Xetra - the electronic trading platform of Deutsche Börse

How it all began

The foundation stone for the development of Xetra was laid at the beginning of the nineties with the launch of the European single market. This also brought into force a European passport for securities - a blanket authorisation for banks and securities companies to trade, set up branches and offer their securities in the EU area. Banks could now become participants in a European stock exchange without having to have a local presence on the exchange. This was a major step, since on the one hand, trading on the Frankfurt Stock Exchange had previously been subject to a compulsory presence and, on the other, IBIS, the integrated stock exchange trading and information system used at the time, did not have the technical facilities to handle the expected surge in trading volume.

It was also important to take into account the banks' desire for greater transparency. Until now, stockbrokers on the Frankfurt trading floor have been guardians of transparency, which was not enough for many market participants. The introduction of the open order book on Xetra has decisively improved trading transparency and is still one of its key success factors today.

Protection in extreme situations

In anticipation of extreme market conditions, Deutsche Börse also introduced protective mechanisms with the launch of the electronic trading platform to ensure the integrity of trading in such market situations, independent of human intervention. The most important of these is the volatility interruption. It ensures that exchange trading functions smoothly even in extreme market situations - regardless of whether there are price jumps in the market as a whole or in individual stocks. The aim is to decelerate trading, give market participants time to orient themselves and prevent the market from moving unchecked in one direction.