How to trade the DAX
The DAX is Germany’s most popular index, listing the country’s 40 biggest companies. Learn how you can get exposure to DAX price movements with us via cash indices and index futures, as well as ETFs and individual shares.
Start trading today. Call +44 (20) 7633 5430, or email sales.en@ig.com to talk about opening a trading account. We’re here 24/5.
Contact us: +44 (20) 7633 5430
Start trading today. Call +44 (20) 7633 5430, or email sales.en@ig.com to talk about opening a trading account. We’re here 24/5.
Contact us: +44 (20) 7633 5430
With us, you can get exposure to the DAX via our Germany 40 index. To open a position, follow these three steps:
1. Decide how you’d like to trade the index
You can harness the power of the DAX by trading Germany 40 ETFs and individual shares, or trading on the index’s value.
2. Create a trading plan
Before taking a position on the Germany 40, you'll need to decide whether you're a short- or long-term trader – and how to manage your risk.
3. Open a live account
Create and fund your CFD trading account – start by filling in our application form.
To help you decide how to trade in the DAX, we explain each method in detail below.
How can you trade the DAX?
With us, there are a number of ways to get exposure to the DAX. You can:
You’ll trade on the DAX using CFDs. CFDs are financial derivatives, meaning that you won’t own any underlying assets, such as stocks in a DAX-listed company. Instead, you’ll speculate on the underlying asset’s price movements – in this case, either fluctuations in the DAX index itself, or movements in the prices of DAX companies’ shares or ETFs.
Financial derivatives are leveraged. This means that you won’t pay the entire value of your position upfront (as you would when buying shares, for example), but you’ll pay an initial deposit called margin to open your trade. Because both profits and losses of leveraged trades are calculated based on the full position size, rather than your deposit amount, you can earn or lose far more than the price you paid to place the trade.
Remember – all trading incurs risk, so always ensure you understand the risks involved, and whether you can afford the potential losses.
Trade the DAX (the Germany 40 on our platform)
- Speculate on the performance of Germany’s largest companies – some of the most popular in Europe – from a single position
- Take a position on the index’s price using CFDs – although this is a derivative trading product, this is the most direct, and only way, to trade the DAX with us
- Gain exposure to the DAX in a market with high liquidity
- Enjoy the freedom to go ‘long’ (if you think the price will rise) or ‘short’ (if you think the price will fall)
- Trade commission-free with CFDs (excluding share CFDs) as charges are included in the spread
- Use our Germany 40 ‘cash’ (spot) market to take a position in the short term
- Or choose our Germany 40 futures or options markets for the longer term
- Trade around the clock, almost 24/7 (excluding 6am to 4pm on Saturday and 6.40am to 7am on Monday UTC+8)
Trade in DAX ETFs
- Gain broad exposure to the DAX index with ETFs
- Take a position on DAX ETF price movements with CFD trading without owning the underlying asset
- Use CFDs to go long or short – but remember that this offers lower liquidity and higher spreads than trading the index directly via CFDs
- Instead of speculating on the current index level of the DAX, you can choose to trade on the price of the ETF – calculated using the fund’s net asset value (NAV)
Overnight funding fees are charged on cash index, share and ETF positions held open after a daily cut off time. The daily cut-off time is 10pm (UK time) but this may vary for international markets. These fees are not charged on futures and options1
| Trading the DAX index directly | Trading in a DAX ETF | Trading in DAX shares | |
| Account types | CFD trading account. | CFD trading account. | CFD trading account. |
| Market hours | 24/7 (except 6am to 4pm on Saturday and 6.40am to 7am Monday UTC+8). Please note that our Weekend Germany 40 market is separate to the main Germany 40 market | If German-listed, when the Frankfurt Stock Exchange is open – 4pm to 12.30am, Monday to Thursday and 4pm on Friday to 12.30am on Saturday (UTC+8). | When the Frankfurt Stock Exchange is open – 4pm to 12.30am, Monday to Thursday and 4pm on Friday to 12.30am on Saturday (UTC+8). |
| Timeframe | Short to medium term. | Short to medium term. | Short to medium term. |
| Liquidity and execution | 0.014 second execution speed and unique deep liquidity. | Higher liquidity offered by trading the index directly. | Higher liquidity offered by trading the index directly. |
| Costs | Commission-free. Trading the DAX on the spot (cash) incurs overnight fees, but index futures don’t incur these fees. |
CFD cash (spot) ETF trades incur overnight fees and have a minimum commission of €10. | CFD cash (spot) trading incurs overnight fees and have a minimum commission of €10. |
Open your DAX trading account
You can open a position on the DAX with us by opening a CFD trading account.
