Philadelphia Semiconductor Index Futures Margin & Contract Specifications

What Is the Philadelphia Semiconductor Index?

The Philadelphia Semiconductor Index (SOX) is an equity index specifically designed to track the stock price performance of leading companies in the semiconductor industry. Originally developed by the Philadelphia Stock Exchange, it consists of 30 of the largest semiconductor companies listed in the United States, covering the entire industry value chain—from chip design and manufacturing to equipment and sales. It is widely used by global investors to gauge overall trends in the semiconductor sector, and its movements often serve as a leading indicator for global technology stocks.

The SOX uses a modified free-float market capitalization–weighted methodology with weight caps to maintain diversification. The top three constituents have maximum weight limits of 12%, 10%, and 8%, respectively, while the remaining constituents typically have a 4% cap. Weights are rebalanced quarterly (March, June, September, and December) based on changes in market capitalization to ensure index diversity.

Factors Affecting the Price of the Philadelphia Semiconductor Index

1. U.S. Federal Reserve (Fed) Policy and the U.S. Economy

Semiconductor stocks are part of the technology sector and are highly sensitive to interest rates. Tech companies often require substantial funding for R&D and expansion, so rate hikes increase borrowing costs. As a result, U.S. interest rates and Fed policy strongly influence the SOX, with rate cuts generally benefiting the index.
Inflation data such as CPI and PCE directly affect Fed rate decisions. A low-inflation environment is most favorable for tech stocks, as it allows accommodative monetary policy (low rates) to persist longer, reducing funding costs.

2. Earnings and Outlook of Major Constituents

Although the SOX has weight caps, large constituents such as NVIDIA, AMD, and Broadcom still have a significant impact. Strong earnings results and positive guidance from these industry leaders often lift the entire technology sector. For example, announcements of capacity expansion typically signal strong chip demand and supply tightness, which tends to drive the index higher.

3. U.S. Dollar Exchange Rate

Many SOX constituents are multinational companies with a large share of overseas revenue. An excessively strong U.S. dollar can lead to foreign exchange losses, reducing reported profits and weighing on the index.

4. Technology Innovation Cycles and Themes

The pace of technological advancement is a key driver of the index, including developments in artificial intelligence, cloud computing demand, and semiconductor supply–demand dynamics. From earlier waves such as PCs and smartphones to today’s AI, high-performance computing, electric vehicles, and data centers, each technological revolution has historically driven long-term bull markets in the index.
The semiconductor industry also experiences recurring cycles of oversupply and undersupply. Excess inventories can lead to price cuts and index pullbacks, while tight supply supports profit growth and index gains.

5. Government Regulation and Policy

Regulatory actions in the U.S. or EU—such as antitrust scrutiny of major tech firms (e.g., Google, Meta, Apple), breakup rumors, or investigations—as well as U.S. export restrictions on high-performance AI chips, can directly affect profitability and often act as negative catalysts for the index. Regulatory pressure is therefore a key risk factor for the semiconductor sector.

6. Geopolitics and Supply Chains

The U.S.–China tech rivalry, semiconductor bans, and export controls directly impact chipmakers and related hardware firms within the index. The technology industry relies on global supply chains, making it vulnerable to wars or natural disasters that disrupt production. Given the global reliance on advanced manufacturing at TSMC, tensions in the Taiwan Strait or broader geopolitical risks often trigger risk-off sentiment and lead to sharp index volatility.

7. Investor Sentiment Toward Technology Stocks

The VXN Index is often referred to as the “fear index” for technology stocks. It is derived from option prices on the Nasdaq-100.
When investors become uneasy—for example, when concerns about AI valuations or a potential AI bubble intensify—demand for protection rises, pushing the VXN higher. In such periods, market fear typically weighs on the Philadelphia Semiconductor Index, leading to declines.

PHLX Semiconductor Sector Futures Margin

How much money is needed to trade futures? At the beginning, the required margin is the initial margin. While holding a position, the margin after deducting floating profits and losses must remain above the maintenance margin; otherwise, a margin call will be issued. For day-trading margin, only half of the margin is required, provided the position is closed before the market closes.

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PHLX Semiconductor Sector Futures Contract Specifications

Here is a summary for traders of the contract specifications, exchange, trading hours, minimum price fluctuation, and available trading months for PHLX Semiconductor Sector FuturesFutures.

PHLX Semiconductor Sector FuturesLast Trading Day

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