The DAX, or Deutscher Aktien Index, is an index representing the top 30 of the largest and most liquid German companies that are listed on the Frankfurt Stock Exchange.
The DAX was created in 1988 with a base index value of 1000 and is now the leading index for the German What are value stocks? A value company is a company that app... More, which is used all over the world.
The calculation of the What are value stocks? A value company is a company that app... More (i.e. the value of the index) begins every trading day at 09.00 Central European Time and is based on the Market capitalisation (short: "market cap") is the total ma... More of the top 30 largest companies in The Federal Republic of Germany is a country in central Eur... More.
As Germany is the largest economy in the The European Union is an economic and political union. 18 ... More, the DAX is also used as a leading indicator of economic health for the EU. It is important for those trading the to watch for developments on the DAX because the euro What is currency? Currencies are the generally accepted medi... More and the index are correlated. If the index value of the DAX increases, it is likely that the euro will rise as well.
The actual What is price? The price is the measure of the value of good... More feed for the DAX 30 comes from an electronic trading system called Xetra is an electronic trading platform run by the Deutsche ... More, a powerful trading system developed for the Frankfurt Stock Exchange which now caters to a number of exchanges around the world.
Criteria for listing/exit
For a company to be listed on the DAX, it must meet certain criteria:
- It has to be listed in the Prime Standard, a stock segment of the Frankfurt Stock Exchange with maximum transparency.
- It has to have been continuously traded on Xetra and have a widely held stock of at least 10%.
- It must have its head office, or the biggest part of its sales What is the trading volume? In trading, volume refers to t... More, in Germany.
The companies that fulfil these requirements are further sorted according to two characteristics:
- The What is a trade order? In trading, an order can be defined... More book turnover on the Xetra trading platform and on the floor trading in Frankfurt.
- The market capitalisation based on What is free float market capitalization? Free float is a t... More or widely held stock.
These two characteristics are the main criteria for the election of DAX-listed companies.
Adjustments to the DAX listings (45/45)
Adjustments of the DAX are based on the following four rules:
A company will be taken out of the DAX listing when it no longer belongs to the largest 45 companies, measured by the two attributes of order book turnover and market capitalisation, and also when a company not yet in the index reaches rank 35 in market capitalisation and at least rank 45 in book turnover.
A new company will be listed in the DAX when it belongs to the 25 biggest companies according to the two criteria. For a new company to be listed, an existing company has to be removed. The company that is removed is the one with a rank below 35 in at least one of the above two attributes and also has the worst market capitalization of the companies listed.
A company will also be removed from the DAX when it no longer belongs to the top 40 companies, according to the two characteristics.
A company is added to the DAX when it belongs to the top 30 companies according to the two above attributes and also when there is a company in the DAX that no longer belongs to the top 35 companies, again according to the two attributes.