DAX

AAA

DEFINITION of 'DAX'

A stock index that represents 30 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 average trading volume.

The DAX was created in 1988 with a base index value of 1,000. DAX member companies represent roughly 75% of the aggregate market cap that trades on the Frankfurt Exchange.

INVESTOPEDIA EXPLAINS 'DAX'

In a different twist from most indexes, the DAX is updated with futures prices for the next day, even after the main stock exchange has closed. Changes are made on regular review dates, but index members can be removed if they no longer rank in the top 45 largest companies, or added if they break the top 25.

The vast majority of all shares on the Frankfurt Exchange now trade on the all-electronic Xetra system, with a near-95% adoption rate for the stocks of the 30 DAX members.


RELATED TERMS
  1. Free-Float Methodology

    A method by which the market capitalization of an index's underlying ...
  2. Xetra

    An all-electronic trading system based in Frankfurt, Germany. ...
  3. Nikkei

    Short for Japan's Nikkei 225 Stock Average, the leading and most-respected ...
  4. Index

    A statistical measure of change in an economy or a securities ...
  5. Bundesbank

    The central bank of Germany. The Bundesbank is the U.S. equivalent ...
  6. European Union - EU

    A group of European countries that participates in the world ...
RELATED FAQS
  1. What are the Basel III rules, and how does it impact my bank investments?

    The Basel III rules are a regulatory framework designed to strengthen financial institutions by placing guidelines pertaining ... Read Full Answer >>
  2. What does 'Incoterms' mean in relation to Ex Works (EXW) trades?

    Ex works is part of the published Incoterms and outlines the obligations of transportation to buyers and sellers. The International ... Read Full Answer >>
  3. What are the differences between Ex Works (EXW) and Free On Board (FOB)?

    Ex Works (EXW) and Free on Board (FOB) are Incoterms used to describe situations where sellers deliver goods. Ex Works describes ... Read Full Answer >>
  4. Is there an index for tracking mid-cap stocks?

    There are several indexes for tracking mid-cap stocks. The most widely referenced is the S&P Mid-Cap 400, but others ... Read Full Answer >>
  5. What advantages do corporations have over privately held companies?

    The chief advantage that most publicly traded corporations enjoy – and the primary reason why private companies decide to ... Read Full Answer >>
  6. What are the differences between Levels I, II, and III American Depository Receipts ...

    Mutual funds and exchange-traded funds offer American investors opportunities to diversify a portfolio through investing ... Read Full Answer >>
Related Articles
  1. Mutual Funds & ETFs

    Go International With Foreign Index Funds

    As global trade continues to expand and the world's economies grow, spice up your portfolio with these exciting opportunities.
  2. Options & Futures

    Getting Started In Forex Options

    Stocks are not the only securities underlying options. Learn how to use FOREX options for profit and hedging.
  3. Mutual Funds & ETFs

    Index Investing

    Get to know the most important market indices and the pros and cons of investing in them.
  4. Economics

    What is a Capital Account?

    Capital account is an economic term that refers to the net change in investment and asset ownership for a nation.
  5. Mutual Funds & ETFs

    U.S. Investors Are Seeking Opportunities Overseas

    A latest analysis leads to believe that many investors are applying a spring cleaning approach to their portfolios, rebalancing as the 1st quarter ended.
  6. Investing

    Three Portfolio Moves To Consider Now

    What portfolio moves should you consider making as the 2nd quarter kicks off? Before we focus on the future, let’s first reflect on the 1st Q surprises.
  7. Investing

    Pockets Of Value In The Stock Market

    U.S. stocks benefited from signs the Fed’s path toward higher interest rates, as well as from continued merger-and-acquisition activity on of low rates.
  8. Investing News

    A New Corporate Governance Initiative In Japan

    Expectations are low that Japan can create a corporate governance climate that meets global standards, but a new initiative is aimed at doing just that.
  9. Active Trading Fundamentals

    Where And How Should You Make Your First Trade?

    New traders should enter markets that offer the greatest opportunity for learning their craft while keeping risk at a minimum.
  10. Economics

    Can The U.S Close Its Trade Deficit?

    The stronger dollar could have increased the U.S. trade deficit. Instead, economic growth issues abroad and falling oil prices have helped shrink it.

You May Also Like

Hot Definitions
  1. Merger Arbitrage

    A hedge fund strategy in which the stocks of two merging companies are simultaneously bought and sold to create a riskless ...
  2. Market Failure

    An economic term that encompasses a situation where, in any given market, the quantity of a product demanded by consumers ...
  3. Unsystematic Risk

    Company or industry specific risk that is inherent in each investment. The amount of unsystematic risk can be reduced through ...
  4. Security Market Line - SML

    A line that graphs the systematic, or market, risk versus return of the whole market at a certain time and shows all risky ...
  5. Tangible Net Worth

    A measure of the physical worth of a company, which does not include any value derived from intangible assets such as copyrights, ...
  6. Marginal Utility

    The additional satisfaction a consumer gains from consuming one more unit of a good or service. Marginal utility is an important ...
Trading Center