Trade the DAX index

The DAX 30 is the benchmark Stock Market Index (known as the Deutscher Aktienindex), in German Stock Indices and overall economic performance of the country, which lends itself to investor sentiment towards German equities.

The DAX-30 trades on the Frankfurt Stock Exchange of the Deutsche Börse Group, which is the 10th largest in the world, and third largest in Europe in terms of total market capitalisation of listings. The DAX is capitalisation weighted like France’s CAC 40, and measures the performance of the 30 largest and most publically traded on companies in Germany, which represent 80% of the total German market capitalisation.

DAX History

The index began with a base value of 1,000 on 30 December 1987, and over the years the DAX has been through many mergers, bankruptcies, takeovers and restructures which brought about an unstable outlook and negative investor sentiment.

This was changed, as during 2003 to 2007 the DAX saw upward trends that were record breaking for a consecutive 1,587 days, and enjoyed values exceeding of 8,105 peaks.

Subsequently, as the cycle of most indices the DAX saw a pitiful fall in the 2009 ‘credit crunch’ and ended its peak performance at 3,580. However, the index was not down for long, as since the crash in September 2013, the DAX experienced a major peak and a record high of 8,736, following a 1,000-point gain.

The global popularity of German companies that form the DAX 30, have been the backbone of the German economy. The DAX name and reputation has been responsible for carrying these companies in their solid growth and globalisation.

DAX 30 Index composition

The DAX 30 was formulated in 1987, and as mentioned measures the performance of 30 of the most profitable companies in Germany.

For companies to be included in the DAX 30 they need to be listed on the Prime Standard (Frankfurt Stock Exchange), where a minimum of 10% of the listed company’s shares are to be held in public hands as well as a number of other criteria to be considered to become a constituent part of the index.

Reviewed on quarterly basis by the Board of the German Stock Exchange (Deutsche Börse) and according to basic criteria these constituents can be altered. A company is excluded for the index when it’s rank is 45 or lower, this is from criteria that is driven from a free float market capitalisation or a low order book volume.

On the other hand, if a company’s rank is 25 or better than the lower ranking company, the latter will be replaced with the fast entry of the better ranked company.

Top 5 companies represented by DAX 30 and their index weighting (%)

Bayer

10.03%

Daimler

9.06%

Siemens

7.93%

Allianz

7.82%

BASF

7.77%

Factors that influence the overall index price

As with most indices, CFD’s, Stocks, commodities, etc. the DAX, like any other instrument, reacts directly to factors that occur globally. Events such as economic breaking news, political unrest, even natural disasters. These are mainly due to import / export activities that will influence the demand in each company’s industrial sector, that in turn affects the index as a whole.

Keeping abreast of economic data from Germany as well as most of Europe is a smart trading move when you are trading DAX index.

Following the DAX live charts during DAX index trading is another method to understand the DAX CFD trends, especially when there are announcements that include: Job creation, unemployment rate, GDP figures and other economic benchmarks.

DAX 30 Trading information

  • The DAX trading hours are Monday to Friday 6:01 – 19:59 (GMT)
  • The DAX moves in increments of 0.50
  • The margin requirement is 2%
  • Maximal available leverage is 50:1
  • The minimum trade size is 1 unit
  • The DAX is priced in Euro

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