The DAX30 – Europe’s Most Important Stock Index

BY Chris Andreou

|February 1, 2021

The Dax30 or DE30 is the benchmark stock market index in Germany and is used as a measure of the health of the German stock market and overall economic performance.

It measures the performance of the 30 largest publicly traded companies in Germany, which represent around 80% of the total market cap of all German companies at any given time. Like the S&P 500, the DAX30 is a market-cap weighted index, meaning the more valuable the company, the more it affects the overall price of the DAX30.

Created in 1987, the DAX trades on the Frankfurt Stock Exchange, which is the 10th largest stock exchange in the world. The DAX index has historically been responsible for carrying much of the prestige, solid growth and globalisation of German commerce.

Which companies are included in the DAX?

Current members of the DAX30 include Mercedes-Benz parent company Daimler, sportswear titan Adidas, and the financial giant Deutsche Bank.

For companies to be included in the DAX30, they have to be listed on the Frankfurt Stock Exchange, have a minimum of 10% of its shares in public hands, as well as meet several other criteria.

Constituent companies are reviewed on a regular basis.

What factors influence the price of the DAX30?
Due to a high volume of income/export activities in today’s world, the DAX and most major indices react to factors that occur globally, such as economic news, political upheaval and even natural disasters.

Each of these factors will impact demand and supply related to import and export activities in the various sectors represented under the index, which in turn influences the price of the index as a whole.

To make informed trades on the DAX, it’s important to stay on top of economic data coming out of Germany and europe. You will also want to pay attention to trade agreements between Europe and the rest of the world.

Look out as well for figures on job creation, unemployment, GDP and of course interest rates out of the major European states.

How can I trade the DAX index?

The DAX is tradable as a single asset with TIOmarkets under the ticker DE30.

What are the best trading conditions for the S&P 500?

As we’ve seen with the recent pandemic, the stock markets can be prone to large swings up or down based on economic turmoil, recovery and economic conditions.

Trade protection: Using risk tools like TIOshield (only available at TIOmarkets) can help to protect your trades against sudden breaking news that may swing the markets one or another.

TIOshield lets you cancel any trade within 1 hour to get all of your margin back.

Execution speeds: Slow order execution speeds can lead to a big difference between the price you see when you click to open a trade, and the actual price your order is opened at. This difference between prices is called “slippage”.

At TIOmarkets, we have some of the fastest execution speeds you can find, resulting in minimal slippage and more orders filled at the price you clicked.

Leverage: Normally, a large amount of starting capital is required to invest seriously in stocks and indices, because only a small amount of stocks is not likely to yield the kind of results most traders are seeking.

High leverage can greatly increase both the risk to your investment and the potential returns.

If you are comfortable with a high level of risk in return for higher potential gains, you may want to seek a leverage ratio that is commensurate to your investment goals.Some trading educators claim that they can take advantage of large gaps in the DAX which occur over the weekends. By opening or closing positions specifically around the gap, speculators could potentially make significant gains. Find out more about one such trading strategy by visiting https://tradesforprofit.com

Risk disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Never deposit more than you are prepared to lose. Professional client’s losses can exceed their deposit. Please see our risk warning policy and seek independent professional advice if you do not fully understand. This information is not directed or intended for distribution to or use by residents of certain countries/jurisdictions including, but not limited to, USA & OFAC. The Company holds the right to alter the aforementioned list of countries at its own discretion.

Chris Andreou

Experienced independent trader

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Trade responsibly: CFDs are complex instruments and come with a high risk of losing all your invested capital due to leverage.