All about the Frankfurt Stock Exchange (Börse Frankfurt): what is XETRA and what to expect about the German market? FSE – Frankfurt Stock Exchange (XETRA) in detail Access to the Frankfurt Stock Exchange
Having been created in 1585, the site (according to the owners) dates back to the 11th century, when merchants from the West met at fairs with the pagans of Siberia.
Today it is one of the ten largest trading platforms in Europe and is the undisputed leader of the continental part. The capitalization of its participants reaches 1.9 trillion. US dollars, in terms of total turnover, the exchange accounts for up to 90% of all market movement. The exchange is part of a conglomerate Deutsche Borse and has close links with the SIX Swiss Exchange.
The Germans are making history Frankfurt stock exchange to the autumn of 1150, when the first food fair took place on the Rhine. This information is allegedly recorded in written sources. In 1330, Ludwig of Bavaria expanded the influence of the trading platform by introducing a spring fair, which benefited fur traders and the inhabitants of Western Europe - they were always rich in fish.
By the beginning of the 16th century, the city, located in the center of Europe, had become so rich that Martin Luther called it “ silver and gold hole of the German Empire " A huge number of French and Dutch merchants, who were persecuted in their homeland because of their adherence to Protestantism, came here. Meanwhile, each region of feudal Europe had its own currency, and even merchants got confused in the cross rates.
In 1585, they met at a traditional fair and established uniform exchange rates in order to curb fraud. And 20 years later, in 1605, the words appeared Burs or Borse, which subsequently became the name for all exchanges in continental Europe.
Historians are convinced that it came from the name of the merchant from Bruges Van der Beurse, and the word “bers” also has a second meaning - bag, purse, scrip.
First sheet with currency quotes dated 1625, it already contained 12 currencies with dates of payment for goods received at the fair. In 1666, rules of conduct for brokers appeared, and in 1694 they moved to their own building, Großer Braunfels. In 1779, government bonds of the German Emperor were placed on the stock exchange for the first time.
After World War I, shares of publicly traded companies fell in price to the level of rubbish, and in 1929, simultaneously with the United States, the financial crisis, called "Black Friday". All II world war the site was working and gaining momentum, but after the fall of the Third Reich it was closed for six months. In 1953, trading began in US, Canadian, and Swiss dollars.
francs and European currency. In 1957, the restored Trading Hall of the exchange opened. A, attention, already in 1969 (!), two years before, a computer system was installed in the Ramhoff building BOGA, which allowed the exchange of quotes via telex. In 1993, the Frankfurt Stock Exchange became the New Markets Exchange (analogous to the dot-coms) and became part of the group Deutsche Börse AG.
Interesting thing. In 2002-2004, the owners of the Frankfurt trading platform were negotiating a merger with, which would make the group third in the world in terms of capitalization. After the epic refusal ( Deutsche Börse AG CEO Werner Seifert had to resign), the Germans began negotiations with the French with a capitalization of 3 trillion. US dollars.
At first, the parties could not agree on a price, then the company joined the game, buying the Europeans for $9.96 billion. USA with the right to exchange shares. Having suffered defeat, the Germans hastened and bought the conglomerate of Swiss exchanges SIX Swiss Exchange. Financial turnover this practically did not increase, but made it possible to export Xetra outside Germany.
Modern Frankfurt Stock Exchange
Today Frankfurt stock exchange is one of the world leaders financial system, more than 1,000 companies with a total capitalization of 1.9 trillion are traded on its fields. US dollars. The scheme is different from other platforms of the Deutsche Borse AG conglomerate: all players are divided into three categories: banks, official exchange brokers and registered traders, with the latter being given the least rights.
The primary purchase and sale price depends on the banks, since they account for the bulk of all transactions. Exchange brokers (they belong to the exchange itself) accept and execute orders, and the spread depends on their efficiency. Free traders play the role of “small fish to a predator” and, despite their numbers, do not have much speculative potential.
The main trading system of the exchange is the system Xetra (Exchange Electronic Trading). It was created in 1997 and, thanks to its speed, reliability and ease of learning, quickly won the love of players. In total, about 20 sites across Europe are connected to it, including Frankfurt, the pan-German Deutsche Börse AG, the SIX Swiss Exchange, Eurex and the Shanghai Stock Exchange.
Sales and purchases are carried out through Xetra valuable papers and derivatives, there is also a cash market Cash Market and valuable metals Xetra-Gold. Within Xetra, over 2.5 thousand different instruments are used, including those that have already become traditional investment funds and ETFs, as well as rare commodity indices ETSc and debt securities ETNc.
