Xetra is a completely electronic trading system. The name is an acronym for Exchange Electronic Trading. It was created in 1997, is based in Frankfurt, Germany, and is operated by the Deutsch Börse Group.
Initially, it was developed to be used on the Frankfurt stock exchange; however, it eventually expanded to several other stock exchanges in different countries in Europe and even on other continents.
The Deutsch Börse Group
This group, in addition to being responsible for Xetra, is also behind two other trading “channels”: Börse Frankfurt and Tradegate Exchange. Each of them is best suited for trading certain types of assets and for use by certain investor profiles.
Objectives of Xetra
Xetra was developed with the objective of making the market more efficient. It allows to reduce costs with financial transactions, in addition to offering a range of features that is always growing, as the system receives periodic updates.
According to the Deutsch Börse Group itself, at Xetra it is possible to “buy and sell the most important German and international shares […], in addition to exchange-traded funds (ETFs), exchange-traded commodities (ETCs) and exchange -traded notes (ETNs) “.
The use of Xetra for trading takes place from Monday to Friday, from 9:00 am to 5:30 pm.
Importance of Xetra
Xetra was one of the first electronic trading systems in the world. At the time, he was the successor to the IBIS platform. Today, it is used in over 90% of all transactions on the Frankfurt Stock Exchange, the Frankfurt stock exchange.
It is also important to highlight that Xetra is one of the main responsible for opening German financial markets to foreign investments.
In addition, as previously mentioned, the system is currently used in other locations. In total, 18 countries adopt it. Xetra can be found on stock exchanges in Ireland, Austria and even Shanghai.
Digital stock exchange?
What is most confusing about Xetra is that it is not treated simply as a system for carrying out transactions on the stock exchange. In fact, it is treated as a true and autonomous digital stock exchange.
An example of this is that, in mid-2019, it was reported that Xetra “listed” its first Blockchain company . Listing companies is something that is associated with stock exchanges; Listed companies are those that have their shares traded on a certain exchange.
Despite the confusion, the general understanding is that it is not a stock exchange. Börse Frankfurt and Tradegate Exchange, which, as we have seen, are other solutions of the Deutsch Börse Group, neither.
Strictly speaking, only the Frankfurt Stock Exchange is a stock exchange, while Deutsch Börse solutions are channels for trading assets.