Why is the IBEX 35 index important to traders?
The IBEX 35 is an index of the 35 largest and most actively traded companies listed on the Spanish stock market. Established in 1992, the IBEX 35 serves as a national and international benchmark index, and the major indicator of Spain’s stock market performance.
The IBEX 35 (SP35) includes the largest and most liquid stocks in the local market, dominated by financial, real estate, oil and energy, and consumer goods companies. Some of the most well-known index constituents include the airline holding company IAG, airport operator AENA; utility companies Endesa and Iberdrola; steel and mining giant ArcelorMittal; and the leading banks Bankinter, BBVA, Bankia, Banco de Sabadell, Banco Santander, and CaixaBank.
Traders like to follow the IBEX 35 index because it can offer exposure to substantial market price volatility and significant day-to-day fluctuations. It also serves as the underlying asset for a wide range of derivative financial instruments. The IBEX 35 is known for its volume and volatility, and attracts numerous day traders trying to profit from short-term price movements.
IBEX 35 trading hours
The IBEX 35 companies are all listed on the Bolsa de Madrid, the major Spanish stock exchange which is open from Monday to Friday. The main trading hours for the IBEX 35 are between 9:00 to 17:35 (GMT+01:00) 5 days a week.
How is the IBEX 35 calculated?
Like other popular stock market indices, the IBEX 35 index tracks a basket of individual companies, and changes in their share prices will affect the index throughout the trading day.
The IBEX index is Euro‐denominated and calculated in real-time during the trading hours of the Madrid Stock Exchange (MSE) within the European time zone.
The index weights its components according to their market capitalisation, adjusted by a free-float factor. Therefore, the biggest constituents enjoy a higher percentage weighting, while the smaller ones have a lower impact. However, IBEX 35 has no top weighting limit for one constituent unlike many other stock market indices.
IBEX 35 admission criteria
The IBEX 35 constituents are generally reviewed twice a year, in June and December, by the Spanish company Bolsas y Mercados Españoles (BME).
Traditionally, the index is made up of the 35 companies with the highest trading volume in Euro during the six previous months, provided that the average market cap of each stock is at least 0.3% of the total market capitalisation of the index.
How to trade IBEX 35 CFDs
The IBEX 35 is a way to gain exposure to the Spanish stock market without having to analyse the performance of individual companies. The Spanish IBEX 35 financial index typically provides traders with a high degree of liquidity, long trading hours and tight spreads.
One of the easiest and most popular ways to trade IBEX 35 index is with CFDs (contracts for difference). A contract for difference (CFD) is a contract between a trader and a broker, used to try and profit from the price difference between opening and closing the trade.
Using CFDs to trade the IBEX 35 will allow you to go long or short the market without having to deal with conventional exchanges. You trade direct with your CFD broker.
No matter whether you have a positive or negative view of the IBEX 35 forecast and predictions, you can try to profit from either upward or downward future price movements.
The index has good volume and volatility as it is made up of a wide cross-section of liquid trading instruments, making the IBEX 35 popular with CFD traders around the world.
Why trade IBEX 35 CFD with Capital.com
Advanced AI technology at its core: A Facebook-like news feed provides users with personalised and unique content depending on their preferences. If a trader makes decisions based on biases, the innovative News Feed offers a range of materials to put him back on the right track. The neural network analyses in-app behaviour and recommends videos and articles to help polish your investment strategy. This hopefully helps you refine your approach when you trade IBEX 35 index.
Trading on margin: Providing trading on margin (20:1 for major indices), Capital.com gives you access to the IBEX 35 index with the help of CFDs.
Trading the difference: By trading CFDs on the IBEX Spanish stock market index, you don’t buy the underlying asset itself, meaning you are not tied to it. You only speculate on the rise or fall of its price. CFD trading is no different from traditional trading in terms of its associated strategies. A CFD investor can go short or long, set stop and limit orders and apply trading scenarios that align with his or her objectives. So whether your view is positive or negative, you can trade IBEX 35 in both directions.
All-round trading analysis: The browser-based platform allows traders to shape their own market analysis and forecasts with sleek technical indicators. Capital.com provides live market updates and various chart formats, available on desktop, iOS, and Android.
Focus on safety: Capital.com puts a special emphasis on safety. Licensed by the FCA and CySEC, it complies with all regulations and ensures that its clients’ data security comes first. The company allows to withdraw money 24/7 and keeps traders’ funds across segregated bank accounts.
Businesses on the IBEX 35
A list of the current companies trading on the IBEX 35 today, correct as of October 2018:
As of the 8 November 2018, the top 5 companies (according to their market cap) included in the IBEX 35 index are: Inditex, Santander, Iberdrola SA, Telefonica, and BBVA.
History of the IBEX 35 index
Maintained and regulated by the Spanish company Bolsas y Mercados Españoles (BME), the IBEX 35 Index was first published in its current form on 14 January 1992.
Historically, the IBEX 35 Spanish Stock Index reached an all-time high of 15, 945.70 in November 2007. The IBEX’s record low of 1, 873.58 happened in October 1992.
The list of other milestone dates for the Spanish major financial index include the following:
On Wednesday, 7 November 2018, the IBEX 35 rose 179 points (or 1.99%) up to 9,168 from 8, 989 in the previous trading session. To follow the most recent ups and downs of the IBEX 35 index, check out our live IBEX 35 (SP35) price chart.
Though the IBEX 35 is the most frequently quoted index for the Spanish stock market, there are a number of other indices, which include mid- and small-cap companies.
- The Madrid Stock Exchange General Index (IGBM)
- The Valencia Stock Exchange General Index
- Barcelona’s BCN-100 – a trade-weighted index of the Catalan exchange's 100 most-traded stocks.
In 2017, the IBEX 35 caused a lot of concern in response to the potential secession of Catalonia from Spain. Some experts even advised their clients to avoid the stocks listed on the Madrid Stock Exchange.
However, most of the IBEX 35 companies don’t show high levels of exposure to Catalonia. According to the research, conducted by the Bolsas y Mercados Españoles (BME), the IBEX 35 companies derive only 34% of their revenues in Spain. For example, Santander (the top IBEX 35 component by market cap) makes twice as much profit in Latin America, as at home. Therefore, the fears and rumours over Catalonia may be overestimated.