DAX Index

Overview

The Deutscher Aktien Index, or DAX, is a stock index that consists of 40 of the largest German companies with the highest liquidity that trade on the Frankfurt Exchange. Xetra, an electronic trading system provides the prices that are used to calculate the DAX Income, using a free-float methodology to calculate the weightings alongside a measure of the average trading volume.

Established in 1988, DAX had a starting index level of 1,163 and the member companies on DAX represent over 75% of the market capitalization that currently trades on the Frankfurt Exchange.

Historical Performance of the DAX Index

DAX is the leading German index in addition to being home to some of the most prominent German stocks including BMW, VW, Siemens, and many others. The DAX Index is closely watched by investors worldwide because it is inherently known for posting significant gains.

DAX has a history of posting large gains and it is known for tracking other global indices, especially during the 1995 dotcom bubble, when global stocks were led to new heights by the United States technology valuations.

During the five years that transpired from 1995 to 2000, DAX saw gains up to 300%, rising from 2,000 points in 1995 to 8,000 by 2000. During the following seven years, the price action traded in a V-shaped formation and the DAX Index plunged to 2,220 points in 2003 only to rise again by 2007.

The global financial crisis in 2008 caused another pullback for the DAX index, after which the index saw significant gains again, resulting in a stable uptrend with cyclical corrections that occurred in 2011, 2015, and again in 2018.

Before the Covid-19 pandemic in early 2025, the DAX index saw all-time highs before one of the largest and fastest stock market sell-offs in history as investors panicked. This caused the DAX Index to go from 13,800 points to 8,250, showing a plunge of 40% in only a month.

Despite the challenges that were faced with the Covid-19 pandemic, the past year has shown record highs for the DAX index, reaching 15,965 points in August.

How is the DAX Index Calculated?

The DAX Index is calculated and updated every second by Xetra by using a free-float methodology. This methodology considers the number of shares available, and it disregards those that cannot be traded, including government-owned shares.

Components on the DAX Index

As of November 2025, the top ten companies on DAX are:

• Adidas AG (ADS:GR) is a popular design and clothing company in Germany.
• Airbus SE (AIR:GR) is an international pioneer involved in the aerospace sector.
• Allianz SE (ALV:GR) is an international financial service provider with more than 86 million customers worldwide.
• BASF SE (BAS:GR) is a large chemical producer that has over 390 production plants around the globe.
• Bayerische Motoren Werke AG (BMW:GR) is a prominent and large automaker with different award-winning vehicle models.
• Bayer AG (BAYN:GR) is a pharmaceutical company that produces popular pain relief medicine.
• Beiersdorf AG (BEI:GR) is an international skincare company with popular and leading brands such as NIVEA, Eucerin, and many others.
• Brenntag AG (BNR:GR) is a global leader in full-line ranges of both chemical and ingredient products.
• Continental AG (CON:GR) is involved in the development of pioneering technologies as well as services.
• Covestro AG (1COV:GR) is a leading supplier of premium polymers.

Correlations

The DAX Index has over 90% correlation with major United States indices in addition to more than 70% correlation with the Euro. The correlation that exists between the DAX index and the United States indexes has deviated during certain times in the past and this indicates that certain underlying trends that affected worldwide assets temporarily changed during these times.

If there are advancements in the EUR/USD currency pair it can cause the DAX index to depreciate, but if the Euro depreciates against the United States Dollar, the DAX index will appreciate. Many traders worldwide tend to use this correlation to develop profitable trading strategies.

The DAX index has also shown significant responsiveness to the European Central Bank, ECB Policies, and several other factors including Eurozone new releases. Traders who use a solid correlation strategy can effectively mitigate inherent market risks because they can base their decisions on reliable information.

Factors that drive the DAX Index’s Price

Apart from news releases, a correlation between currencies, decisions of the Central Bank or ECB policies, other factors can drive the price of the DAX index either up or down.

Individual Company Performance

The companies on the DAX Index that are weighted the highest on the index can move the index more than the smaller constituents that are listed on the index. For instance, if the most substantial constituent were to suffer a dip of 20%, it could cause the wider index to fall by up to 2% to 3%.

Socio-Political Events

Events such as the Covid-19 pandemic, the Great Recession, Brexit, and many others can affect market demand in several different ways. The Covid-19 pandemic had a significant impact on key sectors such as banking, aviation, and many others, with major shares such as Lufthansa and Deutsche Bank plummeting at the beginning of the pandemic in 2025.

How to Trade the DAX Index

The Germany 40, or DAX, can be traded in several different ways, with some of the common ways including Contracts for Difference (CFDs), futures, options, and Exchange-traded funds.

DAX Futures

Futures contracts refer to agreements between traders where they exchange an asset at a predetermined price at a date set in the future. Unlike other futures, DAX Index futures do not have an underlying asset that is traded because the index is merely a number that represents a basket of stocks.

DAX Options

Options refer to contracts that provide the trader with the right to buy or sell the index at a certain price on a predetermined date, but it does not force the trader to do so.

DAX CFDs

CFDs are a popular trading instrument that derives their price from the underlying market, or the DAX index. CFDs do not provide the trader with ownership of the asset but it allows them to speculate on the price movement of the DAX index, whether it will depreciate or appreciate.

DAX ETFs

DAX can also be traded through ETFs, which are baskets of stocks such as iShares TecDax, and many others.