The DAX 30 Index is one of the most significant indices in Germany. Also known as the Deutscher Aktienindex, it consists of stocks in 30 leading German blue-chip companies traded on the Frankfurt Stock Exchange.
The CFD broker UFX allows you to trade a variety of asset classes, including currencies, ETFs, stocks, and commodities, as well as indices like the DAX 30. When trading indices online, it’s important to stay updated on the market performance of a wide range of assets, particularly the individual stocks listed on those indices, because price changes can affect their overall strength or weakness.
The top 5 companies listed on the DAX 30 are Bayer, BASF, Siemens, SAP, and Allianz. Together, they make up over 43% of the index’s value. When opening a position on the DAX, smart traders keep a close eye on the performance of these companies, as well as the strength of the relevant industrial sectors, such as pharmaceuticals in the case of Bayer, and chemicals for BASF.
The base date for the DAX is 30th December 1987 and it was started from a base value of 1,000. The DAX is a “capitalisation-weighted” index or a “market value-weighted index,” which means its component stocks are measured according to their total market capitalisation. In other words, the more important stocks account for a larger part of the total value of the index.
For a company to be included in the DAX, it must be listed on the Prime Standard of the Frankfurt Stock Exchange. As stated on the Deutsche Böerse website, “The Prime Standard is a segment of the Regulated Market with additional admission follow-up duties. The admission conditions and the individual follow-up duties are set out in the Exchange Rules for FWB® the Frankfurt Stock Exchange.” Among the admission criteria are requirements that the company possess an approved security prospectus, a reported history of over 3 years, floating of shares valued at a total of at least €1.25 million, a total of at least 10,000 shares to trade and a free-float of at least 25% of the total issue.
The DAX tends to react to news, political events, and economic changes, particularly European-based. Because of this, it’s important for traders to stay up to date on news and the economy. Brokers like UFX help keep their clients informed in real time.