FRA40 in 60 seconds
FRA40 is the LHFX ticker for the CAC 40, the 40 largest free-float weighted companies on Euronext Paris. Luxury houses LVMH, Hermes, Kering and L'Oreal frequently combine for above a quarter of the index, the heaviest single-sector concentration in any major European benchmark. Trade as a CFD on MT5 with leverage up to 1:200, a flat $3 per side commission, USD settlement and STP/ECN execution. Daily ranges sit between 0.6 and 1.2 percent in calm regimes; ECB pressers, Asian luxury data and Paris politics can push that to 2 to 3 percent. Spreads are tightest from 03:00 to 11:30 ET, which matches the Paris cash session.
What FRA40 Tracks
Strip away the ticker and FRA40 is a single number that summarises how 40 chunks of French corporate ownership are being repriced from minute to minute. Euronext Paris does the maintenance work: it selects the 40 names, calculates a free-float-adjusted market value for each one, sums them, and runs a divisor that smooths out events like rights issues and constituent swaps so the number stays comparable across decades.
The base level is 1,000 points, set on the last trading day of 1987. Every 100 points you see on the chart today is therefore a multiple of that starting basket. If FRA40 is quoted around 7,800, the basket of selected French companies is worth about 7.8 times what it was worth at launch in nominal terms.
The index is a price index, not a total return index. Cash dividends paid by constituents are not reinvested into the published level. That single design choice matters when you compare long-run charts: a side-by-side line of FRA40 against GER30 (which is total return) will visually understate how French equities have actually performed for buy-and-hold owners. For a CFD trader holding positions for hours or days, the practical effect lives in the dividend adjustments applied on ex-dividend dates.
Key point: FRA40 is a price index. Cash dividends paid by CAC 40 constituents reduce the index level on ex-dividend days rather than being reinvested into the calculation. The CAC 40 GR (gross return) version exists in parallel and reinvests dividends gross of tax, but the headline CAC 40 that LHFX prices is the price version. Over a decade that gap compounds into a 30 to 40 percent difference.
Top FRA40 Constituents
Weights move every session, but the names sitting at the top of FRA40 are remarkably stable across years. The index is free-float market-cap weighted with a 15 percent cap per name, applied at quarterly review. Always verify current weights via Euronext index data before sizing a position.
| Ticker | Company | Sector |
|---|---|---|
| MC | LVMH Moet Hennessy Louis Vuitton | Luxury Goods |
| RMS | Hermes International | Luxury Goods |
| KER | Kering | Luxury Goods |
| OR | L'Oreal | Cosmetics |
| BNP | BNP Paribas | Banking |
| GLE | Societe Generale | Banking |
| CS | AXA | Insurance |
| TTE | TotalEnergies | Oil and Gas |
| AIR | Airbus | Aerospace |
| SAF | Safran | Aerospace and Defence |
LVMH has been clipped by the 15 percent cap in past cycles after long luxury bull runs. Below the top 10, names like Schneider Electric, Sanofi, EssilorLuxottica, Stellantis, Air Liquide, Vinci, Pernod Ricard, Capgemini, Danone and Dassault Systemes rotate through the upper tier depending on share-price moves and free-float adjustments.
Sector breakdown
Luxury and cosmetics typically account for 25 to 30 percent of FRA40 in strong years, the heaviest single-sector concentration in any major European benchmark. Banks and insurance add another 10 to 14 percent. Energy and utilities (TotalEnergies, Engie, Veolia) sit at 8 to 11 percent. Aerospace, industrials and autos cover 12 to 18 percent. Healthcare and consumer staples round out 8 to 12 percent. That mix is why FRA40 reacts to Asian luxury data, ECB rate decisions and Brent moves more than to French consumer confidence.
How FRA40 Is Calculated
FRA40 uses a free-float-adjusted market-capitalisation method. Two numbers matter for each constituent: the share price, which changes every tick, and the free float, which is the proportion of outstanding shares actually available for ordinary investors to buy after locked-in family stakes, government holdings and strategic blocks are stripped out.
For a France-listed index this matters more than for an American one because several of the largest French companies still have founding families or state entities holding tens of percent of shares. The Arnault family owns roughly half of LVMH directly and indirectly. The Hermes family controls a clear majority of Hermes through a holding structure. Treating those companies at headline market cap would distort the index toward names that very few outsiders can actually purchase, so the float adjustment trims them down to what is investable.
The second guardrail is a hard 15 percent weight cap applied at every quarterly review (March, June, September, December). When a constituent's float-adjusted market cap pushes its weight above that line, the calculation council scales it back to 15 percent at the next rebalance. LVMH has been clipped by the cap in past cycles after long luxury bull runs. Without that cap, a single Paris-listed name could end up driving more than a fifth of the index, which would make FRA40 closer to a tracked single stock than a diversified benchmark.
