Deutsche Börse launches new ShortDAX and LevDAX indices 

Deutsche Börse today expanded its DAXplus strategy index offering with the launch of four new ShortDAX and LevDAX indices. The ShortDAX x9 and x10 indices and LevDAX x9 and x10 indices meet the needs of sophisticated market participants, based on different evaluations of market conditions, who are seeking access to leveraged investments in the DAX when prices rise or fall.

As with the existing ShortDAX indices, the new ShortDAX x9 and ShortDAX x10 indices allow investors to participate in the performance of falling share prices. The performance of each index is directly inverse to the performance of the DAX depending on its leverage factor, which is reflected by the “x” in the index name. For example, when the DAX falls by 5%, the ShortDAX x9 rises by 45%, and vice versa.

In addition to inverse DAX performance, the ShortDAX indices contain interest payments resulting from the investment strategy in proportion to the overnight rate. Interest accrues in the same amount for the investment volume as well as for the funds received from short-selling.

The new LevDAX x9 and LevDAX x10 are directly linked to the performance of DAX and proportionate to its leverage factor. For example, the LevDAX x9 gains nine times the value of the DAX.

All leveraged indices have a protective mechanism in order to prevent a total loss. If an index loses more than 50 percent at a certain time on any one day, the leverage factor will be adjusted ad-hoc and the calculation continued based on the last DAX level prior to the defined point in time. The new strategy indices provide a simple method of above-average participation in market movements.

 

Source: Deutsche Börse Group – Deutsche Börse launches new ShortDAX and LevDAX indices

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