There are several main indices on Börse Frankfurt, it’s like the already familiar one ( German Deutscher Aktienindex), and its derivatives DAXPlus, Cdax, DivDAX, LDAX, MDAX, SDAX, TecDAX and VDAX. In addition, the site calculates the Euro Stoxx 50, a key indicator of the entire European economy, calculated in five currencies at once.
Since the German economy is the most powerful in the Eurozone, it is the one that bears the debt obligations of the PIIGS countries (Portugal, Ireland, Italy, Greece, Spain). Because of this, the DAX index quotes almost completely copy the Euro Stoxx 50, and by tracking one, you can understand the dynamics of the other. The remaining DAXes are sectoral and are of interest to investors playing in segments.
- TecDAX – The Frankfurter Wertpapierborse TecDAX Index includes 30 companies operating in the high technology sector, whose shares are the most liquid. In particular, firms such as ADVA Optical Networking and Quality Service Communications AG (QSC), as well as software developer Software AG, are included here.
- MDAX – The MDAX index includes companies that follow the top thirty. When calculating this index, the indicators of 50 issuers are used. In particular, this includes such well-known brands as Hugo Boss AG, Metro AG, Puma SE.
- SDAX — The SDAX index is calculated based on the share price of firms from the first group. These companies occupy places from 81 to 130. Here you can find such famous brands as Tom Tailor Holding AG, Bauer AG and so on.
- HDAX – HDAX is a broad index that includes companies regardless of their industry. This includes firms represented in the indices described above. Among the companies we can note, for example, BB Biotech AG (works in the field of biotechnology) or Q Cells GMBH(produces solar panels).
- CDAX – The CDAX index is a composite index. It includes more than 300 companies that represent the first and second groups. Thanks to this, this index can be considered as an indicator of the “health” of the German stock exchange. It brings together companies from various fields, including automakers (for example Volkswagen AG), banks ( Commerzbank AG) and so on.
The largest companies whose shares are traded on FWR are:
Adidas
BMW
Deutsche Lufthansa
Henkel
SAP
Volkswagen Group
Bayer
Daimler
Deutsche Bank
Deutsche Telekom
E.ON
Porsche
and others.
Frankfurter Wertpapierbörse
In total, over 250 international trading institutions are present on the Frankfurt Stock Exchange, and the total number of traders exceeds 4.5 thousand. This is understandable, because with capitalization (slightly less than $2 trillion), companies representing up to 35% of the planet’s total investment capital participate on the site. Theoretically, the total capacity of the exchange can reach 20 trillion. Euro.
The conditions for listing are quite simple, but depending on the size of the company, there are two markets for its presence. The first one is called " Standard» and is subject to the requirements of Deutsche Börse AG. The second one is called " Premium", and here the regulating document is the EU Directive "On Markets financial instruments"(MiFID). Participants in the second are required to conduct seminars, congresses and meetings.
- To enter both markets, a candidate for inclusion needs to prepare a prospectus. Minimum term existence of the issuer (compliance with the current organizational and legal form is not required) is three years. Financial statements must comply with IFRS (IAS/IFRS), for non-EU residents - IFRS (IAS/IFRS) or its adequate equivalent.
- The minimum market capitalization of a listing candidate must be EUR 1.25 million, the minimum volume initial IPO- 10 thousand shares, free fleet at the time of placement - 25%, but there are exceptions. Six months before the proposed placement, the company must undergo an audit with publication in English or German, provide balance sheet according to the PFFZ or IFRS, have your own website.
At one time on Frankfurt stock exchange there were up to 50 companies from countries former USSR, the overwhelming majority are Russian, metallurgical, processing, raw materials, gold mining. Now their number has decreased significantly, since serious regulation of the site repels speculators - instead, the site boasts of the stability of companies and solid dividends to shareholders.
According to a 2015 report, the average level of payments to shareholders on the Frankfurt Stock Exchange was 3.7% of the share price, which is considered a very good indicator by European standards. These amounts cannot be withheld by the governments of the CIS countries, devalued, or taken away as a tax.
Interesting thing. If development stock trading Germany was not interrupted by two world wars, due to which the London and Paris stock exchanges managed to rise, today the Deutsche Börse financial group could have a capitalization of 8-10 trillion. US dollars - this is the conclusion American economists Thomas Neymour and Richard Larrieu.
