DAX 40 INDEX
Instrument- DAX 40 INDEX
Minimum spread- 0.2
Typical spread- 1.8
Minimum nominal trade size- 1000
Overnight interest (annual) sell- -0.60%
Overnight interest (annual) buy- -0.1.70%
Trading hours (GMT) – 24*5
DAX 40 Trading
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. A free-float methodology is used to calculate the index weightings along with a measure of the average trading volume.
Understanding the DAX 40 INDEX
The L-DAX Index is an indicator of the German benchmark DAX index’s performance after the Xetra trading venue closes based on the floor trading at the Börse Frankfurt trading venue. The L-DAX Index basis is the “floor” trade (Parketthandel) at the Frankfurt stock exchange; it is computed daily between 09:00 and 17:45 Hours CET. The L/E-DAX index (Late/Early DAX) is calculated from 17:45 to 20:00 CET and from 08:00 to 09:00 CET. The Eurex, a European electronic futures and options exchange based in Zürich, Switzerland with a subsidiary in Frankfurt, Germany, offers options (ODAX) and Futures (FDAX) on the DAX from 01:10 to 22:00 CET or from 02:10 to 22:00 CEST.
The Base date for the DAX is 30 December 1987, and it was started from a base value of 1,000. The Xetra technology calculates the index every second since 1 January 2006.
On 24 Nov 2020, Deutsche Börse announced an expansion of the DAX from 30 to 40 members and a tightening of rules in response to the Wirecard accounting scandal. The expansion occurred in the 3rd quarter of 2021.
Factors to keep in mind while trading DAX 40 INDEX
- Exchange Rates
The movement of the euro against other currencies is widely seen as a key influencer of the DAX 40 index; indeed, the DAX often shows a negative correlation to the euro. For example, as the euro weakens against USD, German exports to the US, paid for in USD, are worth more when converted back to euros. This may buoy German multinational profit margins and, in turn, encourage confidence in the index.
- Individual Company Performance
As mentioned, companies that are weighted the highest in the index are more capable of moving the index than smaller constituents. For example, SAP, the largest company in the DAX 40 with the most substantial weighting, suffered a 20% dip in October 2020 that was a major contributor to the wider index falling 2.6%.
- Socio-Political Events
Events such as Brexit, the Great Recession and the coronavirus pandemic are all capable of hitting market demand in one way or another. For example, the pandemic in 2020 had a particularly outsized impact on key sectors such as aviation and banking, with Lufthansa and Deutsche Bank seeing share prices plummet in March 2020.
Why trade in DAX 40 INDEX with CAPITAL STREET
- BROAD RANGE OF MARKETS- Access to the popular Forex markets, including major, minor and exotic pairs
- CSFX offers you our state-of-the-art platforms and range of trading tools
- Trade using Margin- Get greater exposure to the marketplace with a small deposit and spread your capital using margin.
- Automate your trade facilities and direct access to the market
- Safety of funds