August 13,2024 @07:32 AM
You diligently follow the markets throughout the day, but while you want to trade, your work commitments clash with peak trading hours. The lack of volume during overnight sessions can be discouraging, leading you to believe your trading opportunities are limited.
However, as a firm with clients across various time zones around the globe, EdgeClear provides clients with access to futures on exchanges that are quite liquid and volatile outside the standard 8 am to 4 pm trading window.
I encourage you to check out our Contract Specifications & Margins page to see the most popularly traded products by traders using EdgeClear.
There are many more products than the ones I will discuss, but the four most popular ones that I have encountered are:
- The Nikkei 225, traded on the Osaka Exchange (JPX), as well as its mini and micro counterparts.
- The Stoxx 50 and the Eurobund, both of which trade on the Eurex Exchange.
- Traders access European Allowances (EUAs) directly through the EEX
- Automated Trading Systems to gain exposure to the daytime market movements.
These options allow you to trade on a schedule that suits your needs, providing access to various market environments as they develop.
1. The Nikkei on the Osaka/JPX Exchange
The Nikkei and its Mini and Micro equivalents are among the most liquid and volatile products available for evening trading. With opening hours at 8:45 am JST (6:45 pm CST), which makes it ideal for individuals wanting to trade in the evening.
The Nikkei is an extremely popular and liquid market composed of highly capitalized major Japanese corporations and is Japan’s leading stock index.
The Nikkei has three variations to choose from: the standard Nikkei; the Mini Nikkei; and the Micro Nikkei—each with distinct contract specifications.
Below is a table that highlights the important characteristics of the Nikkei:
| Contract Type | Tick Size | Multiplier | Per Tick Size | Rough Conversion (160 yen/USD) |
| Nikkei (Standard) | 5 Yen | 1000 | 5000 | 31.25/tick |
| Nikkei (Mini) | 5 Yen | 100 | 500 | 3.125/tick |
| Nikkei (Micro) | 5 Yen | 10 | 50 | 0.3125/tick |
Similar to the S&P or US indices the major factors influencing the Nikkei price include economic data, corporate earnings, monetary policy as well as exchange rates, among others. These factors collectively mold market dynamics and influence investor sentiment, in essence driving fluctuations within the Nikkei index.
Most of the economic data releases tend to occur around 6:30 to 9 PM CT. The timing coincides with the prime evening trading hours back here in the US.
“Most major trading platforms support the Nikkei index via the CQG data feed, providing seamless integration for your futures trading strategies. This includes the CQG suite of products, Sierra Charts, and many others. We suggest trading the Nikkei Index via CQG on our advanced, customizable platform, EdgeProX. Traders have access to full-depth data for just $29 per month.”
Contact the EdgeClear team today to learn more about trading the Nikkei and to receive professional assistance tailored to your specific futures trading goals.
2. Eurex Products (Stoxx50 and EuroBund)
An exchange that is active during US early morning and pre-work hours is Eurex, one of the most comprehensive and liquid futures exchanges in the world and a pioneer in electronic trading. Eurex’s two most traded products are the EuroStoxx50 and the EuroBund.
Traders utilize EuroStoxx50 futures, the most liquid product on Eurex, to gain direct exposure to the Eurozone’s largest blue-chip companies. Trading for it begins at 7:15 pm CT, with the majority of their trading hours activity occurring between 1 am CT and 10:30 am CT, according to Eurex.
This timing allows traders to engage with the European markets. The Euro Stoxx 50 contract uses a multiplier of 10 times the index value. This calculation establishes a minimum tick size of €10, which equates to approximately $11 per tick. Similar to the Nikkei, the factors affecting Stoxx50 prices are: economic data, corporate earnings, monetary policy, and exchange rates, among others.
Another Eurex product is the EuroBund, which represents futures on bonds issued by the German government. They are the second most traded product on Eurex. Similarly to the Stoxx50, their opening hours are 7:15 pm CT and most of the overnight volume happens around the hours of 7 PM CST and 11 PM CST.
