Trading at Deutsche Börse

Deutsche Börse

What is the Deutsche Börse Group?

Deutsche Börse Group is a German-based financial services company and one of the largest exchange organizations in the world.

Deutsche Börse operates an integrated business model.

Its activities cover every phase of the market life cycle from capital formation, trading, clearing and settlement through to the custody of securities:

ServiceDescription
Pre-IPO and ListingDeutsche Börse assists companies at all stages of development with capital formation:
  • Pre-IPO: Brings together early-stage companies with investors
  • Market Structure: Offers listings to companies in a variety of types of marketplaces
  • Venture Network: Provides a funding platform for early-stage growth companies
  • IPO: Provides listings for new companies and data services related to listing
  • Exchange-Traded MarketsOperates exchange trading for a variety of different asset classes through nine unique marketplaces (see below for more details):
    1. Xetra®
    2. Börse Frankfurt
    3. Tradegate Exchange
    4. Warrants Exchange
    5. EEX Group
    6. Eurex Exchange
    7. Eurex Repo
    8. EEX Group
    9. 360T®
    ClearingDeutsche Börse’s two clearing houses act as central counterparties (* central counterparties act as a buyer to the seller and a seller to the buyer):
    1. Eurex Clearing AG
    2. European Commodity Clearing AG
    They help minimize credit default and clear both exchange and over-the-counter transactions.
    Settlement
  • Settlement involves the booking of trades with the exchange of securities against money
  • Deutsche Börse’s Clearstream settlement service processes about 132 million settlement transactions each year
  • Custody
  • Custody involves the safekeeping of assets after trading, clearing and settlement take place
  • Deutsche Börse provides settlement services, such as the handling of dividend payments and corporate actions, for all types of securities
  • Collateral and Liquidity Management
  • Securities financing
  • Cash funding
  • Collateral management
  • Market Data and Regulatory Services
  • Deutsche Börse offers real-time and historical data in a variety of formats
  • Regulatory Services offers customer resources for meeting regulatory requirements
  • IndexesDeutsche Börse licenses several proprietary indexes
    TechnologyThe exchange offers a wide range of technology services including:
  • Hosted managed services for trading clients
  • Advanced software trading tools
  • Deutsche Börse operates several exchange brands for trading its products:

    CategoryExchangeProductsMarket Facts
    Cash Market
    Currency Icon
    Xetra
  • Shares
  • ETFs
  • ETPs
  • Xetra transacts:
  • More than 90% of all trading in shares at all German exchanges
  • About 30% of trading in ETFs in Europe.
  • BörseFrankfurt
  • Equities
  • Bonds
  • ETFs/ETPs
  • Funds
  • Commodities
  • Currencies
  • Certificates
  • Sustainable Products
  • More than one million German and international securities trade on this exchange.
    Tradegate ExchangeAn exchange geared for private investors trading:
  • Equities
  • ETPs
  • Bonds
  • Funds
  • Regulated market under MiFID
    Warrants Exchange
  • Certificates
  • Warrants
  • Reverse Convertibles
  • Runs on Börse Frankfurt trading infrastructure
    EEX Group Spot markets:
  • Power
  • Natural Gas
  • Emissions
  • Europe’s leading energy exchanges
    Derivatives Market
    Stocks Icon
    Eurex ExchangeDerivatives markets:
  • Interest Rate
  • Equity Index
  • Equity
  • Volatility
  • Dividend
  • FX
  • ETF
  • Commodity
  • Property
  • Offers trading on international benchmark products
    Eurex RepoInternational financing in secured money markets:
  • Repos
  • Securities
  • Lending
  • Offers trading in international fixed income and equity securities in a variety of different currencies
    EEX Group Derivatives markets:
  • Power
  • Natural gas
  • Emission allowances
  • Agricultural products
  • Freight
  • Metals
  • Coal
  • Europe’s leading energy exchanges
    Foreign Exchange
    Interest Rates Icon
    360T®
  • OTC financial instruments (especially FX)
  • Short-term money market products
  • FX and interest rate derivatives

