The cash market of Deutsche Börse comprises two market models for securities trading: floor trading of FWB® Frankfurter Wertpapierbörse (the Frankfurt Stock Exchange) and Xetra®, the fully electronic trading system. Both market places provide efficient trading and optimum liquidity. Stocks, exchange-traded funds, exchange-traded commodities, actively managed funds as well as certificates, reverse convertibles, warrants and bonds are traded here.
Xetra is Deutsche Börse’s fast and efficient electronic trading system for the cash market and a synonym for the automation and internationalization of securities trading. Xetra matches buy and sell orders from licensed traders in different locations worldwide in a central, fully electronic order book. These orders are executed at optimum conditions. Via their trading screens, domestic and international investors have access to the securities listed at the Frankfurt Stock Exchange. Xetra works independently of traders' locations and provides insight into the order book, in which buy and sell offers are entered. Almost all stocks listed at the Frankfurt Stock Exchange are tradable on Xetra. Since April 2008, Scoach, the European exchange for certificates and warrants, offers trading in around 300,000 products on Xetra. Since December 2008 investors can buy or sell around 3,000 actively managed mutual funds via Xetra. With introduction of Xetra International Markets, European blue chips, among them all Dow Jones EURO STOXX® equities will be tradable via Xetra and settled in the respective domestic markets.
In floor trading, independent lead brokers determine the prices. Each security is supported by a lead broker, who fixes bid and ask prices and either executes incoming orders in accordance with the price discovery rules or manages them in an order book until they are executed or deleted or they expire. Less liquid securities can thus also be traded efficiently on the trading floor.
Together, the floor of the Frankfurt Stock Exchange and Xetra account for approximately 97 percent of exchange trading in German equities.
The Frankfurt Stock Exchange combines tradition with progress Deutsche Börse has proved its capacity for innovation with the new structure of the German equity market. The core of the new structure consists of three clearly distinctive transparency levels: Prime Standard and General Standard for the EU-regulated market, as well as the Entry Standard and the First Quotation Board for the Regulated Unofficial Market. At the same time, Deutsche Börse has introduced an index system which clearly distinguishes between classic and technology sectors. In 2005, the Central Counterparty (CCP) was implemented for the cash market and adapted to the latest market requirements. The CCP simplifies complex trading strategies and offers trading participants several advantages: each transaction remains anonymous, even during settlement. The CCP assumes the risk of a possible counterparty default; buy and sell orders are netted against each other – only the resulting balance needs to be settled. In addition to the securities traded on the stock exchange, off-exchange transactions can also be netted via the CCP. This service has been complemented by transactions in stocks in collective custody and exchange-traded funds. The Frankfurt Stock Exchange is by far the largest of the German stock exchanges. It ranks among the world’s leading exchanges, alongside NYSE Euronext, the National Association of Securities Dealers Automated Quotation (Nasdaq) and the London Stock Exchange (LSE). Today, Deutsche Börse is a full-service provider for securities, offering its clients one-stop access to a full range of services from trading to the provision of the technical infrastructure. This range of services is unrivalled by any other exchange organization. |