The critical time was not the wars themselves, but the restoration of Germany, when the victors, instead of developing industry, turned the country into a market for goods and services. The difference in the Soviet and American approaches can be observed in the example of the GDR and the Federal Republic of Germany. 25 years later, the German Democratic Republic is still a backward region with no factories or factories.
Brokers for entering the Frankfurt Stock Exchange
Brokers provide access to the Frankfurt Stock Exchange:
Virtual tour of the Frankfurt Stock Exchange with Google Maps
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It is one of the largest in the world and the largest in Germany. Today, the operator of this trading platform is Deutsche Boerse Group AG. It is generally accepted that the Frankfurt stock Exchange was back in 1585, when the only exchange rates in the city of Frankfurt am Main were accepted by merchants. At that time, the latter was the largest shopping center in Europe. But the Frankfurt Stock Exchange in Germany took the leading position only in 1949.
Today, the trading platform in Frankfurt is, not without reason, considered one of the most innovative exchanges in the world. Maintains contact with investors around the world, with their number increasing every day. Interestingly, until 2000, the majority of exchange participants were of German citizenship. At the moment there are a lot of investors from England, France, Switzerland, the USA and many other countries.
Frankfurt Stock Exchange. Advantages of the stock market
The main advantage is that the Frankfurt Stock Exchange offers the lowest initial public offering costs compared to other exchanges. For companies wishing to enter international markets capital, the Frankfurt Stock Exchange is the best option in terms of time and financial costs. Trading platform Quite mild listing requirements are put forward, and they are the same for absolutely all participants, regardless of capitalization and trading history. But at the same time, company transparency is necessary.
Trading through the Frankfurt Stock Exchange is possible on three markets at once:
- official market where you can work with government bonds and shares of large companies;
- regulated market – trading in securities of companies with smaller capitalization;
- over-the-counter market – work with shares of new and small companies.
At the end of 2007, the daily trading volume on the exchange was approximately 1.915 trillion US dollars. There were 866 companies listed. The leading index calculated by the Frankfurt Stock Exchange is DAX (Deutscher Aktienindex). It displays a weighted value of the share prices of the 30 largest German companies and is, by and large, a barometer of the entire German economy.
The Frankfurt Stock Exchange is the largest in Germany and one of the world's largest stock exchanges. There are approximately 73 companies listed on the FWB.
Working hours
The trading session opens at 11:00 and ends at 22:00 Moscow time.
Indexes
DAX is the most important stock index Germany. The index is calculated as a capitalization-weighted average of the share prices of Germany's largest publicly traded companies (with capitalization calculated only on the basis of free float shares). The index also takes into account dividend income received from shares, assuming that dividends are reinvested in shares. Thus, the index reflects the total return on capital.
After the end of trading on the exchange, the L-DAX index (Late DAX) is already calculated, which is an indicator of the development of the DAX index after the exchange closes.
Bargaining
Today, the operator of the Frankfurt Stock Exchange is the Deutsche Borse Group, an organization with public law activities that allows the most in the best possible way organize the course of trading.
The German structure of Deutsche Borse includes the stock exchange of the same name, the electronic trading system Xetra, the largest European clearing organization Clearstream (serves sellers and buyers of securities from more than 110 countries), the provider of exchange information Market News International, Eurex Group (the main business is organizing trade derivative instruments and related services), etc.
Deutsche Borse's capitalization is about 8 billion Euros, profit in 2011 is about 950 million Euros.
The exchange itself is the operator of the Xetra system, which is known as one of the most liquid electronic trading systems in the global cash transactions market, which involves more than 650 participants.
History of the exchange
The history of the exchange dates back to the adoption by traders in 1585 of uniform exchange rates in Frankfurt am Main, which by that time had already become a major European trading city.
The Frankfurt Stock Exchange has held a leading position in Germany since 1949. At the end of the 1980s, Deutsche Borse united several German exchanges under its wing, including Frankfurt.
In 1988, the DAX index was introduced to the public, which was a list of 30 leading German blue chip companies traded on the Frankfurt Stock Exchange. This list includes such world leaders in their industries as Siemens, Adidas, BMW, Volkswagen Group, Bayer, Metro, Henkel. The operator of the site is Deutsche Boerse Group AG. It was transferred to the control of the Deutsche Boerse Group, created on its basis, in 1993.