The Eurobund also has a tick size of €10, or $11 per tick. While the similar factors that affect Nikkei are similar to other indices, the key factors for their debt security are monetary and fiscal policies, inflation expectations, as well as global economic conditions, and more.
Both the Stoxx50 and Eurobund, as well as all Eurex products, are available for trading on Rithmic and CQG. Traders access Eurex products through EdgeProX, Sierra Chart, and a wide variety of other professional trading platforms. Their market data costs make it an affordable exchange to trade on CQG at $19 per month for full depth and on Rithmic at $20 per monthfor full depth.
3. EUAs and Mini EUAs. (ICE Endex)
Traders increasingly utilize European Union Allowances (EUAs) on ICE Endex, driving a recent surge in both trading activity and volume for these established environmental products.
They are futures contracts based on allowances issued by the EU Emissions Trading System, which permits companies to emit specified amounts of carbon. Both hedgers and speculators utilize these contracts to manage exposure or speculate on the future price of one metric ton of carbon emissions.
As a response to market demand, the ICE Endex exchange launched a mini version of the contract this year, which is 1/10 the size of the normal EUA. The trading hours for EUA futures are from 1 am CT to 11 am CT, accommodating early morning trades in the US, evening hours in Asia, and regular business hours in Europe. The tick sizes are €10 for the standard contracts and €1 for the mini contracts.
The factors that influence EUA prices differ slightly from those affecting other financial products, such as the ones previously listed. Major elements include economic activity, energy prices, weather conditions, and regulatory changes regarding emissions within the EU. These variables create a dynamic trading environment in which market participants must remain informed about both global and economic shifts and regulatory developments.
EUAs are available to trade through the data provider CQG with the CQG suite of platforms as well as Sierra Chart.
4. Automated Trading Systems
I know what you’re thinking: at the end of a hard day’s work, you may prefer to sit back and enjoy the evening, but you might feel disappointed that you can’t get exposure to futures, especially in US futures markets like the ES. Fortunately, at EdgeClear, we offer completely autonomous trading systems that handle the ES as well as the MES for you.
Our systems use machine learning algorithms and quantitative data analysis to make data-driven decisions. These systems autonomously take a long or short position during the market open and place targets and stops, aiming to close positions by the end of the trading day.
Unlike traditional funds that are constricted to only long or short positions, our automated systems can go both long and short. This capability allows for positive returns within a variety of market conditions. Having the ability to adjust positions allows you to be positioned to capitalize on market movements.
Additionally, these systems offer preferential tax treatment compared to equities. This advantage, combined with the system’s employed strategies, provide for a unique investment opportunity.
Interested in learning more about our Quant Execution Programs?
Schedule a consultation with our team today!
Conclusion
Ultimately, while these products may differ from what you are accustomed to and may lead to some pushback at first, they offer a compelling alternative for anyone seeking higher liquidity during the evening or early hours. If you are disappointed by the evening volume of typical CME or other US-based products, the aforementioned products may be the solution to your needs.
Before you begin trading, it is important to develop a strong understanding of these products. Be sure you familiarize yourself with the timing of economic data releases and other pertinent information that could affect market volatility and, therefore, risk market movements.
I would say that understanding the factors that make up these products is just as important as the focus and attention that you bring into trading. I also strongly recommend taking the time to research, practice, and gain a stronger understanding of these products in a simulated environment before jumping into live trading.
Having this hands-on experience may help you gain confidence in your trades and deepen your understanding of market dynamics.
Remember, there is no single “right” answer when it comes to trading and there isn’t one product that you must trade exclusively. Having a strong mental edge and being willing to explore different products and their offerings can be beneficial to you towards finding a product that fits with your trading style and preferences.
At EdgeClear, we are here to support you wherever you’re at on your trading journey. Our team utilizes our industry experience, passion, draw to innovation, and relationships to help traders to reach their long-term goals. We encourage you to reach out to us with any question or for guidance on the futures industry and our services—our team’s here to help!
Disclaimer: Derivatives trading involves a substantial risk of loss and is not suitable for all investors. Opinions expressed are solely their own opinions and do not reflect the opinions of EdgeClear.
~ Max Hessling, Commodity Broker
