The ESTX50 is a common abbreviation for the Euro Stoxx 50, which lists the top 50 most highly-capitalised stocks on the EURO STOXX – another European index. It’s weighted based on each company’s free float market capitalisation.
While the main EURO STOXX index contains large, mid and small-cap stocks across the eurozone, the ESTX50 is only blue-chip firms. It represents about 60% of the EURO STOXX in terms of market capitalisation.
The ESTX50 is managed by STOXX Limited, a subsidiary of Deutsche Börse AG. For inclusion, the company has to be a eurozone member and trade with a certain amount of liquidity. Every year the index undergoes a review, with new upcoming players being added and laggards removed.
Euro Stoxx 50 futures are contracts in which two parties exchange the value of the underlying index on a certain date for a predetermined price. They’re commonly used for hedging and diversifying equity portfolios across a variety of European sectors. In fact, futures on the Euro Stoxx 50 are among the most actively-traded euro-denominated equity derivatives.
Euro Stoxx 50 futures are also known for being highly liquid, which means the bid-ask spread tends to be extremely tight.