The German Stock Exchange, often known as the Deutsche Boerse, has a stock index called the DAX (DTB). Deutscher Aktienindex is the abbreviation for Deutscher Aktienindex. During typical trading hours, which are 8:30 a.m. to 5:15 p.m. Central European Time, the DAX index is calculated. It is based on 30 equities, including well-known names like as Volkswagen, BMW, Lufthansa, Siemens, and Adidas, as well as lesser-known names. With an expected daily trading volume of around 200,000 contracts, the DAX futures market has high liquidity.
The DAX was established in 1988, with a 1,000-point base index. The DAX accounts for around 75% of the total market capitalization traded on the Frankfurt Exchange.
The DAX index differs from other indexes in that it is updated with the next day’s futures pricing. Even after the main stock exchange has closed, this holds true. On a regular basis, changes are made. If a company no longer ranks among the top 45 largest in Germany, it might be removed from the index. They must break the top 25 to be added to the stock index and have their DAX Futures traded.
The DAX Futures market, like other exchanges, has particular listing requirements for individuals wishing to offer their securities for trade. Regular financial reports, audited earnings reports, and minimum capital requirements are among these. In addition, the DAX has a greater margin requirement than other futures, such as foreign exchange futures for the British Pound and Euro, common stock futures for Dow, S&P, and other futures.
In the stock market, what does DAX stand for?
The DAX, also known as the Deutscher Aktien Index or GER40, is a stock index that tracks the performance of 40 of Germany’s largest and most liquid firms that trade on the Frankfurt Stock Exchange. Xetra, an electronic trading system, provides the prices used to generate the DAX Index. The index weightings are calculated using a free-float technique and a measure of average trading volume.
What is the distinction between the DAX and the Nasdaq?
Furthermore, Nasdaq is 1.01 times more volatile than the DAX. Per unit of risk, it trades around -0.06 of its entire potential returns. At the moment, the DAX generates roughly -0.06 per unit of volatility.
What does DAX mean in terms of finance?
The DAX is Germany’s main stock index, and it includes the 30 largest companies listed on the Frankfurt Stock Exchange. Deutscher Aktienindex, or German stock index, is the abbreviation.
When is the most advantageous time to trade the DAX?
The optimum time to trade it is within the first hour of trading from the open, just like the Aussie 200 index CFD. The Dax index is favored by many day traders for this precise reason. They may go to work, then actively search for trading possibilities on the Dax, and be done by 8 p.m.
When does the DAX open in the United Kingdom?
Trading hours for the DAX The DAX 30 index’s regular trading hours are 09:00 and 17:30 CET, while Deutsche Brse additionally calculates the early DAX (08:00 09:00 CET) and late DAX (17:30 22:00 CET) for out-of-hours trading.
How do you trade the DAX index?
The 40 largest German firms are represented in the DAX index, which is weighted on market capitalization and liquidity. The DAX index can be traded directly or indirectly via stand-in instruments that track its performance.
Trading the equities of each firm that makes up the DAX index is one approach to trade the DAX index. However, because all 40 companies would have to be tracked, this may take a long time.
Working with a broker who offers mutual funds or ETFs that contain DAX equities in their baskets is another approach to trade the DAX. To duplicate the same weighted mix as the DAX, they would be mirrored.
What is the DAX’s correlation?
The DAX is a performance-based index since it includes information on company dividends, capital income, and cash outflows, all of which are included in the net stock price, whereas a pure price index would exclude these.
What does the DAX 40 stand for?
The DAX 40, or DAX Index, is a German stock market index that includes the top 40 businesses trading on the Frankfurt Stock Exchange in terms of market capitalization and liquidity (FSE). The DAX 40 is often regarded as a reliable indicator of German and European economic health.
What is the name of the German stock exchange?
The Frankfurter Wertpapierbrse (FWB, or Frankfurt Stock Exchange) is one of the major securities exchanges in the world. It is the largest of Germany’s seven stock exchanges, with a proportion of trade of over 90%. The Frankfurt Stock Exchange is run by Deutsche Brse AG, a public company. It ensures the smooth operation of exchange trade in this capacity. In 1990, the Frankfurt Stock Exchange’s management and operation were transferred from the Frankfurt Chamber of Commerce and Industry to the newly formed Frankfurter Wertpapierbrse AG, which later became Deutsche Brse AG. As a result, the Frankfurt Stock Exchange became the foundation of the Deutsche Brse Group.
