AEX Futures – An Exotic Index for Diversification

AEX Futures via CFDs | Diversify Your Portfolio

The AEX Futures is a stock index fund made up of the top companies on the Dutch stock exchange, Euronext Amsterdam. The index was created in 1983 and comprises up to 25 of the most heavily traded shares on the Euronext, which was once known as the Amsterdam Stock Exchange and is considered a national stock index. Other similar national indices include the CAC 40, Dax 40, and MIB 40.

Index Futures Explained

An index future is simply a future contract based on a particular index and some of the well-known indices besides AEX futures that people trade include Dow Jones futures and FTSE futures. Many factors contribute to determining futures contract prices, and similar to other futures contracts, people holding an index futures contract has agreed to purchase the index at a set price on a date that has been chosen and set in the future. If the price of the index has risen higher than the agreed-upon price in the contract, the futures holder has done well while the seller has lost out. Of course, the opposite is true – if the price does not increase beyond the agreed-upon price, then the buyer does not get the advantage and the seller does. 

Stock portfolio managers use index futures such as AEX futures for a variety of investment goals including hedging and trading. In some cases, index futures indicate how the market is leaning.

To measure the profits when trading AEX futures, investors need to calculate the difference between the entry and the exit prices of the contract. Macroeconomic events should also be taken into account to understand the factors that influence the prices. However, traders have to keep in mind that this is a speculative trade with leverage, which is considered to be a very risky type of investments. The prices on the market do not always move as expected. So, if the predictions about price movements are wrong, traders will lose their money.


AEX Index Clarified

The Amsterdam Exchange index is the underlying commodity of AEX futures, and the value of such a futures contract is created by multiplying the current value of the AEX index by 200.

The composition of the index is composed of companies in several sectors including retail, manufacturing, financial services, media, chemicals, publishing, insurance and banking, telecommunications, and consumer goods. Online trading of AEX futures offers diversity to traders and like the other index futures, is a popular option for some investors, including those who trade index future with CFDs, which let traders both long and short the indices.

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The information provided is for educational purposes only and should not be considered investment advice.
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Written by:
Omer Aragón Godínez

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