  • Web-based trading technology

    Deutsche Borse Group

    History of the Deutsche Börse Group

    The following timeline lists some key events in the history of Deutsche Börse Group:

    YearEventCommentary
    1585Birth of Frankfurt Stock ExchangeMerchants from all across Europe meet in Frankfurt to establish uniform exchange rates for currencies
    1854Introduction of the trading floorFrankfurt Stock Exchange creates an enclosed area accessible only to officially approved traders
    1896Integration of after-hours trading into official exchange organization
    1949Founding of Frankfurt central securities depository
    1958Foreign shares listed for first time since end of war
    1968Free floating of goldLeads to resumption of gold trading
    1970Founding of new data centerData center becomes one of the precursors of Deutsche Börse Systems AG
    1983Standardization of equity optionsSecondary trading commences
    1987ntroduction of KISS price information systemReplaces display boards on the exchange floor
    Creation of DAX index
    1990Founding of Deutsche Terminbörse exchangeFutures trading begins for the first time in Germany
    1998Founding of EurexMerger of the Soffex and DTB futures market produces first cross-border derivatives exchange
    2000Founding of Clearstream International
    European Energy ExchangeBegins trading in spot electricity
    2005Establishment of Entry StandardAllows listing of more small and medium sized companies
    2010Acquisition of major interest in Tradegate ExchangeExpands presence in retail market for trading equities, bonds, funds and exchange-traded funds (ETFs)
    2011Floor trading migrates to Xetra technology-based trading
    2014Launch of first renminbi bond
    2015Acquisition of 360T® trading platform
    2016Launch of Venture NetworkFacilitates financing rounds between investors and growth companies

    Who Are the Deutsche Börse Group Executives?

    The Executive Board of Deutsche Börse Group consists of five individuals who oversee the management of the daily operations of the exchange group.

    Executive Board of Deutsche Börse Group

    NamePositionInformation
    Theodor Weimer
    Theodor Weimer
    Chief Executive OfficerWeimer has served as CEO of Deutsche Börse Group since January 2018.

    Some of his previous roles include: HypoVereinsbank / UniCredit Bank AG, Munich - Spokesman of the Management Board
  • Member of the Executive Committee of Unicredit Croup, Milan (2013-2017)
  • Member of the Business Executive Committee, Unicredit Croup, Milan (2011 -2013)

  • Bayerische Hypo-und Vereinsbank AG / UniCredit Group, München
  • Executive Chairman of Global Investment Banking
  • Designated Spokesman of the Management Board as of January 1, 2009

  • Goldman, Sachs & Co. oHG, Frankfurt/Main
  • Partner, Investment Banking Division (2004-2007)
  • Managing Director (2001-2004)
  • Andreas Preuss
    Andreas Preuss
    Deputy Chief Executive OfficerPreuss is responsible for IT, operations, the data business and the subsidiaries EEX and 360T.

    Some of his previous roles include:
  • Eurex Services GmbH Member of the Management Board (2007-2016)
  • Eurex Zurich AG, Chief Executive Officer (2006-2016)
  • Eurex Frankfurt AG, CEO (2006-2015)
  • Eurex Deutschland, Chairman of Management Board (2006-2015)
  • Gregor Pottmeyer
    Gregor Pottmeyer
    Chief Financial OfficerPottmeyer has served as CFO and a member of the Executive board since 2009.

    Some of his previous roles include:
  • Mercedes Benz, Executive Board Member responsible for Risk Management (2008-2009)
  • Various risk management executive roles at Daimler Chrysler (2002-2007)
  • Hauke Stars
    Hauke Stars
    Executive Board Member
  • Stars has been a member of the Executive Board since 2012
  • She previously held managerial and director roles with Hewlett Packard between 2004 and 2012
  • Jeffrey Tessler
    Jeffrey Tessler
    Executive Board Member
  • Tessler has been a member of the Executive Board since 2004
  • He is responsible for clients, products and core markets and leads Eurex and Clearstream – the two business segments with the highest revenues within the Group
  • Tessler previously served as CEO of Clearstream AG and Clearstream Banking SA
  • Images sourced from: http://deutsche-boerse.com/dbg-en/trader-relations/corporate-governance/executive-board

    How is the Deutsche Börse Group Regulated?

