Shares are securitised fractions of a company’s capital. Shares may or may not be tradable on a stock exchange. The prices are a result of supply and demand. In the case of sale, the bid side of the quote is relevant for investors and in the case of purchase the ask side. When buyers and sellers have agreed on a price and a quantity, the trade takes place and a turnover is achieved. Investors want a return on their equity investment for which, in addition to the price gain, the dividend decided at the Annual General Meeting is also relevant. The dividend is the part of the profit of shareholders.
In order to track the development of different markets (countries, sectors, etc.), stocks are divided into indices and serve as a mirror for the stock market. The most important German indices are DAX, TecDAX, MDAX, SDAX and DivDAX. International stock markets are represented by international indices such as the Dow Jones Industrial, Nikkei or the Nasdaq 100. The current level of the DAX, the most important German stock index, is also the mirror for German blue chips. These are particularly high-turnover shares with a high market capitalization and the companies enjoy a high degree of international recognition. With the help of the ISIN or WKN, shares can be clearly identified and their performance can be viewed in charts on the website of the Frankfurt Stock Exchange.
Investors can trade around 1,000 shares on the Xetra trading platform. It is the most important stock exchange for German shares. In Frankfurt, specialist trading on the trading floor offers around 10,000 shares, most of them foreign shares. Companies can be listed in three different segments: Prime Standard, General Standard or the Open Market, whereby the transparency requirements are lowest in the Open Market, the former over-the-counter market.
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