A Brief IBEX 35 History

The IBEX 35 came into existence in 1992. During the period of 2000-2007 is where the index had its best performance when compared to its other Western counterparts. The economic growth that the index was exhibiting was quite strong, but with the onset of recession, it took a downturn in 2008, but rest assured, it climbed up the ladder just three days down the lane. 

IBEX 35 is an index with a free float capitalization similar to that of the DAX 30. This means that the index price comes with components multiplied by the free float factor, which is usually between 0.1 and 1. IBEX35 doesn’t have any weighted cap for its component stocks, so the stocks that have the highest market capitalization will have an overall influence over the trends and movements of the index.

The formula by which IBEX is calculated is as follows:

How are the stocks that form part of the Ibex 35 index chosen?

The selection of the companies that form part of the index is basically made by an advisory committee called the Technical Advisory Committee, otherwise known as CAT. The committee meets twice a year, in June and December. These meetings also evaluate the standing of companies that are currently on the list. The factors that they consider are as follows:

• Unit price of the shares
• Change in the value of shares in percentages as well as in euros since the previous session of the meeting.
• Volume of the traded shares in euros.
• Market value of the company, especially the number of shares in circulation multiplied by value of each unit.
• PER, an indicator which is reverse in calculation that dictates the RoI provided that the value of shares remain constant.

How do I trade IBEX 35?

There is a consistent strategy that must be in place for trading on IBEX 35. The IBEX 35 is therefore listed as Spain 35. Here are some of the trips that you can follow through on for trading in IBEX 35:

• The first step is to decide on the entry, exit and stop loss. The stop loss orders are kind of prone to short-term fluctuations. The stop orders will be filled but will not have any forecasted effect on the prices. When the stop loss is not in order, it can possibly affect the risk-reward ratio you have planned. Using technical analysis and its understanding before trading in IBEX 35 will help you make meaningful decisions and make sure that you land in the comfortable position for trading.
• Entering into trading prospects before big global events and news is not an ideal position and has to be avoided. It will be ideal to not make or enter into trade while you are at it, so, ideally make the move to invest in IBEX 35 when the dust is settled and you have made an awareness on the understanding of whether the global events affect positively or negatively.
• A firm stop loss is required before making a trade long or short.
• Research successful traders, understand the positive traits of their trade strategies, and implement those strategies or recommendations into your trading strategy as well.
• The exposure to the entire trade should be less than 5%, and hence it will be ideal to not make the entire investment in trade.
• Do not trade in IBEX 35 if you are not that engaged in the trade.

IBEX 35 member companies

• Inditex SA = Value: $109,467 million
• Banco Santander = Value: $107,055 million
• Banco Bilbao Vizcaya Arge = Value: $57,445 million
• Telefonica = Value: $50,883 million
• Iberdrola = Value: $48,837 million

These are the top five companies that are listed in IBEX 35. 

Specifications of IBEX 35

• Country: Spain
• Currency: EUR
• Minimum Trade Size: 1
• Increment: 1.00
• Exchange: MEFF
• MT4 Symbol: IBEX35
• Trading Time: Monday: Friday 08:00 – 18:59