Best Brokers for Trading DAX Index May 2025

Compare the Best DAX Trading Brokers

How to trade DAX?

The 30 largest German companies listed on the Frankfurt Stock Exchange make up the DAX (Deutscher Aktien Index), a prestigious blue-chip stock market index. Similar to the Dow Jones Industrial Average in the United States, it is recognized as a benchmark for German stock market performance.

History of the DAX index

When the DAX was created in 1988, its initial base value was 1,163. The performance of the DAX is an accurate picture of the general state of the Frankfurt Stock Exchange at the time. There was no established index of German stocks before the DAX was created. There were, however, a few independent quotations run by banks or media organizations.

Like the FTSE (UK 100), the Dow Jones Industrial Average- DJIA (USA30-Wall Street) and other comparable indices, the index has since grown in popularity and is now one of the most widely traded indices worldwide.

How is the DAX calculated?

The DAX is determined using the floating market capitalization. This means that the market capitalization of each company is calculated using only those shares that are tradable. Since 2006, the fully electronic, low-latency trading platform Xetra has been operated by Deutsche Börse Group to determine the DAX price. The T7 trading architecture has been used by Xetra since 2017 to ensure the stability and availability needed to operate Germany's largest cash market. The Frankfurt Stock Exchange manages Xetra, which has 200 traders from 16 different European nations, Hong Kong and the United Arab Emirates.

The DAX price is calculated by the Xetra system every second, which gives the index its high level of accuracy. Only free-floating, or liquid, stocks of the companies included in the index are used in the weighting calculation. Under this technique, stocks that are not readily available for purchase or sale on the open market, such as those owned by the company itself, are not included.

Is the DAX an instrument I can trade?

On the Plus500 platform, you cannot trade the DAX directly, but you can do so using CFD futures contracts that are based on the DAX index. If you think the DAX is going up, you can start a buy position. If you think the index is going down, you can open a sell position. Options trading is another technique for trading the DAX. On CFD options, traders can also place buy/sell orders (Call and Put).

Who is in charge of the DAX?

The DAX is run by the Deutsche Börse Group, which also runs the Frankfurt Stock Exchange and organizes markets for trading stocks and securities. The MDAX, an index for medium-sized German companies, and the SDAX, an index for smaller German companies, are both managed by Deutsche Börse Group.

What are the leading companies in the DAX?

• SAP (SAP.DE) is a software provider focused on business applications.
 
• Linde (LIN.DE), an engineering and industrial gases company.
 
• The international group and manufacturer Siemens (SIE.DE).
 
• Volkswagen is a German multinational car manufacturer (VOW.DE).
 
• Airbus (AIR.DE) is a world leader in aviation technology.
 
• Merck (MRK.DE) is a health research and technology company.
 
• Deutsche Telekom is a telecommunications company (DTE.DE).
 
• Allianz (ALV.DE).
 
• The German multinational automobile company Daimler (DAI.DE).
 
• Deutsche Post is a global parcel delivery company (DPW.DE).

What affects the price of the DAX?

The change in the market value of each company included in the DAX index is weighted. This in turn determines the daily value of the index.

SAP, for example, has a potentially larger market capitalization than Linde, but its influence on the index is limited to a maximum of 10% of the index total. This ensures that no single company can have more influence than is warranted by the DAX values as a whole, and that the other companies can still have a major impact on the value of the quote.

Each day after the market closes, the prices of the listed companies are calculated and entered into a predetermined formula to display the daily movement of the top companies. While the stock prices of some of the companies in the index may have soared that day, others may have fallen. Based on the total value determined at the end of the day, traders can determine whether the index as a whole has risen or fallen.

Trading in the DAX market

CFD trading allows traders to make predictions about the movement of the DAX without having to invest in the underlying assets. Instead, traders are willing to tolerate the price variation between the opening and closing prices of a position.

Leverage, faster settlements, possibly less slippage due to faster trade execution, and no commission fees are some of the benefits that CFD trading can offer. Another advantage is that CFD traders can profit from changes in the price of the instrument by going long or short, depending on whether the price is rising or falling. You should be aware that risks are involved including loss of capital.

Methods of trading the DAX

• Futures CFDs: Profits or losses are based on price differences between opening and closing positions.
 
• Options CFDs: Predictions are made about the future price of an underlying asset.

4 Best Brokers for Trading DAX

1. Pepperstone - Best Overall Broker for Trading DAX.

   Pepperstone is highly regarded for providing a robust trading environment for DAX traders. With competitive spreads, advanced trading tools, and fast execution speeds, Pepperstone stands out as an excellent choice for both novice and experienced traders.

2. FPMarkets - Top Choice for DAX 40 Index Trading.

   FPMarkets delivers exceptional trading conditions for the DAX 40 index, with tight spreads, advanced platforms, and flexible leverage up to 1:500. Perfect for traders seeking exposure to Germany's leading companies.

3. Plus500 - Best Broker with Multiple Licenses.

   Plus500 offers a secure and user-friendly platform for trading DAX (CFDs). With numerous regulatory licenses and strong investor protection measures, Plus500 is ideal for traders seeking a reliable platform for various financial instruments.

4. XM - Best Platform and Excellent Brokerage for Beginners.

   XM excels by offering extensive educational resources and practical online workshops to support DAX traders. Its user-friendly interface and comprehensive support make XM a great choice for beginners.

Frequently Asked Questions (FAQ)

When can the DAX 40 be traded?

The DAX 40 can be traded 24 hours a day, with a short settlement time. The index, like other indices, runs from Monday to Friday.

Is it a good idea to trade the DAX?

Yes, the DAX is one of the most commonly traded indices in the world, making it a liquid and well-known index. It is highly correlated with a number of frequently observed fundamentals, such as currency movements and economic reports like German GDP.

Is the DAX 40 equivalent to the GER 40?

The GER40 CFD is a true reflection of the DAX index. With the benefits of flexible position size, negative balance protection and increased leverage, it is a contract for difference market that closely resembles the performance of the actual index.

What is the relationship between the Euro and the DAX?

The value of the Euro and the DAX are most closely related.