German Stock Exchanges Explained
Updated Wednesday, August 31, 2022 by TradingHours.com
Germany used to be a fragmented country in over 300 entities, varying in size and form. This fostered a sense of economic independence which is still evident today in the German capital market – with seven different regional stock exchanges.
Xetra is, for all intents and purposes, Germany’s main stock market and this is where most trading occurs. Xetra however is also a platform and software that operates as a separate venue. Xetra is an electronic exchange with headquarters in Frankfurt, it’s owned and operated by Deutsche Börse (which also owns the Frankfurt Stock Exchange as a separate market).
The Frankfurt Stock Exchange is the biggest of the seven regional exchanges, the other six are located in Stuttgart, Berlin, Munich, Hamburg, Hanover and Dusseldorf. With regular stock market trading now occurring mostly on Xetra, the significance of the regional exchanges has declined.
The clearest difference between Xetra and the regional exchanges is in their trading hours, with Xetra’s primary trading phase being from 9am to 5:30pm, while all the primary trading phase of the regional stock exchanges is from 8am to 10pm.
However, regional markets still play an important role in the overall German capital market landscape – they provide a venue for OTC trading of stocks, they list local companies (e.g. smaller breweries), they provide a venue for financing of small and medium enterprises (e.g. bonds and notes). The regional exchanges are also where insurance, real-estate and close ended funds are traded.
Note, we’re only German equity markets in this article. Derivatives in Germany are traded mostly on the Eurex market - which we’ll cover another time.
Xetra - The German Stock Market
Xetra is both the technology (Xetra Trading System) and the electronic stock market (Xetra MIC: XETR). Most commonly Xetra refers to the electronic stock market, which is Germany’s main market.
The Deutsche Börse Group is Xetra’s owner and operator, the Group also owns Eurex and the Frankfurt Stock Exchange. When trading German stocks, it’s more than likely you’ll be trading on Xetra, where 90% of total trading in Germany happens.
Frankfurt Stock Exchange (Börse Frankfurt)
Headquartered in Germany’s financial center, the Frankfurt Stock Exchange is by far the largest of the country’s regional exchanges (all of them being smaller than Xetra). Significantly, the exchange has a venue which is targeted mainly to private investors.
Stuttgart Stock Exchange (Börse Stuttgart)
The Stuttgart Stock Exchange is Germany’s second largest stock market. Notably, Stuttgart has a high trading volume in bonds, and the highest in SME bonds – in its “Bondm” market segment. Interestingly, Börse Stuttgart owns Nordic Growth Market (Norway's second largest market).
Berlin Stock Exchange (Börse Berlin)
With headquarters in Germany’s capital, the Berlin Stock Exchange provides a venue for private investors, and operates the trading systems Xonto and Equiduct - with ambitions to compete with Eurex and Xetra in the future. Berlin also operates Tradegate Exchange (60% owned by Deutsche Borse), which has been in operation since 2009 - this is an electronic market targeting private investors.
Munich Stock Exchange (Börse München)
Located in the Bavarian capital, the Munich Stock Exchange provides full access to German stocks, bonds and other equities but is most famous for listing local Bavarian breweries. Additionally, it is a significant venue for OTC trading through its m:access venue. The Exchange is one of the top locations for financing for Small & Medium Enterprises. Historically, companies like BMW, Allianz, Munich Re, Infineon and Siemens have made their IPOs on the Munich Stock Exchange.
Hamburg Exchange (Hamburger Börse)
Located in Germany’s northern economic center, this five century old exchange is still in operation for the trading of stocks, insurance, grain and real-estate. The Hamburg Exchange was the first of the BOAG Group, along with Dusseldorf and Hannover. BOAG was created to support the three exchanges in their business.
Hanover Stock Exchange (Börse Hannover)
The Hanover Stock Exchange also belongs to the BOAG Group, and the small Exchange benefits from the Group’s support. Along with the regular stock market offer, it notably lists small Lower Saxony companies and also provides a venue for trading Close Ended Funds.
Dusseldorf Stock Exchange (Börse Düsseldorf)
The Dusseldorf Stock Exchange was the latest to enter BOAG. Most notably the Exchange offers commission-free trading of all German shares and bonds. Also it offers a “primary market” segment that ensures a particularly high level of transparency from the point of view of investor protectionists.
Summary
To summarize it very briefly, Xetra is Germany’s main stock market. There are seven additional regional markets in Frankfurt, Stuttgart, Berlin, Munich, Hamburg, Hanover and Dusseldorf, all of which serve niche needs of the German capital market. Eurex is a separate market where the majority of derivatives are traded.
One impartant way in which Xetra and the regional exchanges are separated is in their trading hours, Xetra’s primary trading phase is from 9am to 5:30pm, while all the regional stock exchanges have a primary trading phase from 8am to 10pm.
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