The Xetra trading venue has been computing the index’s price every second since 2006, meaning investors can track its movements closely. The Barchart Technical Opinion rating is a 100% Buy with a Strengthening short term outlook on maintaining the current direction. Over 1.8 million professionals use CFI to learn accounting, financial analysis, modeling and more. Start with a free account to explore 20+ always-free courses and hundreds of finance templates and cheat sheets.

1. Like other blue-chip indices, the DAX Index is also weighted by market cap, so companies with higher market caps have more influence on its value.
2. For this reason, the DAX and its performance are also regarded as an indicator for the German share market as a whole.
3. Hence, investors tend to leverage DAX to potentially magnify profits, but also losses.
4. They should maintain their legal or operating headquarters in Germany.
5. The index tracks the performance of Germany’s 40 biggest companies by order book volume and market capitalisation.
6. An index is a method of tracking the performance of a group of assets with prices in a standardized way.

To be included in the DAX 40, a company must first be listed in the Prime Standard segment on the Frankfurt Stock Exchange. Companies that belong to this segment have to meet higher standards of transparency than companies listed on the General Standard segment. Additionally, the company should be continuously traded in Xetra with a public float of at least 10%. Another requirement is to have an office registered in Germany with most of its volume of shares traded in Frankfurt, and be headquartered in one of the EU countries. First, you can buy a share of a mutual fund or a popular ETF (exchange-traded fund) that tracks the performance of DAX 40.

The DAX is often used as a barometer for the overall health of the German economy. The German Stock Index is a total return index of 40 selected German blue chip stocks traded on the Frankfurt Stock Exchange. The equities use free float shares in the index calculation. The DAX has a base value of 1,000 as of December 31, 1987.

Get virtual funds, test your strategy and prove your skills in real market conditions. The vast majority of shares on the Frankfurt Exchange now trade on the all-electronic Xetra system, with a near-95% adoption rate for the stocks of the 40 DAX members. The DAX family of indices also includes the MDAX, SDAX, and TecDAX indexes. You can use the index to draw comparisons between its 30 individual constituents or companies. This allows you to determine which companies perform similarly so you can maximize your returns.

A free-float methodology is used to calculate the index weightings along with a measure of the average trading volume. International investors can gain exposure to The DAX using a number of exchange-traded funds (ETFs) that trade on European https://g-markets.net/ exchanges. Constituents must generally have their shares listed in the Prime Standard segment (a segment of the EU-regulated market) to comply with these criteria. They should maintain their legal or operating headquarters in Germany.

Historical Performance of the DAX 40

It was launched in 1988 on the Frankfurt Stock Exchange, the predecessor of the Deutsche Boerse. It should be noted that the Deutsche Boerse itself is now listed on the DAX index. DAX 40 tracks the 40 most liquid and largest German companies in terms of market cap. The DAX Stock Index was created in 1988 at an index value of 1,000 points. At that time, the DAX companies made up around 75% of the total market capitalization of the entire Frankfurt Exchange.

Stock Index Definition

Foreign companies should have a presence in the European Union or an EFTA state. They should continuously trade on Xetra, with a minimum period of 30 trading days since their first listing. Leveraged trading in foreign currency or off-exchange products on margin carries significant risk and may not be suitable for all investors. We advise you to carefully consider whether trading is appropriate for you based on your personal circumstances. We recommend that you seek independent advice and ensure you fully understand the risks involved before trading.

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Companies included in the DAX can have a maximum weight of 10%. The prices used to compute the index come from Xetra, an electronic trading system. The index tracks the performance of Germany’s 40 biggest companies by order book volume and market capitalisation. The DAX 40, also known as the DAX Index, is a blue-chip stock index following the largest German companies listed on the Frankfurt Stock Exchange. It’s also a reliable indicator of the country’s economic strength.

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As of June 18, 1999 only XETRA equity prices are used to calculate all DAX indices. The DAX—also known as the Deutscher Aktien Index or the GER40—is a stock index that represents 40 of the largest and most liquid German companies that trade on the Frankfurt Exchange. The prices used to calculate the DAX Index come through Xetra, an electronic trading system.

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It’s considered to be the benchmark stock market index for the German economy. The DAX index, which tracks 40 large and actively traded German companies, is considered by many analysts to be a gauge for Germany’s economic health. The companies listed in the DAX are multinational concerns that influence the domestic German economy and the global economy as well. The success of these companies has greatly contributed to what is nfp forex trading known as the “German economic miracle” or Wirtschaftswunder, a term that describes Germany’s rebirth after World War II. The DAX Index tracks 30 large and actively-traded German companies within the Frankfurt Exchange, which is the largest financial exchange in Germany. The DAX is the most prominent stock index for Germany, and it is considered to be a proxy for the performance of the German economy and market conditions.

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