    Deutsche Börse Group touts as its objective the operation of “efficient, secure and transparent markets.” As one of the largest exchange organizations in the world, Deutsche Börse Group operates in a highly regulated environment. Its activities fall under the jurisdiction of many regulatory agencies and laws throughout Germany and Europe.

    Deutsche Börse Group monitors and actively participates in discussions on national and European market regulation and closely follows global regulatory trends.

    The exchange group also produces statements, white papers and studies outlining the challenges regarding market regulation and offering possible regulatory solutions. You can find links to these publications at the regulation section of the Deutsche Börse website.

    Exchange Regulation

    Regulation of Deutsche Börse Group exchanges takes place at three levels:

    1. Exchange
    2. State
    3. Federal

    Organizations at each of these levels complement each other in carrying out the rules of the exchanges and enforcing market regulations.

    Exchange

    The Trading Surveillance Office (TSO) is an independent supervisory body in Deutsche Börse Group.

    Its responsibilities include monitoring the proper conduct of exchange trading as well as the pricing process.

    TSO oversees price fixing on the exchange as well as electronic trading on Xetra® and Eurex®. If TSO notices irregularities in trading, it notifies supervisory bodies and management boards of the exchange. In some cases, TSO notifies BaFIn (see below).

    State

    The state level agency responsible for regulation of Deutsche Börse exchanges is the Exchange Supervisory Authority.

    This organization has similar responsibilities as TSO, but at the state level:

    1. Pricing processes
    2. Supervision of the proper conduct of trading
    3. Investigation of violations of the Exchange Act

    The Exchange Supervisory Authority examines irregularities reported to it by TSO. In addition, it may conduct its own supervision of markets.

    Along with the Disciplinary Committee and the management boards of the exchanges, the Exchange Supervisory Authority may also impose sanctions on market participants. It also approves the rules and regulations of the Frankfurt Stock Exchange and Eurex.

    Federal

    The Federal Financial Supervisory Authority (BaFin) is responsible for investigating cases of suspected insider trading and market manipulation at the federal level.

    BaFiN is an independent federal institution and the financial regulatory authority in Germany. Legislation in 2002 merged three predecessor agencies and empowered BaFin as the principal financial regulator.

    What Products Does Deutsche Börse Group Trade?

    Deutsche Börse Group traders can transact business in three categories of asset classes/products:

    • Cash / Spot market: Transactions in which delivery and payment take place shortly after the transaction is concluded
    • Derivatives: Securities that derive their value from the performance of another instrument such as an asset, index or interest rate. Futures and options are the most commonly traded derivatives.
    • Foreign Exchange: Currency markets
    CategorySub-categoryMarket Facts
    Cash/Spot
    Currency Icon
    Shares/EquitiesExchanges where shares trade:
  • Xetra
  • Frankfurt ExchangeTradegate
  • Exchange traded funds / Exchange traded products
  • ETFs
  • Active ETFs
  • ETCs
  • ETNs
  • ETPs

