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New underlying for Mini Futures: the Nasdaq 100 index

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Vontobel Markets
4 Aug 2023 | 3 min read
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With mini futures, you can leverage the performance of the underlying asset with a small capital investment. You can invest in either a rising or falling market. Now it is also possible with a new underlying: the Nasdaq 100 index.

What are Mini Futures?

Mini Futures are exchange-traded products that allow you to participate in the price increase or decrease of a specific underlying asset. They have no pre-defined maturity date (open-end) and mature automatically when the Stop Loss level (“Barrier”) is reached, at which point trading in the product ends. Mini Futures allow you to invest either in the underlying asset: 

  • A rise in value (Mini Futures Long)
  • A fall in value (Mini Futures Short)

How does leverage work?

Leverage allows disproportionate participation in the performance of the underlying asset with a small capital investment. As an investor, you pay only a small part of the price of the underlying and Vontobel, as the issuer, funds the rest. The pricing is very transparent and can be calculated directly from the value of the underlying. The so-called 'strike' is the part of the underlying that is financed by the issuer. The financing level (strike) is paid interest for the investment period and is reviewed daily. The intrinsic value of a Mini Future can be calculated as the difference between the price of the underlying and the strike.

The leverage is easily calculated by dividing the value of the underlying by the value of the Mini Future. Leverage changes with changes in the value of the underlying, as the amount of leverage is based on the difference between the underlying and the financing level:

  • Mini Futures long: the higher the financing level or strike is compared to the value of the underlying asset, the greater the leverage of the product is. In other words, as the value of the underlying asset falls, leverage increases.

  • Mini Futures Short: The higher the value of the underlying asset is compared to the financing level or strike, the higher the leverage of the product is. In other words, as the value of the underlying increases, the leverage increases. 

Higher leverage = higher risk

As an investor, you can choose the level of risk you want to take. In our product range, you can find products in the same underlying with several different risk levels and choose which one suits your investment plan.

Stop-Loss

An important part of Mini Futures is the stop-loss level (stop-loss barrier). If the underlying asset reaches this level, the Mini Future will automatically expire, allowing investors to be repaid any redemption amount depending on the performance of the underlying asset. In many cases, it is the difference between the stop-loss level and the strike, taking into account the ratio and possible exchange rate. In some cases, the product may expire worthless due to market conditions (market risk and liquidity risk). A total loss of the invested capital is therefore possible. The stop-loss level is usually adjusted on a monthly basis. 

The product can only be knocked when the underlying market is open. For example, Nasdaq can be knocked between 16:30 and 23:15 in local time depending on the time difference. However, some underlying assets such as Bitcoin can knock around the clock, as the underlying asset can be traded around the clock. If you are not sure whether a product has reached its stop loss level, you can always check it on our product-specific website. You can find the product by entering either the product name or the ISIN number in the search box.

New underlying for Mini Futures: the Nasdaq 100 index

The Nasdaq 100 is one of the three most followed stock market indices in the US. It consists of the largest non-financial companies listed on Nasdaq. Stock weights are based on their market values, but the weight of the largest companies in the index has recently grown so large that a special rebalancing was made to the index last week. 

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The Nasdaq index has been on a tremendous upward trend since the beginning of the year and is already up more than 40% (YTD). We are now in the middle of the hottest reporting season and some of the big companies have already published their interim reports. Tesla and NVIDIA already earlier, Alphabet (Google), Microsoft and Meta (Facebook) last week, and Apple and Amazon will publish them next week.

The AI race is heating up and the results have spoken for themselves but whether or not the rise will continue cannot be predicted. The companies' revenues so far have exceeded their expectations. Microsoft share is up 38%, Alphabet 45%, Meta 150%, Tesla 136% and NVIDIA 220% since the beginning of the year until end of July. Now you, as an investor, can also participate in the development of the Nasdaq index with Mini Futures – Long or Short, depending on your market view. 

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This information is neither an investment advice nor an investment or investment strategy recommendation, but advertisement. The complete information on the trading products (securities) mentioned herein, in particular the structure and risks associated with an investment, are described in the base prospectus, together with any supplements, as well as the final terms. The base prospectus and final terms constitute the solely binding sales documents for the securities and are available under the product links. It is recommended that potential investors read these documents before making any investment decision. The documents and the key information document are published on the website of the issuer, Vontobel Financial Products GmbH, Bockenheimer Landstrasse 24, 60323 Frankfurt am Main, Germany, on prospectus.vontobel.com and are available from the issuer free of charge. The approval of the prospectus should not be understood as an endorsement of the securities. The securities are products that are not simple and may be difficult to understand. This information includes or relates to figures of past performance. Past performance is not a reliable indicator of future performance.


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Please read this information before continuing, as products and services contained on this website are not accessible to certain persons. Of importance are the respective prospectuses which are attainable from the issuer: Vontobel Financial Products GmbH, Bockenheimer Landstrasse 24, DE-60323 Frankfurt am Main, Germany, as well as from this website.