About Nikkei 225 Futures
The Nikkei 225 is the most widely-quoted index of Tokyo’s stock exchange. The index is composed of 225 Japanese companies from various industries, including Toyota, Mitsubishi and Panasonic.
Like the Dow Jones index, the Nikkei 225 is a price-weighted index where larger companies influence the value of the index more than smaller companies.
As many of these companies are export-based, the index offers you an opportunity to gain simultaneous exposure to both Japan’s economy and global markets.
For persons interested in gaining exposure to this index through a futures contract, CME Group has three options:
- Nikkei 225 denominated in U.S. dollars (NKD)
- E-Mini Nikkei 225 denominated in yen (ENY)
- Nikkei 225 denominated in yen (NIY)
Of these three contracts, the Nikkei 225 denominated in yen (NIY) currently has the most active marketplace, followed by NKD and then ENY.
The minimum fluctuation on the both the USD and yen Nikkei 225 contracts is 5.00 index points. The minimum fluctuation on the E-Mini Nikkei 225 is 10 index points. All three contracts are traded electronically, six days a week, 23 hours per day, with a daily 60-minute break at 4 p.m. Central Time.
Market participants taking a stake in any of the futures contracts in the Nikkei 225 index should keep a close eye on all global economic developments in the U.S. and Japan.
The Nikkei is known for rising the day after a rally in the Dow, or falling on days subsequent to a slide in the DJIA.
Due to these known trends, market participants trading NKD, ENY or NIY often trade during the first hour of Tokyo’s trading day in order to profit from the prior day’s trends.
Peter Knight Advisor