Frankfurt Stock Exchange - English Frankfurt Stock Exchange (German: Frankfurter Wertpapierboerse, FWB), the 12th largest stock exchange in the world by market capitalization. The Frankfurt Stock Exchange is located in Frankfurt am Main, Germany, and is owned and operated by Deutsche Boerse, which also owns the European futures exchange Eurex and clearing company Clearstream.
The Frankfurt Stock Exchange covers more than 90% of turnover in German stock market and has a significant share in European market. In 2010, the exchange decided to stop conducting transactions on the trading floor, and the full transition to electronic trading was completed in 2011. Trading is now carried out exclusively through the Xetra system, with former floor brokers now playing the role of market makers.
The Xetra trading platform is already used by more than 14 international exchanges, such as the Vienna Stock Exchange since 1999, the Irish Stock Exchange since 2000 and the Budapest Stock Exchange since 2003. Approximately 47% of the 300 market participants on the Frankfurt Stock Exchange are foreign companies. As of November 2010, the exchange listed companies from more than 80 countries: 49% from North and South America, 31% from Europe (including Russia), 14% from Asia and 6% from Australia and Africa.
More than 250 international trading institutions and more than 4,500 traders operate on the Frankfurt Stock Exchange. Investors with direct access to the exchange represent 35% of global investment capital.
The indices on the Frankfurt Stock Exchange are: DAX, DAXplus, CDAX, DivDAX, LDAX, MDAX, SDAX, TecDAX, VDAX and EuroStoxx 50.
Automatic trading platform Xetra allows trading from 09:00 to 17:30 with the final auction from 17:30 to 17:35. In November 2003, Late DAX was introduced with trading hours from 17:45 to 20:00, and in 2006 X-DAX was introduced with trading hours from 17:45 to 22:00 (in accordance with the American trading session).
Based on numerous requests from traders.
Hello, friends! Today we will talk about one way to find out what positions large speculators and investment funds take. After all, as you know, the Forex market is driven by money. Namely, big money. More precisely, we will talk about the analysis of COT (Commitments of Traders) reports provided by the CFTC (US. Commodity Futures Trading Commission). From the material below you will learn: what kind of reports these are, when and where to get them, and most importantly, how they can help us in trading.
COT reports
From these reports we can find out what position major Forex players currently occupy. And, using this data, make more informed decisions about your own entries and transactions to analyze the current trading situation on the market.
So why do we need big players to move? The fact is that the market is driven by money. And it's big money that drives it. Naturally, we won’t change anything with a lot of, say, 0.1. And here major players: Large traders, investment funds, banks, etc., pouring hundreds of millions of dollars into the market, cause significant movements. And going against such force is often unwise. Therefore, it may be useful for us to know which side of the market the “big guy” is on.
How to find out the positions of major players?
One way is through COT reports provided by U.S. CFTC.
U.S. The CFTC is an organization that ensures that there are no violations in trading in the futures market. And all major players in the futures market report to this organization. In turn, this commission makes publicly available reports called “Commitments of Traders”. We can simply go to their website and view these reports without any hindrance. This is free information in the public domain. Naturally, these reports are from the futures market. And the futures market is not all players on foreign exchange market. But even from these data we can draw quite significant conclusions.
How can we access these reports?
NON-COMMERCIAL are large speculators. That is, banks or investment funds. As well as individuals with large capital. Here you can see the number of long and short positions, as well as spreads.
Spreads are opposite positions opened by the same player. For example, to buy and sell at the same time. Perhaps this is part of some complex strategy, since futures have different expiration dates. Perhaps something else. We are not particularly interested in this. But such data is provided.
COMMERCIAL is data on hedgers. Data on commercial representatives on the market who trade not in order to somehow speculatively earn money, but in their own interests. That is, some big companies.
For example, it is unprofitable for some company to increase prices for any raw materials that are required to produce their product. And they, accordingly, buy raw materials or currency in advance, so that if the price rises, they have supply for their goods and do not overpay. Simply put, commercial players do not play in the market to profit from price changes, but act in their own interests.
In order to fall into this category, you need to submit a special application to the Futures Markets Commission. And only after that they will be able to accept you. But recently, not only large ones fit into this category. commercial organizations, but also, for example, swap dealers in banks.
TOTAL – the sum of long and short positions of large players and commercial hedgers. For each position there is a division into Long and Short, that is, into the number of long and short. There is a lot of information in this report that we do not need. There are various products and goods here. We are interested in currency, so we need to scroll down the report to currencies.
