Market Overview Q1 2025
The DAX started 2025 with mixed signals. After a strong year-end 2024 at 20,200 points, the first quarter shows consolidation tendencies. The options markets reflect increased uncertainty.
DAX Level
20,450
+1.2% QTD
Avg Volatility
18.5%
Elevated
Open Interest
2.8M
+15% vs Q4
Volatility Analysis
The implied volatility (IV) in the DAX shows a clear division in Q1 2025:
IV Rank Development
Main Drivers of High IV
- ▸ECB interest rate decisions (Jan 25, Mar 6)
- ▸US trade policy under new administration
- ▸German economic data (recession fears)
IV Reduction in February
- ▸Stabilization after January earnings
- ▸Fewer macroeconomic events
- ▸Technical consolidation
Open Interest Analysis
Open interest in the DAX shows significant concentrations at certain strike prices:
Top Strike Prices (March Expiry)
485K Kontrakte
Resistance
620K Kontrakte
Support
890K Kontrakte
Max Pain Point
Interpretation:
The massive put wall at 20,000 indicates strong support. The max pain point at 20,500 suggests the DAX will likely trade around this level at March expiry. The call concentration at 21,000 represents important resistance.
Put/Call Ratio
The put/call ratio provides insight into market sentiment:
Current Ratio
1.25
(1.25 puts bought per 1 call)
Meaning: Slightly bearish to neutral sentiment. Increased hedging activity.
Historical Comparisons
→ Significantly more hedging than in Q4
Trading Opportunities
Iron Condor at 20,000-21,000
Use the range between large open interest clusters.
Setup:
- ▸ Sell 20,000 put / 21,000 call
- ▸ Buy 19,500 put / 21,500 call
- ▸ Expiry: March expiration
- ▸ Expected premium: ~€150-200 per contract
IV Crush After ECB Decision
Sell before ECB meeting on March 6 when IV is high.
Strategy:
- ▸ Sell straddles/strangles 3-5 days before event
- ▸ Close immediately after decision
- ▸ Profit from IV crush
Put Spreads for Hedging
Use cheap put prices for portfolio hedging.
Example:
- ▸ Buy 20,000 put / Sell 19,500 put
- ▸ Cost: ~€80-100
- ▸ Max protection: 500 points (2.5% hedge)
Key Events Q1 2025
March 6: ECB Rate Decision
High IV expectedExpected rate cut of 25 basis points. High volatility before and after decision.
March 21: Options Expiration
Large expiryQuarterly expiration with large open interest. Expect increased volatility in the week before expiry.
March 28: German Inflation Data
Moderate IVImportant indicator for future ECB policy. Deviations from expectations can cause movements.
Risk Assessment
Main Risks
- ▸Geopolitics: Escalation of international conflicts
- ▸Recession: German economy remains weak
- ▸Rate risk: Unexpected ECB decisions
Opportunities
- ▸Rate cuts: Support for equity markets
- ▸Valuation: DAX relatively cheap vs. S&P 500
- ▸Technology: AI investments in Germany rising
Conclusion
The DAX options market in Q1 2025 offers interesting opportunities for experienced traders. Elevated volatility around key events and clear support/resistance levels from high open interest clusters create attractive setups.
Use the presented strategies at Libertex with professional tools and low fees!
Risk Warning: This analysis is for informational purposes only and does not constitute investment advice. Options trading involves significant risks and can result in total loss. Past performance is no guarantee of future results.