IBEX 35: a guide to the Madrid Index
IBEX 35, an acronym for Bursátil Español Index, is the main stock index of the Madrid Stock Exchange.
It is a basket containing the 35 stocks with the largest capitalization, belonging to the four main Spanish markets that occupy different sectors, from banking institutions to telecommunications companies.
In this IBEX guide you will find:
- The main features of this stock market index
- Its components
- The best investment solutions
We will analyze tools such as eToro's Copy Trading, perfect for investing in the index by copying the operations of the best professionals, but also other opportunities that we think you should consider to trade safely.
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IBEX 35, what is that?
Established on January 14, 1992, the IBEX started as the main indicator of the economic status of Spain. As of December 29, 1989, it is calculated in the Spanish stock market with a starting score of 3000.
Between 2000 and 2007 it was one of the most important indices among the Western stock exchanges. In fact, the INDEX index reached its all-time high on 8 December 2008, with a share of 15,945.70 points. On May 10, 2010, the stock recorded the best result ever, increasing its revenues by 14.43%.
Following the historical trend of the Iberian index, there is a strong daily volatility accompanied by significant fluctuations: an interesting attraction for dynamic day traders who are attentive to sudden market changes!
IBEX 35 Index: how to invest
Among the most popular investment solutions are the online CFD trading platforms. It is a faster, easier and more comfortable way to access the different financial markets and reap returns from the most attractive stocks of the moment.
For CFDs (Contracts For Difference) we mean derivative financial instruments that allow you to benefit from the fluctuation of the prices of a given asset, which varies from the moment of opening to closing a position.
In simple terms, these are contracts entered into through the intermediation of a broker that allow bilateral earnings. With the right market forecast, it is possible to make gains even if the market falls!
Such platforms have made the world of finance much more accessible, both in terms of practicality and cost. In fact, brokers provide totally free and commission free services!
An idea of the stock market indices available with CFDs? Here are some of them:
- FTSE MIB
- FTSE 100
- Dow Jones
IBEX 35: the best platforms
Choosing the right platform to start with is the first step to properly try your hand at conscious and winning investments! For this reason, the importance of verifying that brokers are controlled by regulatory bodies of international caliber, such as:
Therefore, perfectly compliant online CFD trading platforms stand out as a free and practical solution to start investing!
eToro is a broker known for its innovative character, it is among the most chosen for the variety of tools it offers, of course, totally free!
It has a friendly and clear interface, which can be used by any type of trader.
The fundamental characteristics of eToro that have totally revolutionized the world of online investments are two: Social Trading and Copy Trading. In fact, this platform was born as the first trading social network through which you can interact with other users!
In addition, novice traders can copy the trades made by other investors, personally chosen and selected!
All their moves will be replicated on their profile. This has a double advantage: earning immediately and being able to learn by observing the best!
The Copy trading function is not a way to make money without knowing what you are doing, but it is a good way to overcome the lack of experience!
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ForexTB is a broker that has now established itself internationally, responding positively to the needs of the more experienced and less connoisseurs.
The strength of this broker, equipped with the necessary regulations, is the training support it offers.
This is a complete e-book on trading: start from the main concepts to get to the more complex ones. Everything is characterized by practicality and simplicity of the technical language, two characteristics that have made this material one of the best downloadable for free!
Those who need to apply the acquired theory have the opportunity to start with a demo account. ForexTB offers a perfect trading simulation to test the effectiveness of the strategies formulated without running any risks, since it operates with virtual money!
The advantages of ForexTB are not over yet: the broker offers free trading signals! These are indications on any market trend, so as to have further support to formulate a correct forecast.Open a free demo account with ForexTB and start practicing now!
Among the assets available at the broker we also mention the convenient Swiss index, the SMI or the Hang Seng.
Trade.com is a broker who is keen to fully support its customers. In fact, it has totally renewed its website, making it easier to use and adaptable to every user.
Trade.com is a multi-asset platform: it offers more than 2100, from commodities, to stocks, to the increasingly traded cryptocurrencies. This allows traders to apply an optimal earning strategy: risk reduction thanks to a diversification of their investments.
The broker in question, however, mainly deals with the training of its users. For this reason, it presents video lessons that are perfect for starting to acquire the fundamentals of trading!
Trade.com is a more than useful support for those looking to invest with the awareness of the risks associated with any possible move. Of course, it allows you to get started with a free and unlimited demo account.Discover all the advantages of Trade.com and access the most promising financial markets!