  • Bonds
  • More than 29,000 bonds trade on Frankfurt exchange
  • About 1,500 German and international government bonds, jumbo bonds, financials, corporate bonds and high-yield bonds trade on Tradegate
  • Funds
  • About 2,900 funds trade on Frankfurt Exchange
  • About 1,500 mutual funds, equity and bond funds trade on Tradegate
  • Structured products, certificates and warrantsA pre-packaged investment strategy based on derivatives including:
  • Single security
  • Basket of securities
  • Options
  • Indexes
  • Commodities
  • Debt issuance
  • Foreign currencies
  • Swaps
  • Commodity spot marketEEX offers:
  • Power spot
  • Natural gas spot
  • Emissions spot
  • Derivatives
    Stocks Icon
    Interest rate
  • Interest rate derivatives
  • Fixed income futures
  • Bond index futures
  • Fixed income options
  • Futures on interest rate swaps
  • LDX IRS Constant Maturity Futures
  • Money market derivatives
  • Equity
  • Equity options
  • Single stock futures
  • Equity indexFutures and options on major global indexes
    FXRolling spot futures and futures and options
    DividendsDividend futures on single stocks or indexes
    Market-on-close futuresTrade on Eurex
    Total return futuresImplied equity repo trading - EURO STOXX 50® Index Total Return Futures
    VolatilityTrade on Eurex
    Corporate bond index futuresCash settled index future with a quarterly expiry
    Exchange-traded productFinancial instruments with ETFs as their underlying
    PropertyDerivatives that replace real property with the performance of a real estate return index
    Eurex/KRXDerivatives based on Korea Exchange (KRX) KOSPI 200 options
    Power commodityDerivatives that provide investment exposure to future power prices
    Natural gas commodityDerivatives markets for natural gas prices in various European and US markets
    Energiewende products commodityRenewable energy derivatives
    Derivatives
    Stocks Icon
    CoalFinancially settled futures for different delivery points
    Environmental markets commodityEmissions auctions and secondary markets
    Freight commodityDry Bulk Freight Futures
    Metals commodityIron ore futures and options
    Agricultural products commodityFinancially settled derivatives contracts:
  • Dairy products
  • Processing potatoes
  • Livestock and meat
  • Fertilizer derivatives contracts (offered for clearing)
  • Eurex Exchange commodity
  • Commodity indexes
  • Exchange-traded commodity derivatives
  • Repo MarketEurex Repo is a leading provider for international financing in the secured money market business (repo and securities lending)
    Foreign Exchange
    Interest Rates Icon
    Foreign ExchangeThrough 360T® traders can trade:
  • OTC financial instruments (mostly FX)
  • Short-term money market products
  • FX and interest rate derivatives
  • How Does the Deutsche Börse Group Conduct Trading?

    Trading models on Deutsche Börse Group exchanges vary by the asset class. However, all venues employ transparent trading models that define for customers the following factors:

    • Order types
    • Price determination rules
    • Matching principles
    • Order handling (or auction types)

    Cash Markets

    1. Xetra
    2. Frankfurt Exchange
    3. Tradegate

    Xetra

    Continuous Trading with Auctions

    Xetra offers the “continuous trading with auctions” service for trading liquid securities. This service combines auctions, which occur three times a day, with continuous trading at other times.

    Traders can enter market or limit orders and specify additional execution conditions and validity constraints (e.g., conditional orders). Traders can consult the Market Model for the Trading Venue Xetra manual for additional details on how Xetra conducts trading.

    Liquidity through Designated Sponsors

    Designated sponsors are banks and broker dealers that are exchange members and provide liquidity in less liquid issues. Designated sponsors must adhere to minimum criteria for posting bids and offers and providing liquidity.

    Frankfurt Börse

    The trading instruments on the Frankfurt Börse necessitate different models for trading than those offered on Xetra:

    Continuous Auction with Specialist

    Since less liquid shares, funds and bonds trade on the Frankfurt Börse, the exchange employs specialists to provide liquidity.

    Continuous Auction with Market Maker

    Market makers make structured products more appealing to trade by adding additional liquidity

    Tradegate

    Tradegate allows order types with intelligent control. This market model is described in the Terms and Conditions section of Tradegate.

    Derivatives Markets

    1. Eurex Exchange
    2. Eurex Repo
    3. EEX Group

    The main feature of the Eurex market model is the central limit order book. Traders enter all orders and quotes into this book during the trading day.

