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The AEX index, what is it?

What is the AEX index?

The AEX stands for Amsterdam Exchange Index . This index is the most important index of the Amsterdam stock exchange and shows the price development of the 25 largest listed companies in the Netherlands. The price of an AEX is an important indicator for, among other things, the economic climate of the Netherlands. A weighted average of the prices of shares is used to calculate the index. The large caps can be found in this index at all times. On regular stock exchange days, the AEX opens at 9 a.m. This is the moment that the opening price of that day is announced.

Investing in AEX

The companies in the AEX are a good start for you as a novice investor if you want to invest in Dutch shares. These companies have already proven to be successful and will therefore carry less risk in most cases. Do you want to know how you can best start investing? You can read this in the following article: How can I  start investing .

Invest directly in AEX

In addition to investing in the companies included in the AEX index, you can also start investing directly in the AEX itself. You can do this by means of  ETFs  or an index fund. These products follow the AEX index one-on-one. This means that you earn the same return as the AEX itself would.

The history

The AEX started on 3 January 1983. The base level was 100 index points. At that time it was known as the EOE index (European Options Exchange index). In just under 30 years, the value of the index has increased approximately eightfold. The peak is currently at over 827 points, which was reached in November 2021. However, the AEX index as we know it today only started in 1994. It was the first index in Europe that could continuously show price developments. The aim behind it was to breathe new life into options trading. The first options exchange would meet a silent death. The introduction made it easier for investors to respond to the price movements of Dutch shares as we know them today.

beleggen in aex

The composition of AEX

The composition of the AEX is constantly changing because the value of the shares of companies also changes. Every year around March, a reshuffle takes place. However, adjustments can still be made to the composition of the AEX during the year. During the reshuffle, experts look at the stock market value of the companies to see if the top 25 is still accurate. For example, there may be companies that are not included in the AEX but have experienced significant growth, making them ‘AEX-worthy’. Companies from the AEX that are surpassed as a result must then take a step back to the  AMX , the Amsterdam Midkap Index. Also read our other blog about the current  AEX companies .

Compare brokers and start index investing

After reading this article, are you interested in investing?  Compare all brokers  via the comparison tool and find out which broker suits you best!

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CFD short position

CFD Trading: Going Long CFD stands for Contract for Difference . This is a simple way to trade that allows you to make the most of your money. A Contract for Difference is a binding contract, where the seller or buyer will pay the difference between the current value of a share and a future value, to the other at the time the buyer chooses to close the contract. Is the value greater? Then the seller of the contract (the broker) pays the buyer. Has the value decreased? Then the buyer must pay more to the seller. A CFD is a derivative , meaning that it derives its value from an underlying asset, often a stock or a market index. As the buyer of a CFD, you do not own the underlying asset and are never entitled to it. It is only used to value the contract. Taking a long position with CFDs ‘ Going long ‘ is simply buying a CFD position when you expect  the stock price  to rise. A ‘long position’ is taken when an investor believes the market will rise. This is a common way to  trade CFDs . Going long in CFDs is similar to the position you would take when buying shares, for example. As a trader, you first buy the position and then sell it at a later date to close out the trade. The difference between the purchase price and the sale price is the profit or loss made on the trade. The opposite of ‘going long’ is ‘going short’ or taking a ‘short position’. In this case you assume a decrease in value from which you can profit. Buy CFD: margin When you go long with CFDs, you don’t need to have enough money to buy the asset you are trading. The amount of money you need, or ‘margin’, depends on  the broker  and what you are trading. For example, for shares you might need 10% and for other securities it might be even less. This leverage allows you to make the most of your money, as the contract still benefits from the amount the asset changes in value. Simply put, if you only put down 10% and the underlying share increases in price by 10%, you have doubled your money. We will illustrate this with an example in which we also include the necessary incidental costs that come with CFD trading. Suppose you expect the shares of company X, which currently cost €1.25, to increase in value. You want to take a long CFD position for 1000 shares. The value of this is €1500, but you do not need that much cash. CFDs of 10% require a deposit of only €150. You also pay a small commission ( a spread ) to the broker. Two weeks later, the shares have each risen to €1.35 and you decide to close the CFD position. For every day that you hold CFDs, interest is charged. In effect, you are borrowing money to maintain your position in the shares. This interest is related to the bank interest rate. For this example, we assume that the interest is €5. You close the position with a profit of 10 cents per share and have to pay a trading commission again. The net profit is 1000 x 10 cents, minus two commissions and the interest, which totals €95. This is a profit of more than 60% of the stake. Long CFD trading, a profitable example To open a long position, you will need to place an order to buy the CFD you want. Each broker will use a slightly different method to place orders, but if you have bought a stock before, it is very easy to make the transition to CFDs. To go short, you need to place an order to sell the CFD. The way the order is placed depends on the broker you use. Opening the position Let’s say company XYZ is listed at €4.24 / 4.25. You expect the price to rise and decide to buy 15,000 shares as a CFD at €4.24. This bid price gives you a position size of €63,600 (15,000 x €4.24). Next, we assume a margin requirement of 10%. When placing the order, €6,360 is allocated from your account to the trade as initial margin. Be aware that if the position moves against you, i.e. the price falls instead of rising, it is possible to lose more than this margin of €6,360. For the same amount, you could only buy 1,500 shares with a regular stockbroker. In this example, commission is charged at 10 basis points (one basis point is 0.01 percentage points). So the commission on this trade is only 0.1% or approximately €63 (15,000 shares x €4.24 x 0.1%). You now have a position of 15,000 XYZ CFDs worth €63,600. Close CFD position A month later, the price of XYZ has risen to €4.68 / 4.69. Your expectation that the price would rise proves correct and you decide to take your profit. You sell 15,000 shares at the bid price, €4.68. The commission of 10 basis points will also apply to the closing of the transaction and amounts to €70 (15,000 shares x €4.68 x 0.1%). The gross profit on the transaction is calculated as follows: Slot level: €4.68 Opening level: €4.24 Difference: 0.44 Gross profit on the trade: €0.44 x 15,000 shares = €6,600. After deducting the commission costs (€63 + €70) from the total turnover, you realise a profit of €6,467. To determine the total profit on the transaction, you must also take into account the commission you paid and interest and dividend adjustments. Long CFD trade, a loss-making example It is also possible that the CFD does not do what you expected in advance and decreases in value while you have opened a long position. With this calculation example we show what the financial consequences of this are. Shares in company ABC are traded for €8.33 / €8.34. You think the price

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Preferred shares

Preferente aandelen geven jou extra voordelen over gewone aandelen. Zeker als je graag een vast dividend ontvangt. Lees meer…

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