Review windows are also when the council can swap a constituent out and a new one in, based on free-float market cap and trading volume tests over the prior twelve months. Promotions and relegations tend to be quiet news on the index itself but can move the individual stocks involved by several percent on the announcement date.
Why this matters: Without the 15 percent cap, LVMH alone could push past 18 to 20 percent of the index during luxury bull runs. That would make FRA40 closer to a tracked single stock than a diversified benchmark. The cap forces the index to stay broad even when one cluster is dominating market action, which is exactly why luxury-heavy moves do not run as far on FRA40 as they would in an uncapped basket.
Trading Sessions and Hours
Paris cash hours are 09:00 to 17:30 Central European Time, which is 03:00 to 11:30 Eastern. That window concentrates roughly two thirds of FRA40's daily traded volume and is where spreads tighten to their narrowest values. Order flow is dominated by European institutional desks rebalancing books and reacting to the same European data prints.
Outside the Paris window the spreads widen because the underlying market is closed and pricing leans on related futures and ADRs. Asian session ranges tend to be quiet unless a major Asian data point or earnings event from a luxury house reporting overseas triggers reaction in pre-market.
Paris cash session (regular hours)
9:00 AM to 5:30 PM Paris time (3:00 AM to 11:30 AM ET in summer, 4:00 AM to 12:30 PM ET in winter). This is when the underlying CAC 40 components trade on Euronext Paris and the index updates from live prints. Spreads on FRA40 CFDs are tightest here. The morning opening auction and the closing auction at 5:30 PM Paris are the two most concentrated bursts of activity, and the closing auction in particular sets the official daily reference price.
European CFD hours (futures-driven)
Outside the Paris cash session, FRA40 CFD pricing follows the FCE futures contract on Euronext Liffe Paris, which trades from roughly 8:00 AM to 10:00 PM Paris time. Spreads widen by 50 to 100 percent versus the cash session. Avoid market orders in the opening minutes of futures-only pricing because the bid-ask can drift while liquidity providers calibrate.
US session overlap
From 9:30 AM to 11:30 AM ET (the first two hours of the US cash session) FRA40 is still inside Paris hours, which produces strong cross-Atlantic flow. SPX500 and US30 reactions to US economic data (CPI at 8:30 AM ET, ISM at 10:00 AM ET) often spill into FRA40 in real time, and this overlap is often the highest-volatility window of the day.
Asian overnight
FRA40 CFD pricing is live during the Asian session via FCE futures. Liquidity is thin and spreads can widen sharply on China data releases or unexpected luxury-house headlines from Asia. Most reaction to overnight Asian news shows up at the Paris open the next morning rather than during the futures session itself, so positioning ahead of a major Asian print needs an explicit gap budget.
FRA40 typically prints 0.6 to 1.2 percent daily ranges in normal conditions. ECB decision days (8 times per year at 2:15 PM Frankfurt), Asian luxury data prints, French parliamentary calendar events and the four LVMH and Hermes earnings nights per year can push that to 2 to 3 percent same-session moves.
What Drives FRA40 Price
If you trade FRA40 without a mental map of its sensitivities, you will misread half its moves. The catalysts that matter most fall into five buckets, each tied to a different cluster of the index.
Asian luxury spending
Quarterly trading updates from LVMH, Hermes and Kering set the tone for the whole index. The same names also react to Asian retail sales prints, tourism flow numbers between Asia and Europe, and any change in luxury-tax policy in big shopping hubs. A weak Asian luxury read can push FRA40 lower by 1 to 2 percent even on a session when the broader Eurozone tape is green.
ECB decisions and Lagarde guidance
Rate decisions every six weeks, the accompanying statement and the press conference that follows all move FRA40 in line with peer Eurozone indices. The French banking weight gives the index an extra leg on each move because net interest margin guidance from BNP and SocGen tracks the rate curve closely. A 25 basis point surprise typically produces a 1 to 1.5 percent same-day move.
Paris political calendar
Confidence votes, budget impasses, snap elections, prime ministerial changes and ratings actions on French sovereign debt produce single-session moves you will not see in GER30 or EUSTX50 on the same day. The 2024 to 2025 budget standoff is a recent textbook example, opening with a clear gap on the morning after the vote. Same-session gaps of 1 to 3 percent are realistic on the morning after a confidence vote.
Brent and TotalEnergies
TotalEnergies sits among the heaviest single names in the index. An OPEC+ surprise, a supply disruption in the Middle East or an inventories report that shifts the curve translates almost immediately into a TotalEnergies price move and from there into FRA40 direction. The transmission is fast enough that FRA40 will move on the headline before broader European indices catch up.
Aerospace order books
Airbus is high-weight and its share price is sensitive to airline order announcements, Boeing's competitive position, and defence-spending decisions across European capitals. A multi-decade firm order at the Paris Air Show, or a regulatory move against Boeing, will show up in FRA40 within an hour. Safran, which supplies engines, moves in close correlation on the same headlines.
