What is Xetra?

The Frankfurt-based electronic German stock market is known by its acronym, Xetra. The Deutsche Börse Group is the owner and operator of the system. The trading platform, introduced in 1997, allows users to trade stocks, funds, bonds, warrants, and commodities futures electronically.

In addition to around one-third of exchange-traded fund (ETF) trading in continental Europe, Xetra processes most deals made in Germany. Every time they execute an agreement, investors using Xetra may benefit from its minimal fees, excellent transparency, and speedy execution times.

Comprehending Xetra

Xetra is an entirely electronic trading platform, as was previously indicated. The Deutsche Börse Group, which has its headquarters in Frankfurt, Germany, owns the Frankfurt Stock Exchange (FRA), also known as the Frankfurter Wertpapierbörse. 1. The Deutsche Börse Group is a multifaceted company offering a variety of goods and services throughout the whole value chain of the financial sector. Listing, trading, clearing, and settlement are all included in this, in addition to custody services and liquidity management.

One of the first international electronic trading platforms, Xetra, was established in 1997 and has since expanded to handle most stock transactions on the FRA. In actuality, Xetra facilitates more than 90% of all share trading in Germany. This is in addition to the roughly thirty percent of ETF trading in continental Europe.

The Xetra platform provides greater flexibility in observing order depth inside the markets. Additionally, since it is an entirely electronic platform, investors may take advantage of minimal fees, excellent transparency, and quick order response times. This is particularly true for actively traded shares, such as those listed on the DAX. This index represents forty of the largest and most liquid German companies that trade on the FRA.

The Xetra electronic trading platform is open for business from Monday through Friday from 9:00 a.m. to 5:30 p.m. local time. Major holidays are not used for trade. The platform holds an opening auction every day at 8:50 a.m. and a closing auction at 5:30 p.m.

The total number of traders on Xetra as of July 2022, with around half having German addresses.

Comparing Xetra with Other Online Trading Platforms

Even though Xetra is among the most prominent electronic trading platforms globally, there are others besides this, and they were also the first to provide the convenience of automated trading.

Introduced in 1969, Instinet (formerly known as Institutional Networks) was the first automated system for direct trading between U.S. institutions. In 1971, Nasdaq introduced its computerized system in response. Trade orders were placed over the phone on this and other such systems.

With the introduction of the Designated Order Turnaround (DOT) system by the New York Stock Exchange (NYSE), brokers may now route orders straight to floor experts. When SuperDOT was established in 1984, the maximum number of shares that could be delivered to the floor was increased to around 100,000. In an attempt to rival the NYSE, Nasdaq quickly introduced the Small Order Execution System (SOES).

In today’s financial market, electronic trading is quite popular. Because of the development of the internet, it now predominates over physical trading activity in public marketplaces. Trading on an actual trading floor is unavailable on many exchanges. Instead, electronic markets like Xetra are where most worldwide trading occurs. However, there are dangers, most notably increased cybersecurity concerns.

While individuals are still susceptible to cyberattacks, more prominent organizations like corporations and governmental networks are often the primary targets of these assaults. The U.S. Department of Homeland Security uses high-tech cybersecurity methods to protect private government data from foreign governments, nation-states, and lone hackers. Exchanges and other financial systems that retain customer credit card information are also vulnerable.

Conclusion

• The Deutsche Börse Group runs a trading technology platform known as Xetra.
• The platform was introduced in 1997 and now handles over 90% of all share trading at all German exchanges.
• One of the first international electronic trading platforms, Xetra, continues to list on the DAX.
• It allows for more freedom when observing order depth in the markets and provides trading in warrants, commodities contracts, stocks, funds, and bonds.
• Besides significant holidays, trading takes place Monday through Friday from 9 a.m. to 5:30 p.m. local time.