Euro Stoxx Day Trading

Written by Jacey Harmon
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In 1998 a group of businesses, including Dow Jones and SBF, formed Stoxx LTD. The goal of the new venture was to provide the world with equity based indexes that properly represent the European stock markets. They also wanted to create a base that different exchanges could create derivative products such as futures and exchange traded funds that investors could use to speculate and hedge.

There are a wide variety of indexes available under the Stoxx name. They are broken down into four main groups: total market, size, style, and sector indexes. Total market indexes, also known as TMI, are intended to cover 95 percent of the free float capitalization of the European stock universe. Size indexes are based on the size of a company such as large, mid or small cap. Style indexes are based upon style of investments, like growth, value or mixed. Sector indexes are indexes based on sectors of the market, such as energy or information technology.

Trading Stoxx Indexes

The Eurex exchange is the leading European market that trades Stoxx index derivatives. These include exchange traded funds and futures for the main Stoxx indexes. The Eurex exchange offers futures and exchange traded funds for the Euro Stoxx 50, Euro Stoxx 600 and Euro Stoxx indexes. Investors can day trade, swing trade or invest in the Stoxx indexes through the Eurex exchange.

An American may not be as familiar with European stock markets as with U.S. based exchanges. The theory is exactly the same--you want to sell at a higher price than what you paid. Since the goal is the same, many of the same theories apply to trading European stocks that apply to U.S. stocks. A Stoxx trader must utilize fundamental and technical analysis as well as follow important news related to the Euro markets. The Internet has created a tremendous opportunity for people around the world to capitalize on the various stock markets around the world.


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