DAX Index

What it is:

The DAX Index is the most commonly cited benchmark for measuring the returns posted by stocks on the Frankfurt Stock Exchange.

How it works/Example:

Started in 1984, the DAX index is comprised of the 30 largest and most liquid issues traded on the exchange. It is a performance-based index, which means that any dividends and other events are rolled into the index's final calculation.

DAX measures performance in terms of order book volume and market capitalization.

Why it Matters:

The DAX is the Frankfurt Stock Exchange equivalent of the DJIA for the New York Stock Exchange. The Frankfurt Stock Exchange is one of the largest in Europe and, accordingly, worldwide.

DAX stands for "Deutscher Aktien Index," in English, the "German Stock Index."

Best execution refers to the imperative that a broker, market maker, or other agent acting on behalf of an investor is obligated to execute the investor's order in a way that is most advantageous to the investor rather than the agent.