IBEX 35 Components
As regards the specific case of the main Spanish index, the reviews of the returns of each company take place twice a year: June and December. This operation is essential to replace any companies that do not offer positive results and is left in the hands of the BME, ie the company Bolsas y Mercados Españoles.
The IBEX is a value-weighted index, that is, as for the American Dow Jones, listed companies do not have the same weight. There are only six stocks that really influence its performance and they are the ones that have the greatest importance on the market!
As for the criteria to be met to be part of this index, the main ones are:
- Liquidity of securities;
- Market capitalization;
- Number of shares in circulation.
In addition, the index usually includes the 35 companies that have found, in the previous six months, higher volumes in Euro, provided that the average capitalization of the single stock manages to reach 0.3% of the total capitalization of the index itself.
In fact, within the IBEX, banking institutions play a fairly important role. It includes giants such as Caixabank, Santander and BBVA, now operating throughout the Spanish territory.
The presence of companies related to energy production is interesting, including Endesa which, for 70%, belongs to Enel.
Therefore, not only are these stocks well known, but they branch out into the most important sectors in terms of returns.
This implies a diversification of investments in one of the most liquid indexes currently on the market! More than a winning strategy to be able to reduce the risk margin and be more likely to exploit to your advantage all the potential of a constantly growing stock like this Iberian index.
Extraordinary reviews may be made for a rebalancing of the IBEX in the event of situations such as possible bankruptcies of certain companies. Therefore, they occur on a non-periodic basis but prove necessary to re-establish the trend of the index.
Banco de Santander has been the most important bank in Spain since the 1990s. Its centennial history is made up of acquisitions and mergers, which have led it to expand worldwide with nearly 200,000 employees and over 3 million investors.
Thanks to its retail banking activity, Santander has established itself in the elite of the sector internationally. The recent crisis has put the group’s share price in difficulty, which for some months has however been in sharp recovery.
The levels of early 2020 have not yet been recovered but the upward trend underway for a year now makes this goal achievable.
Repsol is an oil company based in Madrid. According to its business model, Repsol operates across the board, dealing with all sectors of the oil and gas industry.
This means that within it there are divisions dedicated to exploration, production, refining, distribution, marketing and trade for petrochemicals and power generation.
Although the current level is well below the pre-crisis situation of March 2020, Repsol remains stably within the IBEX 35 with rather high volumes. However, the oil sector appears to be recovering, even if the timing will not be very short.
Pharma Mar’s business revolves around pharmaceutical products derived from marine resources.
Its expansion is recent history: after years of commitment to research on how to fight against numerous infectious diseases, the outbreak of the Coronavirus pandemic has allowed the company to significantly increase its business volume, thus joining IBEX 35.
Between 2020 and 2021, the stock saw three peaks that led its value to triple the price recorded just a few days before the stock market crash in March.
If Pharma Mar were to collect concrete successes in the fight against Covid-19, it is likely that its presence within the index will become stable.
IBEX 35 live chart
Let’s take a look at the real-time listing of the IBEX 35, also checking the current trend thanks to the possibility of consulting the recent performances of the Spanish index.
IBEX 35 Forecast
A very common mistake concerns the opinion that the stock market indices are linked exclusively to the securities that comprise them.
In fact, in order to formulate a correct market analysis, in this case, it is necessary to consider external factors that affect the trend of the index in question: the European economic situation, GDP, wars and natural disasters. IBEX performs more than well in stable economic situations in the country and when there are no tensions of a geopolitical nature.
For example, this stock was heavily influenced by the economic uncertainty caused by the Brexit issue, just as it was heavily affected by the Coronavirus crisis. In addition, we also remember the terrorist attacks of 2001 which took place in the USA which weighed heavily on its performance.
In the short term, analysts expect an improvement in the bullish phase: this means that even long positions, using tools such as leverage, could be really profitable.
The IBEX 35 is the benchmark index of the Spanish market, characterized by exponential growth and a strengthening economic framework.
The stock is quoted in euros and it is possible to access the Spanish market from Monday to Friday. The main times for this index are between 9:00 and 17:35.
Of course, thanks to the tools provided by the best platforms, such as graphs and data updated in real time, it is possible to be constantly updated on market changes!
Its meaning is Bursatil Espanol Index and includes the major companies listed on the Madrid Stock Exchange.
Being an index, it does not have a specific physical location, however it refers to the Madrid Stock Exchange as it is an expression of the most capitalized companies.
An important weight is given by the banks: BBVA, Santander and Caixa. Repsol and Iberdrola energy sources are now well-known brands also abroad.
The best method is to rely on eToro to trade both on individual shares and on the entire index, thanks to CFDs.