Markets faced the shock of a generation in 2020. Stock markets posted their steepest falls since 2008, only to end the year at dramatic new highs on the back of vaccine hopes. There has rarely been a more critical opportunity to highlight the requirement for investors to remain agile in managing their portfolios in the face of financial turmoil.   

In our continuous efforts to extend our product shelf, Julius Baer Markets is pleased to announce the launch of our latest offering – Open-end Mini Futures, which could serve as an attractive alternative investment in these times of low interest rates and high volatility.  

Professional investors have long enjoyed the ability to manage portfolio risk with futures contracts. These same benefits are available to a wider audience of investors in the form of Mini Futures. With the launch of our Open-ended Mini Futures contracts, Julius Baer is taking futures trading to the next level by making them easier to buy and more affordable to trade. Clients are able to trade futures at a fraction of the upfront financial commitment of traditional futures, allowing for managing market exposure and customising portfolios more precisely to help reduce risk. 

All Julius Baer Mini Futures can be found via the product category Leverage or via this link.

WHAT YOU NEED TO KNOW

No Margin Call
The value of a mini future cannot drop below zero, unlike conventional futures, and thus investors never have to pay any additional money to cover any margin calls. This is because mini futures have a stop-loss level embedded, which expires the product automatically if the underlying asset moves against the investors’ expectations and breaches the stop-loss level.

Stop-Loss
If the stop-loss is breached, the Issuer calculates the remaining value of the product and distributes it to the investor. The stop loss is higher than the financing level for long mini futures and lower for short mini futures.

Financing Level
The investor is only required to pay a small fraction of the price of the underlying asset, thereby providing leverage. The issuer pays the rest of the price. The financing level is set below the current underlying asset price for long mini futures and is above for short mini futures. The issuer adjusts the financing level and stop loss level daily to account for the issuer’s financing costs.

Long and Short Mini Futures
Mini futures are suitable for investors who have an opinion on the direction of the underlying asset and want to participate in the movement. Such investors are prepared to take enough risk, understanding they can lose potentially all of the initial capital, but can also profit from rising (long mini future) or falling (short mini future) prices with extra leverage.