All of them include different multipliers, which will impact the potential gains or losses after each trade. For example, let’s say you short sell a Dow Jones futures contract. This contract has a DJIA value of 20,000 and a standard contract size of $10x the DJIA. Let’s say that on the final settlement date, the DJIA is trading at 20,400. Using a multiplier of 10, you owe the counterparty $4,000 (400 x$10). Futures trading involves the substantial risk of loss and is not suitable for all investors.

Other futures contracts may be settled with physical delivery, such as agricultural goods, oil, gold, and other commodities. E-mini options on the Dow Jones Industrial Average Index are American-style options, meaning that they can be exercised at any point before https://topforexnews.org/brokers/maxfx-1-royalty-free-photos-pictures-images-and/ expiration. Exercising the option results in the “physical” delivery of a corresponding position in the underlying cash-settled E-mini futures contract. The YM offers traders exposure to the 30 US-based blue-chip companies which compose the DJIA Index.

E-Mini Dow Continuous Contract

The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc. If you’ve ever listened to a financial market news broadcast, you’ve probably heard a reference to ‘futures trading.’ Many traders keep track of the futures market.

Trading Dow Jones Futures can certainly be a useful tool for an investor. Although it’s probably best for experienced traders who fully understand market fluctuations. They can also better absorb potentially big losses if DJIA’s value doesn’t go as expected by the final settlement date.

Why trade futures?

When combined with our sophisticated trading platforms and institutional level trading infrastructure you have access to instant fills for futures trading. Try a free demo on our trading platforms with real-time quotes and charts. Simply put, the person buying the futures contract makes money if the index value increases. Whereas the party selling the futures contract makes money when the index decreases in value.

• The Mobile app’s Charts deliver the analytics you need for sophisticated strategies, without needless complexity that just slows you down.
• This contract has a size of $10 multiplied by the closing value of the DJIA.
• Choose between many native strategies, such as Trailing Stops, OCO, Brackets and many more, or create your own with custom formulas.
• The Dow tracks 30 blue-chip U.S. stocks from nine sectors, ranging from industrials to healthcare to consumer staples.

References to over-the-counter (“OTC”) products or swaps are made on behalf of StoneX Markets LLC (“SXM”), a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. SXM’s products are designed only for https://day-trading.info/what-causes-a-bond-s-price-to-rise/ individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member of FINRA/NFA/SIPC and registered with the MSRB.

What Is the Difference Between the Dow Jones and Dow Jones Futures?

Still, Dow index futures are a popular tool for getting broad-based exposure to U.S. equity or hedging such positions. For stocks, tick sizes are fairly straightforward—basically, it’s dollars and cents times the number of shares. But for stock index futures based on the S&P 500 Index (SPX) and other benchmarks, it’s a different sort of game. E-mini Dow futures allow you to hedge your macro exposure or capitalize on anticipated movement in the DJIA Index, especially around major market-moving events.

Also, since our platform uses completely unfiltered tic data, you can be assured that you see live trades the instant they are filled. Trade the Micro E-mini’s now and have access to aggressive day trade margins. It appears that only the E-Mini and Micro E-Mini Dow Jones Futures contracts are actively traded these days, so we’ll focus on them for the rest of the article. This contract offers the highest leverage with a contract size of $25 multiplied by the closing value of the DJIA. So if the Dow Jones closes at 25,000, the contract value will be $625,000 (25,000 x 25). When two parties agree to trade a Dow Futures contract, one party bets that the underlying index’s market value (i.e., DJIA) will decrease.

The DJIA Futures Contract (Product Code: ZD)

Gain exposure to 30 of the largest companies in the U.S. while trading a single contract with our E-mini Dow ($5) products. Representing a portion of the standard Dow Jones Industrial Average futures, these E-mini products allow you to short the index without stock loans https://currency-trading.org/education/top-10-free-options-trading-courses-2021/ or variable fees. Enjoy added flexibility and efficiency with the ability to execute a basis trade relative to the official close. The risk of loss in online trading of stocks, options, futures, currencies, foreign equities, and fixed Income can be substantial.

Discover the benefits of futures, for a fraction of the upfront financial commitment. An index tracks and measures the price of a collection of assets, such as a group of stocks. Index futures are derivative financial contracts, meaning they derive their value from an underlying asset, in this case, the index. Index futures can be bought and sold and their value changes with the value of the index.

Generic Trader Desktop

It is also possible to partially close out of a position if you have more than one contract—for example, selling three of five contracts originally bought, leaving a position of two contracts open. Key considerations when choosing a broker are the ease of the trading platform, commission charges, customer service, features such as news and data feeds, and analytical tools such as charts. Data are provided ‘as is’ for informational purposes only and are not intended for trading purposes. Data may be intentionally delayed pursuant to supplier requirements. CME E-mini Dow $5 Futures and Options, ticker symbol YM, represent one of the most efficient and cost-effective ways to gain market exposure to the Dow Jones Industrial Average. Information in this article cannot be perceived as a call for investing or buying/selling of any asset on the exchange.