FRA40 CFD vs CAC 40 Futures vs Paris-Listed ETF
Buying CAC 40 exposure is not a single product decision. The three common routes each suit a different style and account size, with different mechanics around expiry, leverage, dividends and cost.
| Product | Expiry | Leverage | Settlement | Cost per round trip |
|---|---|---|---|---|
| FRA40 CFD (LHFX) | Open-ended, no roll | Up to 1:200 | USD on MT5 account | Spread plus $3 per side |
| CAC 40 futures (Eurex) | Quarterly, third Friday of March, June, September, December | Implicit via margin, often 1:10 to 1:25 | EUR on Eurex contract | Exchange and broker fees, often 5 to 15 EUR per contract |
| Paris-listed CAC 40 ETF | None (you own the units) | None unless leveraged ETF wrapper | EUR on European-listed tracker | Brokerage both sides plus annual fee around 0.20 percent |
For a retail account testing a thesis on French luxury or Paris politics, the CFD route generally wins on minimum size and on the ability to flip direction without margin penalties. Futures suit larger directional bets where the expiry calendar is acceptable. ETFs suit longer holds where you want dividends and have no taste for daily mark-to-market.
Note the settlement currency: FRA40 settles in USD on LHFX, while the futures and ETF routes both settle in EUR. For a USD-based account that means an FRA40 CFD trade carries no extra euro conversion step on entry or exit, but the underlying euro-priced index level still affects how international investors value the constituents.
Trading FRA40 at LHFX
At LHFX you trade FRA40 as a CFD on MetaTrader 5 with STP/ECN execution. The contract follows the CAC 40 (price index) so dividend adjustments are posted on ex-dividend dates rather than reinvested into the level. Specs below.
Up to 1:200. Given FRA40's sensitivity to Asian luxury data, ECB decisions and Paris political headlines, most experienced traders use effective leverage in the 1:15 to 1:25 range so that a 2 percent same-session move costs no more than 2 to 4 percent of account.
$3 per side, $6 round turn per 1.0 lot. Spreads typical during the Paris cash session.
MetaTrader 5. Add FRA40 to Market Watch from the symbol list under Indices.
STP/ECN routing on MT5. No dealing desk, no requotes during normal liquidity. Standard slippage applies on news releases and outside Paris cash hours.
Sunday 5:00 PM ET through Friday 5:00 PM ET, with a brief daily maintenance break. Tightest spreads 3:00 AM to 11:30 AM ET (Paris cash session).
Typically tightest during the Paris cash session and widens by 50 to 100 percent during futures-only hours and around major economic releases or Asian luxury earnings nights.
A worked sizing example
Suppose FRA40 is quoted around 7,820 and you want to express a moderately bullish view ahead of a luxury-sector earnings cycle. You decide on a position of 0.03 lots on a $2,500 starting balance. At 1:200 leverage the margin requirement is in the rough order of 12 to 14 USD (verify the live contract spec in MT5 before clicking). Place a stop loss 90 index points below entry at 7,730 and a take-profit 180 points above at 8,000, giving a two-to-one reward-to-risk shape. A 90-point adverse move on 0.03 lots equates to roughly 27 USD, around 1.1 percent of the account; a 180-point favourable move clears about 54 USD, around 2.2 percent. Round-trip commission is $6.
For the live FRA40 instrument page, current spreads and fees, and detail on leverage rules, see the linked pages.
Key Risks for FRA40 Traders
FRA40 carries a different risk profile from US-centric indices. Four factors do most of the damage when they move against a position, and each maps to a specific cluster of the index or a calendar event peculiar to Paris.
Single-cluster luxury risk
Because four houses can combine for a quarter of the basket, a single weak earnings cycle in that cluster can drag the whole index even if banks, energy and industrials are performing. You can be correct on the Eurozone macro thesis and still be underwater on FRA40 because the luxury leg broke. Build that scenario into your sizing before you open the position, not after the print.
Paris political tail risk
France runs a parliamentary system that produces budget standoffs, snap elections and ratings reviews on a different rhythm to Germany or the Netherlands. Same-session gaps of 1 to 3 percent are realistic on the morning after a confidence vote. If you cannot afford a gap of that size at your current position, either reduce size before the calendar event or close out and re-enter once the result is known.
USD versus EUR translation noise
Your account settles in dollars and the underlying index moves in euros. A sudden EUR/USD shock can change the dollar amount of your gain or loss even if the index level barely moves between two prints. This is not a true risk for short intraday holds but it is meaningful for positions held across multi-day macro events like an FOMC and ECB meeting in the same week.
Leverage on a volatile index
1:200 maximum leverage means a 0.5 percent adverse move equals 100 percent of margin posted on a maximum-leveraged position. Given FRA40 routinely prints 0.6 to 1.2 percent daily ranges and 2 to 3 percent on luxury-earnings or political-calendar days, effective leverage above 1:30 leaves very little room before stop-outs trigger.
Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.