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Brief History of the Frankfurt Stock Exchange

People hear about the New York Stock Exchange and London Stock Exchange on a regular basis. However, this time, let’s focus on the Frankfurt Stock Exchange (FRA).

First of all, the FRA is one of the most well-known stock exchanges around the globe.

Unsurprisingly, the above-mentioned stock exchange is the most important stock exchange in the country.

The country’s main stock exchange posts a number of indices. The Deutsche Borse is the owner of the Frankfurt Stock Exchange, as in the case of the other German exchanges.

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The history of the country’s main stock exchange is very interesting.

In the 16th century, merchants decided to create a stock market in order to determine regulated currency exchange rates for trading purposes. Notably, this is regarded as the beginning of one of the most famous stock exchanges in the world.

It is worth mentioning that the above-mentioned stock exchange has pretty much all of the turnover in the country.

Germany has one of the largest economies. So, it is not surprising that the country is home to one of the largest trading facilities.

Frankfurt Stock Exchange and its trading venues

There are two trading venues. The first one is Xetra, and the second one is Borse Frankfurt.

The bigger part of The country’s largest stock exchange’s profits come from the first one.

Thanks to Xetra, foreign investors entered the stock exchange.

It is worth pointing out that Xetra offers trading of local stocks as well as exchange-traded funds (ETFs).

Don’t forget that Borse Frankfurt focuses on local as well as international securities. Interestingly, it has the widest range of securities. For example, it includes thousands of bonds and shares, etc.

The DAX and its role

The DAX is an index on the country’s largest stock exchange. The index is made up of 30 blue chip German companies taken from Xetra. Importantly, the DAX is one of the most popular indexes around the globe, with a market cap of well-above $1 trillion.

One interesting fact: The above-mentioned index is the German equivalent of the Dow Jones Industrial Average was created in the 1980s, more precisely in 1988.

Let’s take a look at the Dow Jones Industrial Average as well. It is regarded as one of the most commonly followed equity indices. However, many professionals consider the Dow Jones Industrial Average to be an inadequate representation of the whole U.S. stock market compared to a broader market index.

People shouldn’t forget that it includes only 30 large companies. The Dow Jones Industrial Average is price-weighted, as opposed to stock indices that utilize market capitalization. We need to mention that the above-mentioned index is the second-oldest among U.S. market indices. The oldest one is the Dow Jones Transportation Average.