/Warrants
to a DMA trader's FDAX transparency and cost structure? Did you manage to get any quotes at all from the
respective issuers of the non-DMA instruments on days like 8/24? And if so: How far from DMA were they?

If the Eurex doesn't screw it up, I expect similar effects as in the US with the ES and other E-minis.
In the US, the mini asset class changed the entire market dynamics: Liquidity is much higher, spreads
are lower, RM/MM possibilities are better, and transparency is higher than they have ever been with full-sized
contracts (and more transparent than those of CFDs/Certs/Warrants anyway).

That's the real benefit for traders.

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Do not compare the time the Emini S&P's, NQ's etc raised up. This is a totally different story !! At this time there were no CFD's, no certificates, not other now very common leverage products. The 'Big's' died because the floor died. While the 'big's' are dead, the volume in the 'mini's is still decreasing since 2009.

As a typical intra-day certificate trader, why should i move to the miniFDAX ? A lot of these buying cert's close to knockout-barriers with huge leverage, but (!!!) fixed amount of risk without (!!!) slippage on the executed knockout etc. They do not care about 'hidden' costs. Does decreasing tick-size raise volume in equities ? Does decreasing tick-size pretend us from vola ? I guess main intra-day trader like vola.

I heard one argument from the EUREX are the traders who changed from the FDAX to the FESX ... I doubt that. It's just easier to hedge/spread a market with 1/2 ratio instead of 2/5 ratio (like current between FDAX/FESX). So it comes all to the institutional demands only.

Btw, if you don't 'get it' in the FDAX today, you won't get it in the miniFDAX as well. For a scalper it's even more worse then the FDAX. Look at the scalper in the FESX. They are gone. Just gone.

EDIT: syntax only


Last edited by gboos; October 1st, 2015 at 06:24 AM.
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gboos View Post
Do not compare the time the Emini S&P's, NQ's etc raised up. This is a totally different story !! At this time there were no CFD's, no certificates, not other now very common leverage products. The 'Big's' died because the floor died. While the 'big's' are dead, the volume in the 'mini's is still decreasing since 2009.

As a typical intra-day certificate trader, why should i move to the miniFDAX ? A lot of these buying cert's close to knockout-barriers with huge leverage, but (!!!) fixed amount of risk without (!!!) slippage on the executed knockout etc. They do not care about 'hidden' costs. Does decreasing tick-size raise volume in equities ? Does decreasing tick-size pretend us from vola ? I guess main intra-day trader like vola.

I heard one argument from the EUREX are the traders who changed from the FDAX to the FESX ... I doubt that. It's just easier to hedge/spread a market with 1/2 ratio instead of 2/5 ration (like current between FDAX/FESX). So it come all to the institutional demands.

Btw, if you don't 'get it' in the FDAX today, you won't get it in the eminiFDAX as well. For a scalper it's even more worse then the FDAX. Look at the scalper in the FESX. They are gone. Just gone.

I'd never try to convince the non-DMA/CFDs/Certs/Warrants buy side

Over the years I've traded my way up to futures.
My personal summary is: non-DMA assets are fine for learning with small change (plus for some special situations,
e.g. mitigating RM/MM effects when margins of DMA assets go up by 50% for several days like in August). And exactly
such is the non-DMA order and customer structure that is reported by the issuers - penny-ante stuff. Order sizes and half-life
periods show, that 90% of non-DMA asset traders wouldn't be off worse buying a lottery ticket in the morning.
Fixed amount of risk, end foreseeable.

For the rest, it's good for learning - not for earning, since costs of non-DMA assets are multiples of those of DMA markets -
esp for frequent traders and regardless of whether you pay it cut into pieces or mostly upfront (or how do you think the issuers
of knock-out products make their money ).

As soon as your trading is stable - i.e. at least break-even plus some - and you can afford an adequate RM/MM,
I'd suggest to switch to DMA markets and assets. And among these I don't know of any asset class that
is more liquid, more efficient, and more transparent than futures.

P.S.: In that sense I give a warm welcome to a mini FDAX that (potentially) extends these competitive advantages.


Last edited by choke35; October 1st, 2015 at 07:06 PM.
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Your personal preference doesn't count. There is no serious argument current CFD's/Certificate traders should move to the miniFDAX. For overnight traders, I see even less arguments, because the margin doesn't count and it's a huge disadvantage to the CFD's/Certificates with a risk-overload on the 'futures' side ...

Commission wise where do you want to see a miniFDAX compared to the (at least) 2.00EUR round-turn on the FDAX one on one ? What amount would be attractive for you to move from FDAX to miniFDAX ? Please specifiy ....

Please specify your theoretical Bid/Ask-Risk of the miniFDAX compared to the FDAX and come to a conclusion who will get ..... in the miniFDAX.

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