We also have CHANGES FROM data.
To put it simply, then open interest is the amount of money in the market.
How to use the data from the COT report?
In principle, you can study the data directly from the report, but on our website there is a tool that presents the numbers in the form of indicators for each individual currency pair.
It is located at the following link:
The figures from the CFTC Bulletin are divided into three charts under currency pair. You can select a specific instrument in the settings windows located above the chart.
The number of pairs (8 positions) corresponds to the list currency futures CME exchanges. The remaining two settings windows are technical indicators and options for presenting the type of quotes: candles, bars, etc.
COT tools are based on the TradingView service, which allows you to use standard settings for charts or remove some indicators.
Commercial players, like dealers, who act as market makers and open positions opposite to clients, go against the trend. And, as a rule, they begin some kind of active action against the trend. And often a little before that the moment the trend appears.
Factors that are not available ordinary people, but known to hedgers, encourage them to take some action in advance. For example, buying pound futures. And, thereby, protect your business from financial risks. Here's a good example of the Canadian dollar.
We had a long downward trend. At this moment, hedgers (Commercials) were in the overbought zone of the COT index. Almost the entire time the trend was down. And as soon as the trend began to grow upward, accordingly, the COT index for hedgers (Commercials) began to creep down. They go against the trend for their own interests. And they often begin to go against the trend in advance.
In our example with the pound, you can see that the positions of hedgers are now growing. This means that we should expect the pound to move downwards. As for large traders or speculators, as a rule, they go along with the market, since they make up a significant part of it.
How to analyze all this?
It is worth paying attention to the situation as a whole. That is, watch for hedgers (Commercials) and large speculators (Large Speculations), as well as small speculators. First of all, I want to warn you that using the COT index as a separate system is incorrect.
If you rely only on COT reports, then you are unlikely to be able to trade profitably based solely on this information. It happens that the signals are false, and you will have to trade on weekly charts. Recognizing this requires a great deal of training and experience. Plus the time factor. You will have to hold the position for a very long time and use huge stop losses.
Therefore, I advise using COT reports as a filter to your system. That is, assess the situation using technical analysis, and check transactions and general state market according to COT reports. In this case, you need to use all the information, not just some specific group of traders. And also pay attention to open interest, that is, how hot the market is.
Open interest is located at the bottom of the chart as a histogram. Let me remind you that OpenInterest is the amount of money in the market. Let's look at an example of what happened in the market. I draw your attention to the points when open interest is in critical positions. That is, either he is very low or high.
How high and how low we can only determine by looking at the graph as a whole. At these points we pay attention to what the other groups of speculators are doing. Namely, large hedgers (Commercials) and small players (Small Speculations).
As you can see from the picture above, low Open Interest is similar to a flat; the lack of liquidity does not allow any of the participants registered in the COT to gain large positions in the euro.
The chart further shows that the situation of low volumes in futures and options was the “calm before the storm.” The Brexit referendum, US elections, and the Fed's policy reversal caused strong movements in Forex, which was reflected in active trends and increased liquidity.
Critically high open interest means the market is overheated. Hedger positions (Commercials) are below. The positions of large (Large Speculations) and small traders (Small Speculations) are at the peak of purchases. What could happen here? Small speculators can easily be put under the knife. Large speculators are likely to take profits by selling their positions to small speculators, who will willingly buy them. There is too much money, the potential for growth is currently exhausted.
The fall of the euro is not long in coming: small speculators (Small Speculations), as always, did not guess the movement, large players and hedgers “exchange” volumes, the indicator curves meet each other halfway, some positions go into the cache, which is reflected in the fall in Open Interest.
The positions of hedgers (Commercials) and speculators (Large Speculations) can also be used as signals of overbought or oversold. The minimum and maximum values of accumulated futures volumes often coincide with an abnormal rise or fall in Open Interest.
As can be seen from the figure below, they accurately predict changes (reversals) in the exchange rate of a currency pair.
The main thing is to remember the rule: large speculators (Large Speculations) always increase long positions according to the trend of the pair’s exchange rate. Hedgers always go against the trend. Small traders are almost always victims - they are often wrong, but the indicator curve must be traded in a system against the crowd, so sometimes they can be quite useful. That's all.
Conclusion
Don’t forget that you should use COT reports only as a additional indicator your system, which can be checked once a week before the market opens. Do not trade solely on COT reports, as this, to put it mildly, is very difficult and unreliable.
Thank you for your attention. See you again!