With a CFD trading account, you can enter and exit positions on the DAX (named the Germany 40 on our platforms) quickly in highly liquid markets.
Because CFDs are derivatives (meaning you don’t own the asset outright), you can speculate on both rising and falling prices by going ‘long’ or ‘short’.
CFDs also enable you to trade the DAX index more directly. This gives you exposure to the performance of the Germany’s top 40 stocks from a single position.
CFDs are leveraged, so you can open a trade by making an initial deposit worth a fraction of the total value, known as margin. However, it’s important to remember that profits or losses for your trading are calculated on the full position size, not your margin amount. So, losses could substantially outweigh this initial amount and it’s vital to take steps to manage your risk.
Take your first DAX trading position
Let’s take a more detailed look at the various ways you can open a position using CFDs.
A contract for difference (CFD) is an agreement to exchange the difference in price of an underlying asset, as measured from the time the contract is opened until the time it’s closed. So, however much the price of that asset has risen or dropped since you opened your position is what you stand to make as a profit or a loss, depending on whether your prediction is correct or incorrect.
For example, you believe that the DAX is set to rise from its current price of 16296.7. So, you buy a DAX CFD contract on our Germany 40 index worth €10 per point. Your forecast is correct, and you close your position when the market reaches a sell price of 16396.7. The difference is 100 points, multiplied by the €10 per point, so your profit is €1000 – excluding other costs.
If your prediction is incorrect and the market drops, and you closed your trade at a level of 16196.7, your loss would be €1000 – excluding other costs.
- Trading CFDs on DAX cash indices
- Trading CFDs on DAX index futures
- Trading CFDs on DAX options
- CFD trading on DAX ETFs
- CFD trading on DAX-listed shares
You can trade the DAX index directly on its cash (spot) price using CFDs via our Germany 40 index. This is the most direct way to access the performance of the DAX via CFDs with us.
With this method, you can deal at the current market price and receive tight spreads. But, if you’d like to hold your position open for a longer period – consider trading CFD futures or options as cash (spot) positions incur overnight funding fees if still open after 10pm UK time1 (time may vary for international markets).
Our out-of-hours and weekend trading enables you to trade the DAX almost 24/7 (with the exception of 6am to 4pm on Saturday and 6.40am to 7am on Monday, UTC+8). Any positions opened over the weekend are automatically rolled over to a weekday position after 7am Monday, but you’ll have to open any weekend positions separately from your weekday trades.
Trading index futures with CFDs means you agree to trade the DAX at a specific price on a specific date. With our index futures, overnight funding fees are included in the spread, meaning that you can hold positions for a long time without additional costs. When trading futures CFDs on indices, you also won’t pay any commission.
Options give you as the holder the right, but not the obligation, to exercise the contract on or before its expiry date. When you trade DAX options via CFDs on our Germany 40 index, you’ll be speculating on an option’s current market price (known as premium) which will fluctuate as the probability of the option being profitable at expiry changes.
For example, if you buy a CFD option worth €10 per point of Germany 40 movement, you’d earn €10 for every point that the index rises above your chosen strike price (the set price at which the option can be bought or sold), minus the margin you paid to open your trade.
Buying options is inherently limited-risk – you’ll only risk as much as the premium you pay when opening your trade. However, there is substantial risk when selling options. Selling a call, for instance, incurs potentially unlimited risk as market prices can just keep rising. Options trading is often only recommended for experienced traders.
Open a position on a DAX ETF with a CFD and speculate on the collective performance all 40 of Germany’s top companies. The most common form of DAX ETF is a weighted tracker, which mirrors the make-up of the DAX directly.
Trading DAX ETFs with CFDs incurs a 0.1% fee on each side of the trade (with a minimum fee of €10 ) and an overnight funding fee if you hold your position open after 10pm UK time (time may vary for international markets).1
Would you rather trade on specific DAX-listed stocks, like Volkswagen, BMW or Allianz? With us, you can trade CFDs on any DAX company. Trading CFDs means you’re trading with leverage and are able to go long or short, depending on what the market’s doing.