    Eurex

    Eurex traders can enter seven types of orders on the exchange:

    1. Limit Orders
    2. Market Orders
    3. Closing Auction Limit Orders
    4. Closing Auction Market Orders
    5. Book-or-Cancel Orders
    6. Stop Market Orders
    7. One-Cancels-The-Other Orders

    Eurex also supports strategy trading including:

      1. Futures Combinations: time spreads, packs & bundles, strips, inter-product spreads
      2. Standard Options Strategies
      3. Non-Standard Options Strategies
      4. Option Volatility Strategies: Option legs against an underlying futures leg or, in the case of equity options, the exchange of shares

    Traders can consult the Eurex website for additional details about how the exchange conducts trading.

    What Types of Memberships Does the Group Offer?

    Each Deutsche Börse Group exchange has its own individual policies and applications for membership. In addition, each exchange has its own classes of membership. Traders should consult the Deutsche Börse website for specific details.

    Deutsche Börse notes the following about traders and trading companies on the vast majority of their trading venues:

    1. They have to meet strict requirements
    2. They have to be considered reliable
    3. They have to possess the required professional skills (relevant expertise and practical experience) to prove their suitability.

    Training

    Some Deutsche Börse trading venues require examinations of traders as part of the admissions process. Deutsche Börse Group and its related companies offer training courses and examination materials for prospective traders. Information about these courses is available here.

    What Are Deutsche Börse Group’s Margin Requirements?

    Deutsche Börse Group operates two main clearinghouses – Eurex Clearing AG and European Commodity Clearing AG. These clearinghouses act as central counterparties (they are buyers to sellers and sellers to buyers) on all transactions on Deutsche Börse exchanges.

    (* The acquisition of North American Nodal Exchange by Deutsche Börse Group subsidiary EEX Group has added a third exchange for Nodal Exchange customers.)

    Each of these clearinghouses employs the necessary procedures to protect market integrity and safeguard market participants from systemic risk.

    Each clearinghouse also tries to balance market safeguards with the optimization of capital efficiency. Specific margin requirements vary among the clearing houses.

    Eurex Clearing Margin

    Eurex employs two main methods for the calculation of traders’ margin requirements:

    1. Risk Based Margining (RBM)
    2. Eurex Clearing Prisma

    Risk Based Margining

    Eurex previously offered the RBM Calculator, which is a computer-based simulation program to calculate and simulate margin. The program allowed traders to calculate margin on both new and existing positions for listed derivatives, equities and bonds cleared by Eurex Clearing. (Note: Eurex Clearing decommissioned RBM at the end of 2015 and mandated that clients migrate to the newer Eurex Clearing Prisma risk margin system).

    Eurex Clearing Prisma

    Eurex Clearing Prisma is the newest method for calculating margin requirements for exchange participants. Eurex Clearing Prisma offers two different margin calculators for customers of the exchange.

    The Prisma Online Margin Calculator is a browser-based calculator for Members running on Eurex Clearing’s production and simulation environments.

    Prisma Online Margin CalculatorThe Prisma Margin Estimator (PME) is a newer calculator that offers enhanced margin analysis capabilities.

    European Commodity Clearing Margin

    ECC is a Central Counterparty (CCP) licensed under European Markets Infrastructure Regulation (EMIR).

    In the development of its margin system, ECC works closely with partner exchanges, clearing members and the financial supervisory authority.

    ECC uses two main types of margin:

    • Spot Margin: ECC measures credit exposure on a real-time basis 24/7 using Current Exposure Spot Margin (CESM). Spot traders must post Initial Margin Spot Market (IMSM), which serves as a buffer to cover exposure from movements in spot markets. Any margin shortfalls must be covered immediately with additional collateral.
    • SPAN® Margin Model: ECC uses the SPAN® Margin Model to calculate futures and options margin on at least a daily basis. Traders generally have to post initial margin based on the riskiness of a position and any possible offsets ECC may apply. Sometimes ECC will require additional margin to account for factors such as illiquidity, concentration risk in an asset class or other factors.

