Invest in Stock Indices on BKFX

Indices are probably the most widely known format of CFDs as they are indicators used to measure any market performance.

Since each index defines a group of stocks that represent a particular market or market sector, they have the advantage of empowering traders to have an overall view of an industry and take better trade decisions, rather than taking a view on one standalone stock.

Through our robust multi-asset MetaTrader 4 platform, we provide a wide range of global indices to select from, including DAX 30, Nikkei 225, NASDAQ 100 and S&P 500.

• US30.bk
• US100.bk
• US500.bk
• UK100.bk
• DE30.bk
• NKY225.bk
• HK50.bk

If you’re looking forward to investing in the stock index market, bkfx offers you access to a variety of global indices, with no commissions and less margin requirements.

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Invest in Stock Indices on BKFX

Basic Guide for Trading DAX30

In volatile market conditions, we will obviously tend to pay more attention to the dynamics of the S&P and NASDAQ in order to get a comprehensive picture of the situation in the stock market. However, we sometimes forget that these two indices only reflect the performance of American equities. So, to evaluate a particular country’s market and take advantage of regional news, you should consider the domestic market index. The indices consist of companies with the largest capitalization values ​​in the country concerned.

For example, the main barometer of economic conditions in Germany is the DAX30, which tracks the 30 largest companies traded on the Frankfurt Stock Exchange (FSE). Traders love this index for many reasons. One of them, of course, is because of its economic status – Germany is the country with the strongest economy in the European region. So, this index takes into account the situation in Europe as well as in Germany.

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DAX30: Introduction

The Deutscher Aktien Index (DAX) represents the 30 largest companies with the highest liquidity. The success of these companies is hard to ignore given that they have shown their results through the “German Economic Miracle” – the post-World War II rebirth of the German economy. These companies are multinational companies and operate in various industries, from pharmaceuticals to automotive and financial services. Have you ever heard of names like Adidas, BMW, Siemens, or Volkswagen? Yes, they are part of the 30 giant companies that are members of the DAX.

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What are the requirements a company must have in order to be included in DAX30?

There are several mandatory requirements in order to be included in the DAX list.

• First, it must operate for at least 3 years since its IPO.
• 15% of each company’s market capitalization must be publicly traded.
• Must generate income or have head office in Germany.

This index is capitalization-weighted, i.e. the companies with the largest market capitalization and most influence the index. The calculation is based on the free-float method, which only takes into account the number of available shares. So, this method excludes equity that cannot be bought or sold.

Invest in Stock Indices on BKFX

How do I trade DAX30?

It is definitely not possible to buy or sell an actual index. Instead, you can take advantage of the movement by trading CFD futures contracts. CFDs are financial instruments provided by brokers, which give you a great opportunity to trade on changing indices using leverage. With BKFX, you can trade the DAX30 as well as several other indices on MetaTrader 4 and MetaTrader 5 .

What are the things that drive the DAX30?

If you are considering the DAX30 as one of your potential investments, then you must know the things that drive it.

First, of course is risk sentiment. The index reacts very sensitively to events in global markets. If a troubling event occurs (for example, the global case of COVID-19), the market will be exposed to risk-off action. As a result, the stock index moved down. On the other hand, risk-on sentiment will push the index up.

The second driver for the index relates to the dynamics of the stocks of the largest capitalized companies. For example, news that the German airline Lufthansa will receive a 9 billion euro bailout from the German government can increase optimism for DAX30 bulls.
The economic condition of an index’s country of origin is the third determinant of its price. For the DAX30, we must pay attention to the economic data of Germany and the European region. News of stimulus policies from the German government and the European Central Bank, positive PMI and trade balance will obviously increase the demand for German equities.

Last but not least is local market news from various German sources.