I have a working (swing) trading strategy based on equity index futures in place. I enter and exit by giving market orders. The strategy generates roughly 40 trades per instrument per year.

I want to diversify my risk by using it for a couple of different markets.

Presently I am looking at the Nikkei 225 futures. In Interactive Brokers I can see several different contracts:

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I sorted this overview by the volume (in USD) as offered by Interactive Brokers.

I am unsure which of these instruments / exchanges I should take.

Some aspects I presently know are:

  1. take a market that is liquid enough to get reasonable market order prices
  2. take 'mini' contracts if the instrument is else-wise equivalent to an instrument with a bigger multiplier
  3. if possible: reduce the amount of roll-overs (just as a means to reduce risk)

Which other aspects should I consider?

Which market volume might be sufficient to get most the times (during liquid hours) an acceptable price when using market orders?

Extra remark: I live and spend my money in the EUR currency area.


4 Answers 4


Choice of Contracts

Having traded Nikkei 225 futures, you usually have three choices for futures contracts:

  • JPY-denominated contracts (full or mini) traded on JPX (historically, the Osaka Exchange, hence the OSE above);
  • JPY-denominated contracts (full or mini) traded on the SGX (historically SIMEX, the first Nikkei 225 index futures); or,
  • USD- (full) or JPY-denominated (full or mini) contracts traded on the CME.


During Asian hours, the SGX contracts have often been more liquid -- though index arbitrageurs keep both liquid and JPX has pushed to take back market share. Outside of Asian hours, the CME contracts are often the most liquid -- and are generally liquid enough that I have seen traders use the CME contracts if they need to hedge outside of Asian hours.

You express some concern about rolling contracts; however, there is usually far lower liquidity in the next contract. Thus unless the roll is very expensive, it typically makes sense to only hold the front month contract and then roll to the next front month near expiry. (When to roll could be a whole other post.)

Mutual Offsetting

There is an additional benefit to SGX and CME JPY-denominated contracts: they are mutually offset. Thus you can enter a trade on one exchange and exit it on the other exchange. That's a strong advantage compared to the JPX contracts.


As for sizing, the mini contracts on SGX/CME are not the most liquid (unlike for S&P 500 contracts); rather, the full-size contracts are more liquid.

PKO Issues

You should also be aware that the Japanese government is rumored to keep a few illiquid stocks in the Nikkei 225 and has rarely used those to help prop up the index via Price Keeping Operations (PKO). You can read a bit about the PKO here.

Other Related Contracts

Finally, if you are just trading Nikkei 225 futures as an end in itself, that is fine. However, if you are using them to hedge, you might also want to look at TOPIX futures. The TOPIX is a cap-weighted index (unlike the Nikkei 225) and usually has 1500-1800 names in it (making it more representative of the overall Japanese market). TOPIX futures are traded on the JPX (OSE), CME, and TAIFEX -- and are most liquid on the JPX.

  • 1
    $\begingroup$ Thank you for this comprehensive and knowledgeable answer. $\endgroup$
    – nbbo2
    Jul 27, 2020 at 3:37

Aspects that I presently see are:

1. The higher the liquidity, the better.
2. A contract with the smaller currency equivalent is better, if everything 
   else is the same - this makes a finer position sizing possible (relevant
   for not so big portfolios). So prefer mini instruments over normal 
3. Taking an instrument in the own ('home') currency eliminates currency

As the 'home' currency is EUR, the YEN and USD instruments should be more or less equivalent. The liquidity of the first six instruments should be high enough in any case.

Therefore the instrument with the symbol 165060019 (company name: Nikkei 225 Mini) should be the best here.


People on the buy and sell side who do not sit in Japan usually use SGX Nikkei 225 Futures as

  1. it is denominated in JPY (sorry, initially said it was USD which was wrong)

  2. it also trades when JP Market is closed.

  • $\begingroup$ Thanks for your answer. Are you sure about that? So you do mean the symbol NUM20 in my screenshot (which is now after rollover the NUU20). The reason why I ask: there is practically no volume for this contract and no data available at Interactive Brokers. Additionally: for an USD based contract here [youtu.be/VvOIkFOtNFQ?t=683] (tastytrade.com video) the NKDx0 @ GLOBEX was recommended. $\endgroup$
    – user28221
    Jun 19, 2020 at 6:05
  • $\begingroup$ Sorry for mess up. The contract that I was referring to are SGX Nikkei 225 Futures, and they are denominated in JPY. Because I look at them in risk system in USD term, I was confused. The BBG Symbol / Reuter RIC look like these. NI(Month)(Year) Index SSI(Month)(Last Digit of Year) So NIU0 and SSIU0 should be correct ones. $\endgroup$
    – jeonw
    Jun 20, 2020 at 10:28

I suggest that you go for the contract that has the best liquidity. Don't mix and match.


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