    Nodal Clear

    Nodal Clear uses an expected shortfall methodology for its initial margin calculations. The calculation is designed to cover an expected two day loss to a 99.7% confidence level.

    What Are the Fees and Charges for Traders?

    Each Deutsche Börse Group exchange has its own exchange and clearing fees.

    Traders can find a list of these fees under the section for each exchange – Xetra, Tradegate and Frankfurt Exchange.

    What Market Data is Available?

    Deutsche Börse Group makes a variety of different types of market data available to its customers. The exchange group also makes regulatory services available to its customers.

    Real-time market data: Market participants can obtain real-time data either directly though the exchange or through authorized vendor partners of the exchange. Deutsche Börse Group offers real-time data in the following products:

    1. Spot markets
    2. Derivatives markets
    3. Indices
    4. Energy and Commodities
    5. European spot markets
    6. Fixed income
    7. FX markets
    8. Asian markets
    9. The exchange group also offers two MiFID services

    Analytics: The exchanges offer real-time order book and trade analytics that cover market liquidity and trends:

    1. Eurex IOC Liquidity Indicator for Options
    2. Eurex Real-time Analytics
    3. Intraday Volatility Forecast
    4. Risk Alerts
    5. Xetra Real-time Analytics

    Historical Data: The exchange provides historical data, which allows traders to back-test trading strategies.

    Deutsche Borse Group Historical Data

    Reference Data: The exchange’s reference data allows vendors to accurately disseminate data to other market participants.

    What Educational Materials Are On Offer?

    Deutsche Börse operates Capital Markets Academy, which offers training in a variety of capital markets subjects. The Academy offers several ways for market participants to learn:

    Training for Exams

    The Academy offers on-site training to prepare market participants for the exams administered by the exchanges. Both the Frankfurt Stock Exchange and Eurex Germany require the certification of traders through examinations.

    Certificate Programs

    The Academy offers on-site certification programs for both clearing and trading. Traders can be certified in two categories: Certified Financial Engineer and Certified Derivatives Trader. Clearing participants can receive a designation as a Certified Clearing Specialist.

    Seminars

    The Academy offers seminars and systems training for trading, back office and capital markets professionals.

    E-Learning

    Traders can obtain basic stock exchange knowledge free of charge at the Frankfurt Exchange website. In addition, the Eurex website offers e-lectures for the Certified Derivatives Trader certificate program.

    Does Deutsche Börse Group Have Vendor Partners?

    Deutsche Börse Group works with many Independent Software Vendors (ISVs) to supply data to market participants. You can obtain a full list of these vendors along with their products and contact information at the Vendor List section of the website.

    Traders can also use the services of outside vendors to connect to Deutsche Börse Group exchanges. Traders can obtain a full list of these vendors here.

    How Can You Get Started Trading?

    Many regulated brokerage firms offer contracts for difference (CFDs) based on products traded on Deutsche Börse Group exchanges.

    CFDs are a derivative instrument that offers retail traders a different way to invest in financial markets. CFDs allow traders to use leverage to bet on the price of financial assets. The value of a CFD is the difference between the price of a financial instrument at the time of its purchase and its current price.

    Many regulated brokers worldwide offer CFDs on shares, commodities, indexes, forex and other financial assets. Customers deposit funds with the broker, which serve as margin. The advantage of CFDs is that traders can have exposure to financial assets without having to purchase shares, ETFs, futures or options.

    Traders can open an account at one of these regulated brokerage firms and begin trading CFDs based on products traded on Deutsche Börse Group exchanges.

    Lawrence Pines is a Princeton University graduate with more than 25 years of experience as an equity and foreign exchange options trader for multinational banks and proprietary trading groups. Mr. Pines has traded on the NYSE, CBOE and Pacific Stock Exchange. In 2011, Mr. Pines started his own consulting firm through which he advises law firms and investment professionals on issues related to trading, and derivatives. Lawrence has served as an expert witness in a number of high profile trials in US Federal and international courts.
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