What is the CAC 40 index?
The CAC 40 is made up of 40 of the largest and most liquid companies listed on the Euronext Paris stock exchange and is based on the acronym for Cotation Assiste en Continu (Continued Assistance Quotation) in reference to an early automation platform on the Paris Bourse. It is a free float market capitalisation weighted index capped at 15 per cent weighting and companies must be traded in Euro in order to be included. The constituents are reviewed quarterly, and a selection is made from the top 100 most valuable companies listed on the exchange. The first 35 constituents are selected based on market capitalisation and the remaining five are chosen from the top 35-45 most valuable companies. There is a buffer zone on the selection of the final five, which gives priority to past or current constituents. The CAC 40 is sometimes compared to the Dow Jones Industrial average in the US due to the fact that it is highly representative of the French and European economy as a whole.
CAC 40 index performance
CAC 40 trading began with a base value of 1000 on 31 December 1987 and has a 52-week average of over 151 million transactions per day. The CAC 40 reached its all-time high price of €6625.14 in January of 2000 at the height of the dot com bubble before dropping drastically as the global economy entered a recession. By the time of the great recession of 2008 the CAC 40 had recovered to above 6000 but crashed drastically in the period following. Unlike the majority of other major global indices, the CAC 40 did not surpass its all-time high in the bullish charge of 2019 before the coronavirus wreaked havoc on the global economy. In mid-March 2020, the index dropped sharply as the world markets crashed. It has recovered steadily since the crash in March and the price today can be viewed on the live price chart.
How to trade the CAC 40 index
CAC 40 trading occurs on the joint venture NYSE-Euronext. The merger between the NYSE and Euronext was completed in 2007 following the previous merger of the Amsterdam, Brussels, and Paris stock exchanges. Traditionally, those looking to trade CAC 40 would purchase it directly through the Stock Exchange or through a broker. Traders are also able to purchase multiple structured products with the index comprising the underlying asset. Derivative products based on the CAC 40 index include ETFs, mutual funds, options, futures or tokenised assets.
Traders using the Dzengi.com tokenised platform are able to profit from price movements by purchasing tokenised CAC 40 securities. Tokenised securities are crypto derivatives whose value is linked to the value of a particular asset like a stock, ETF or index. The token is registered using distributed ledger technology (DLT) the same way cryptocurrency is recorded. This technology allows for transactions using crypto without the need of converting back and forth with fiat currency. Utilising this technology makes tokenised security trading efficient, inexpensive and secure.
When buying tokenised stocks you can take a long or short position depending on where you feel the price is heading. If you think the price will decrease you can short the tokenised stock and if you think it will increase you can take a long position. Trading in tokenised securities on Dzengi.com also allows for you to benefit from the leverage offered on the platform, up to 1:100.
Tokenised CAC 40 index trading guide
Trading tokenised CAC 40 index securities is no more difficult than traditional investing. To begin with CAC 40 derivatives, you will follow need to follow some simple steps:
Step 1: Register for an account with Dzengi.com
Step 2: Deposit funds (with crypto or fiat) in the account.
Step 3: Determine the position size desired, accounting for leverage offered by Dzengi.com
Step 4: Determine your position (long or short) based on expected share price movement and purchase tokenised CAC 40 derivatives.
Step 5: Dzengi.com matches the long orders from its clients with the sell orders and then hedges the unmatched orders through Capital.com, LMAX Digital or exchanges such as Binance, Bitstamp, Kraken, NASDAQ, NYSE and Gain Capital.
Step 6: Close your position when applicable. You can set a take profit or stop loss indicator to ensure you are not required to constantly monitor the price. Funds will deposit back to your account after closing and you can withdraw or take a new position.
Why trade tokenised CAC 40 index with Dzengi.com
CAC 40 trading at Dzengi.com tokenised securities exchange has a number of advantages. Tokenised securities are underpinned by robust and immutable blockchain technology. Opening a trade will give you a token that tracks and moves according to the underlying instrument's price.
- One-stop crypto trading platform
Trade CAC 40 with Bitcoin or Ethereum. Benefit from the stock's price movements without turning your crypto assets into fiat.
- Tight spreads
Trade tokenised shares with a tight market spread, benefit from maker rebates and competitive taker fees.
- Leverage
Experienced traders can access the world's top markets, like CAC 40, with up to 1:100 leverage.
- Effective risk management
Manage your risks and secure your profits with stop loss and take profit orders. Save your assets with negative balance protection.
- Instant order execution
We have a scalable and low latency order management system, which can execute 50 million trades per second.
- Safe regulation
Dzengi.com operates under new Belarusian regulation with best-in-class AML and KYC laws. Regulatory details and fees are upfront.
