Last Updated on 17 November, 2020 by Samuelsson
The OMXS30 futures contract tracks the OMX Stockholm 30 index (OMXS30) and consists of the 30 largest stocks in Sweden.
Advantages of OMXS30 Futures
The OMXS30 futures contract come with the same advantages as other futures markets. Futures are useful for traders or investors who want to hedge against price movements, but also for those who wish to alter their portfolio allocation through leverage. Here we have listed some more advantages of trading the OMXS30 futures contract:
Low Costs – By trading the OMXS30 futures contract, you get significant market exposure through leverage, at a low cost.
Long History – The OMXS30 futures market has a long history and is one of the most traded futures contracts of the Nordic indexes.
Currency Risk – OMXS30 futures are denoted in SEK, which means that foreign investors get to spread their currency risks by having a position in the OMXS30 futures.
OMX Stockholm Market Index (OMXS30)
OMXS30 is a market index based on the 30 largest stocks in Sweden. The OMXS30 is a so-called market capitalization index, which means that the weight that is given to each stock is proportionate to the size of the stock.
The OMXS30 is rearranged in January and July each year. For there not to be an excessive turnaround in the index, a stock that meets the market capitalization criterion must also belong to the 15 most traded stocks to be included in the OMXS30. The same rule applies to shares that do not meet the market capitalization criterion. For a stock to be excluded from the OMXS30, it must have a trading volume that is lower than the 45 most traded stocks in the exchange.
Reasons to Trade OMXS30 Futures
The OMxS30 index market is the most popular index market when compared to its Nordic competitor. Here are some more general advantages that apply to futures markets.
Leverage is one of the main benefits of futures and enables investors and traders to make gains from the smallest of price movements. Typically, the initial margin is set to around 3-12% of the total contract value.
With their large size relative to market exposure, futures contracts are cost-effective options for traders and investors.
You May Go Short
Futures enable investors and traders to switch between long and short positions effortlessly. This is not always the case with other securities. For example, in some countries, short sellers of stocks always need to place their orders one tick above the last traded price. That is not the case with futures.
You can read more about the benefits of trading futures in our post on the topic.
Trading strategies come in many forms and shapes. However, there is market behavior that applies to many markets.
One such market logic is mean reversion. Mean reversion is the tendency of a market to revert to its mean when it has moved excessively in one direction. Traders may use this tendency to go long when the market is oversold and go short when it is overbought. However, for index markets like the OMXS30, we recommend focussing on going long. The long term positive bias of index markets tends to favor long signals more than short signals.
if you are interested in edges and strategies for the OMX Market, have a look at our collection of edges and strategies for a wide range of markets!
Where to Find Price Data
You can find the chart of the OMXs30 index here.
If you wish to load data into your trading platform, you will have to choose an external data provider. E-signal offers data for the OMXS30 futures market.
Where to Trade OMXS30 Futures
Not all brokers offer European markets.
However, with Interactive Brokers (IB) you can trade markets worldwide, including European markets.
You can find more info about futures market here.