DAX 40
The index of Germany's 40 largest listed companies: Europe's economic barometer, and the underlying of the FDAX.
The DAX 40 (formerly DAX 30) gathers the largest caps of the Frankfurt exchange: SAP, Siemens, Airbus, Allianz… It reacts to European data (IFO, ZEW, German CPI, ECB decisions) in the morning, then syncs with US indices in the afternoon, two distinct session regimes that order flow reads very well. Its future, the FDAX, trades on Eurex.
In depth
The DAX 40 is the flagship index of the German stock market: the 40 largest caps listed in Frankfurt (expanded from 30 to 40 members in 2021). It's the barometer of the German economy, and thus, de facto, a major thermometer of the eurozone. Its future, the FDAX, is the instrument through which order flow traders access this index.
The DAX 40 is known as volatile and 'clean' to trade: crisp directional moves, particularly sensitive to German and European macro data. The morning European open concentrates much of the action, making it a prime instrument for those who want to trade early, on a session distinct from the US indices.
In practice, the DAX 40 reacts strongly to the German and European macro calendar (CPI, ZEW, IFO, ECB): these releases, often in the morning, frequently set the session's extreme within the first hour. We watch liquidity and delta around those times rather than trading blind.
German CPI at 8am → the DAX 40 often sets its morning extreme within the first hour.
Trading the DAX 40 without watching the European macro calendar. Unlike an index that would passively follow Wall Street, the DAX moves on its own morning catalysts: ignoring a German release at 8am means getting caught off guard by the day's move.
Frequently asked
DAX 40 and FDAX: are they the same?
The DAX 40 is the index (the basket of 40 stocks); the FDAX is the futures contract that lets you trade it. Order flow traders work the FDAX (and its Mini/Micro versions) to access the DAX 40.
Why did the DAX go from 30 to 40 members?
The 2021 reform expanded the index from 30 to 40 components to better represent the German economy and strengthen its diversification. Hence the name 'DAX 40'.
Does the DAX just follow the US indices?
No: it has its own catalysts (German and European macro) and its morning session. It can be correlated to US markets, but often sets its daily extreme even before the US open.
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