New index has been introduced by Deutsche Börse on Wednesday to cover entire US session. Its purpose it to lower the overnight risk.
The index has been introduced and launched under the name XDAXDAX, from the DAX index family. It will provide the possibility for clients to use only one index as an underlying asset for their products, linked to the DAX index before, during the XETRA trading hours or even after. Previous trading enabled a use of the DAX and XDAX indices together for this purpose. Trading data are used from the XDAX to count the XDAXDAX during the period before and after the trading hours and so the index starts with the beginning of the DAX calculations, using the same basis.
Hartmut Graf, CEO of STOXX Limited, stated: “The XDAXDAX gives structured product providers a simple and transparent means of covering the full trading hours of the derivatives market, from 8 a.m. to 10 p.m. The index is a logical addition to the current DAX index family and combines the concepts of the DAX and the XDAX indices under a single identifier.”
Deutsche Börse’s DAX index shows the performance of the 30 largest and most liquid companies on the German stock market, making together approximately 80 percent of German companies’ market capitalisation. It uses Xetra trading data and is calculated daily from 9.06 a.m. to 5.30 p.m. Deutsche Börse adjsuted the starting time of its daily DAX calculation in January 2016. The DAX index is now being calculated starting no later than 9.06 a.m. Previous calculations began only after all of the 30 DAX equities have ended their opening auction on Xetra. The XDAX index is used to calculate the performance of the same basis after the Xetra trading hours. Prices of the DAX futures, traded on the Eurex derivatives exchange and the European Central Bank’s Euribor interest rates, are used in its calculation.
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