Just remember that trading with leverage means your profits and losses can substantially outweigh the margin amount you paid to open the position, so ensure you’re always trading within your means.
Share CFD charges include a minimum fee of €10 for online transactions and an overnight funding fee if you hold your position open after 10pm UK time (time may vary for international markets).1
Learn what moves the DAX’s price
If you want to trade the DAX successfully, you’re going to need to be able to predict the DAX’s movements. This means understanding what influences its price, which will help you decide when to open and close your positions for the maximum chance of profit.
Among other factors, the DAX’s price is moved by:
- Earnings reports: changes to DAX constituents’ valuations and results, as well as significant positive or negative news released in their latest earnings report, can have a substantial impact on the index price, depending on the weight of the stock
- Economic events: for example, the index experience significant volatility throughout 2020 during the economic fallout of the Covid-19 pandemic
- News releases: just as with significant economic events, high profile news releases can be followed by a period of volatility in the market. If the news pertains to any of the industries or constituents of the DAX, its price may be especially affected
- Exchange rates: fluctuating exchange rates can affect the DAX’s price because its constituents, like BMW and Volkswagen for instance, earn a lot of their income in other countries
Remember, information from research is power. You should always use a combination of fundamental analysis and technical analysis before trading the DAX, follow a trading plan and a risk management strategy.
Hone your DAX trading strategy
A trading strategy is never perfect, nor is your knowledge of the DAX, so both will be an ongoing process of refining your craft. Here are a few tips to consider as you continue to develop your DAX trading strategy:
- Decide on a trading style: there are four main trading styles – scalping and day trading for more short term traders, swing trading and position trading for longer term. Your chosen trading style determines how often you place a trade and how long you keep them open
- Study charts and price action: daily and weekly charts can help you to gauge market sentiment, while price action can help you recognise patterns and get a feel for what the market might do next
- Use technical analysis and indicators: use technical analysis and trading indicators can help you identify certain signals and trends on the DAX
- Look for DAX trading signals: by analysing the DAX chart often and knowing its rhythms, you should be able to tell if it’s in a trend. You can confirm trading signals with momentum indicators such as the stochastic oscillator or relative strength index (RSI)
- Keep up to date with the news: every time news about a DAX-listed company (like earnings) is released, it can affect share prices. Keep a close eye on the economic calendar to help you trade according to the latest events
- Set trading alerts: no one can watch the markets all the time. Trading alerts let you to set specific criteria for the Germany 40 price and be notified immediately once those market conditions have occurred
What else you need to know about the DAX
The DAX is calculated by weighing all its 40 listed stocks by market capitalisation. This means that bigger companies with a higher market capitalisation, such as Bayer or Adidas or Volkswagen, will be weighted more ‘heavily’ than smaller companies and will have a larger effect on the index’s overall price.
Most of the DAX-listed companies’ individual stock prices are calculated automatically by Xetra, an electronic trading system that’ll determine that company’s weighting on the index.
What are the DAX’s trading hours?
The DAX index is open 24 hours a day except for 6am to 4pm on Saturday and 6.40am to 7am on Monday (UTC+8).
CFD German shares are open from 4pm - 12.30am weekdays (UTC+8).
FAQs
What is the DAX?
The DAX is an index of Germany’s 40 largest companies, by market capitalisation, listed on the Frankfurt Stock Exchange. It has become a popular way to gain exposure to the European stock market and also to track the performance of Germany’s economic health.
What are the ways you can trade the DAX?
With us, there are a number of ways to gain exposure to the DAX. You can:
- Trade the DAX (called the Germany 40 index)
- Trade in DAX ETFs
- Trade in DAX shares
When trading the DAX, you’ll do so using CFDs. Here, you’ll speculate on the index’s price movements or movements in the prices of DAX ETFs or shares.
What should you know before trading the DAX?
Before trading the DAX, make sure you do your research and understand how the index works.
How do companies get onto the DAX?
To get onto the DAX, a company must be listed on the Frankfurt Stock Exchange and it must be one of the top 40 companies by market capitalisation on the exchange. If its market capitalisation drops drastically, a company might lose its listing on the DAX.
1 Overnight funding is the charge you pay for keeping daily cash CFD trades open past 10pm UK time (time may vary for international markets); we‘ll make an interest adjustment to your account to reflect the cost of funding your position. Learn more about how overnight funding is calculated
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