Advanced electronic trading, settlement, and information technologies are made possible by the Frankfurt Stock Exchange. As a result, it is able to handle the ever-increasing demands of cross-border business. Apart from specialist trading, the Frankfurt Stock Exchange’s entirely electronic trading system, Xetra, is one of the world’s most popular electronic trading platforms. The Frankfurt Stock Exchange not only succeeded in enhancing its own competitive position with the creation of Xetra in 1997. It also provided an appealing environment for foreign investors and market participants.
The Frankfurt Stock Exchange is now a major worldwide trade hub. This is mirrored in the participants’ structure as well. Approximately half of the 200 market participants are from countries other than Germany.
What is the DAX’s stock count?
The DAX 30 Stock Market Index (full name: Deutscher Aktien IndeX, which translates to German Stock Index) is made up of 30 big, blue-chip German corporations that trade on the Frankfurt Stock Exchange.
It is a capitalization-weighted index, similar to the FTSE 100 and S&P500, and it effectively tracks the performance of Germany’s 30 largest publicly traded firms. As a result, it’s a good indication of the German economy’s health and investor enthusiasm toward German stocks.
Companies that Make Up the DAX 30 Stock Market Index
Since its creation in 1988, the DAX has been a relatively steady index, with 16 of the initial 30 companies still in the index.
Companies are capped at a weight of 10% to ensure that the index’s legal provisions are met and, more crucially, that any mergers and acquisitions do not result in the development of a “oeindex heavyweight” that will have a significant impact on the index’s valuation. Over 43% of the DAX is made up of the top five firms (Bayer, BASF, Siemens, SAP, and Allianz). When investing in the DAX, it’s critical to look at how these companies, as well as their respective industry sectors, are performing (pharmaceuticals, chemicals, electronics, IT and insurance respectively).
Admission to the DAX
A company must be listed on the Prime Standard of the Frankfurt Stock Exchange in order to be included in the DAX 30. For a corporation to be allowed, a minimum of 10% of its shares must be held in public ownership, as well as a number of other trading restrictions.
A firm will exit the DAX if its market valuation falls to 45th or lower or if it becomes insolvent, whereas a company will enter the DAX if its market cap increases to 25th or higher.
The German Stock Exchange’s (Deutsche Brse) Board of Directors will meet every quarter to decide whether businesses will be admitted to or excluded from the DAX.
The Value of the DAX
The index begins with a base value of 1,000 and a base date of December 30, 1987. The DAX has witnessed a lot of takeovers, mergers, bankruptcies, and restructurings over the years.
Between 2003 until mid-2007, the DAX was in a bull market for 1,587 days, with the value reaching 8,105.69 at its top. During the credit crunch, it, like most indices, took a big blow, falling to 3,580 in 2009. Since then, the DAX has recovered, reaching an all-time high of 8,736 on September 19, 2013, capping an extraordinary year that saw the index gain over 1,000 points.
Globalization of German corporations has been a key driver of expansion for many of the DAX’s companies and has contributed to the index’s long-term success. SAP, Henkel, Volkswagen, Adidas, and Bayer, among others, have had significant expansion in both the US and rising Asian markets.
Things to Remember When Trading the DAX
- Monday through Friday, from 6:01 oe 19:59 (GMT), the DAX futures contract can be traded.
- With most brokers, the margin required for trading the DAX is typically around 2% (i.e. 50 to 1 leverage).
Trade Example
Let’s say we wish to BUY 1 DAX index, which is now trading at 8,600 euros, and we have a Euro-denominated trading account:
To open this position, we would need to put up a margin (or cash) of 172.
On our trading platform, this amount can be found in the oeused margin area.
If we have an account in a different base currency, such as the US dollar, our margin stays at 2%, but our trading software converts the 172 to US dollars instantly.
Assume the EUR/USD exchange rate is 1.3500. On our US currency account, we see $232 in the used margin area.
In our example, if we buy 1 index and the DAX climbs from 8,600.00 to 8,635.00, we gain a profit of 35.00 (or $47.25 at a EUR/USD rate of 1.3500, for example).