German stock exchange, ETR vs FRA

Question

I am looking at the BMW stock for instance in google finance.

Presented are two tickers:

ETR:BMW https://www.google.com/finance?q=ETR%3ABMW&ei=uNGuU-CSGeP3wAPw-IC4Cg

and

FRA:BMW https://www.google.com/finance?q=FRA%3ABMW&ei=vdGuU8mgF6qpwAPCsoHQCQ

There is a price difference since 2009. The FRA has grown about 55% but the ETR has grown around 80%.

Now, I own BMW stock, but I can't really see in my terminal which one I actually own.

My understanding is that ETR is a trading system, called XETRA while the old one, FRA referes to the price on the Frankfurt Stock Exchange.

I still can't understand why there is a price discrepancancy.

Which one is the preferred stock to own, and why?

Answer 1

I still can't understand why there is a price discrepancancy.

There isn't. It's the same stock and price differences between such major exchanges will always be minimal.

I think you simply haven't paid attention to the date range. It seems Google finance only has data for FRA:BMW reaching back to 2011, so if you try to look at the development of your investment since 2009, you're not getting comparable data.

Answer 2

I stumbled on the same discrepancy, and was puzzled by a significant difference between the two prices on ETR and FRA. For example, today is Sunday, and google shows the following closing prices for DAI.

FRA:DAI:

Date            Open    High    Low     Close   Volume
Nov 20, 2015    78.55   79.50   78.50   79.36   8,910

ETR:DAI:

Date            Open    High    Low     Close   Volume
Nov 20, 2015    79.16   79.60   78.60   79.25   3,076,967

So it looks like there are indeed two different exchanges trading at different prices.

Now, the important value here, is the last column (Volume). According to Wikipedia, the trading on Frankfort Stock Exchange is done today exclusively via Xetra platform, thus the volume on ETR:DAI is much more important than on FRA:DAI.

Obviously, they Wikipedia is not 100% accurate, i.e. not all trading is done electronically via Xetra. According to their web-page, Frankfort exchange has a Specialist Trading on Frankfurt Floor service which has slightly different trading hours.

I suspect what Google and Yahoo show as Frankfort exchange is this manual trading via a Specialist (opposed to Xetra electronic trading).

To answer your question, the stock you're having is exactly the same, meaning if you bought an ETR:BMW you can still sell it on FRA (by calling a FRA Trading Floor Specialist which will probably cost you a fee).

On the other hand, for the portfolio valuation and performance assessments you should only use ETR:BMW prices, because it is way more liquid, and thus better reflect the current market valuation.