What should I know before trading the Spanish IBEX 35 index?
The IBEX 35 is a stock market in the financial sector of Madrid that groups together 35 of the largest Spanish companies under one index name, in much the same way as the CAC40 groups together the 40 largest French companies.
By ‘large businesses’ we refer to those that boast the largest volume of transactions on the Madrid market.
The IBEX 35 was created in 1992 to reflect the general performance of the Spanish economy. For this it takes into account the individual performance of the major stock market capitalisations of the country. This includes major names in Spanish industry such as the BBVA companies or the Santander Group from the banking sector, Iberdrola from energy and Telefonica from telecommunications.
We can therefore say with certainty that the IBEX 35 stock index is a strong indicator of the financial health of Spanish businesses. Of course, the composition of this stock index is not fixed as it is revised every six months by a specific committee composed of experts. It is the ‘Bolsas y Mercados Espanoles’ group that is responsible for this bi-annual revision.
Trading the IBEX 35!{etoroCFDrisk}% of retail CFD accounts lose money - etoro.com
How can I trade and invest in the IBEX 35?
There are several ways of investing in the IBEX 35, each with its own advantages and disadvantages.
Investing in the IBEX 35 index using stocks and ETFs
There are two major ways of investing in the Ibex 35 with a stock market account such as a share account:
- Buying individual stocks: You can buy stocks in the 35 companies that make up the index. This allows you to choose the companies you want to invest in and benefit from the performance of each of them. However, this requires you to follow the performance of the companies closely and take the risk of seeing some of them fall on the stock market.
- Buying ETFs: ETFs (Exchange Traded Funds) are index funds that track the performance of a stock market index. There are ETFs that track the Ibex 35, allowing you to invest in the whole index at once. This diversifies your investment and reduces the risk of investing in a single company.
Trading the Ibex 35 with CFDs
Trading in CFDs (Contract For Difference) is a way of speculating on the rise or fall in the price of an asset, without actually owning it. This allows you to take advantage of short-term market movements, without having to invest the full amount of the asset.
To trade the Ibex 35 with CFDs, you need to take the following steps:
- Open an account with a CFD broker. There are many CFD brokers online. It is important to choose a regulated and reliable broker.
- Deposit funds into your account. You will need funds in your account to be able to trade.
- Choose the type of CFD you want to trade. There are two types of CFD: Up CFDs and Down CFDs.
- Determine the size of your position. The size of your position is the number of CFDs you wish to buy or sell.
- Place an order. You can place a buy order or a sell order.
- Monitor your position. You must monitor your position and close it when you wish.
Trading the IBEX 35!{etoroCFDrisk}% of retail CFD accounts lose money - etoro.com
What is the composition of the Ibex 35 index?
To take things a step further, we now invite you to find out in detail which companies make up the Spanish IBEX 35 index. Here is the list of companies listed on this index of the Madrid Stock Exchange, according to the sector in which they operate:
- Iberdrola in the electricity and gas sector
- Arcelormittal in the industrial sector
- Grupo Santander in the banking sector
- Inditex in the textile industry
- BBVA in the banking sector
- Caixa in the banking sector
- Amadeus in the services sector
- Cellnex in the telecommunications sector
- Repsol YPF in the oil industry sector
- Telefonica in the telecommunications sector
- Ferrovial in the construction sector
- Aena in the aeronautics sector
- International Consolidated in the aeronautics sector
- Red Electrica in the electricity and gas sector
- Acciona in the construction sector
- Endesa in the electricity and gas sector
- Grupo ACS in the construction sector
- Banco Sabadell in the banking sector
- Bankinter in the banking sector
- Banco Popular in the banking sector
- Grifols in the pharmaceuticals sector
- Naturgy Energy Group in the energy sector
- Enagas in the electricity and gas sector
- Merlin Properties in the real estate sector
- Mapfre in the insurance sector
- Immobiliara Colonial in the real estate sector
- Unicaja Banco in the banking sector
- Acerinox in the metallurgy sector
- Compañía de Distribución Integral Logista in the logistics sector
- Fluidra in the capital goods sector
- Indra in the IT and defence electronics sector
- Solaria Energia in the energy sector
- Sacyr Vallehermoso in the construction sector
- Laboratorios Farmaceuticos in the pharmaceuticals sector
- Melia Hotel International in the hotel sector
- Gas Natural in the electricity and gas sector
- Redeia in the energy sector
Useful information about the IBEX 35
Firstly we note that the rate of the IBEX 35 Index has strongly progressed since its initial quotation in 1992, particularly when compared to other European stock market indices.
The opening hours of the Madrid stock market should also be noted if you wish to benefit from the advantageous volatility offered by this asset. This particular financial market is open from Monday to Friday from 9 a.m. through to 5.30 p.m.
Concerning the composition of the IBEX 35 Index that we have already detailed, it is of course liable to change as it is revised twice a year, in June and December. A company only features in this index if it meets certain precise criteria. The 35 companies that feature in this index are however generally those that achieve the highest volumes of transactions in the preceding six months.
It should also be remembered that the IBEX 35 Index is weighted by the stock market capitalisation. The companies with the largest stock market capital feature more strongly in this index than the lesser ones.
Trading the IBEX 35!{etoroCFDrisk}% of retail CFD accounts lose money - etoro.com
How do you analyse the Ibex 35 index before trading it?
Analysing the Ibex 35 index is a crucial step before trading it. It helps you understand the market's strengths and weaknesses, identify trends and make informed trading decisions. Here are some factors to consider when analysing the IBEX 35 index:
Technical analysis of the IBEX 35:
- Charts and indicators: Analysis of charts and technical indicators can provide information on market trends, support and resistance levels, and potential entry and exit points.
- Volume: Trading volume can indicate the strength of a trend and the volatility of the market.
- Cycle analysis: Cycle analysis can identify uptrend and downtrend periods.
Fundamental analysis of the IBEX 35:
- Economic news: Economic indicators such as GDP, inflation and the unemployment rate can influence the performance of the index.
- Company results: The results of the companies making up the IBEX 35 index can have an impact on its performance.
- Sector analysis: Analysis of the different sectors represented in the index can identify the best and worst performing sectors.
- Market sentiment: Market sentiment, i.e. investors' opinion of the market, can influence market direction.
