Dow Jones Financial Spread Betting
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Dow Jones Spread Betting

Dow Jones Spread Betting


Note: Rather than being called the Dow, Dow Jones or Dow 30, in spread betting and CFD trading, the Dow is often called 'Wall Street' or the 'US 30'.


Dow Jones Prices


Indicative Dow Jones prices:











MarketChangeSellBuy
Above, indicative prices from Financial Spreads: 2,500+ live prices available to Spread Betting and CFD clients.


Stock Market Index Comparison


A stock market index comparison table covering the Dow Jones (Wall St) and other popular markets:

FTSE 100 (UK 100) Daily - Spread Size 1 1 1 1 1 1 1 1
FTSE 100 (UK 100) Daily - Min Stake £1 £0.50 £2 £1 £1 £1 £1 £1
FTSE 100 (UK 100) Future - Spread Size 4 4-8 6 4 3 4 4 4
FTSE 100 (UK 100) Future - Min Stake £1 £0.50 £2 £1 £1 £1 £1 £1
Dow Jones (Wall St) Daily - Spread Size 1 1 2 1 2-4 1 1 2
Dow Jones (Wall St) - Min Stake £1 £0.50 £1 £1 £1 £1 £1 £1
DAX 30 Daily - Spread Size 1 1 1 1 1 1 1 1
DAX 30 Daily - Min Stake £1 £0.50 £2 £1 £1 £1 £1 £1
S&P 500 Daily - Spread Size 3 4 5 3 5 3 3 8
S&P 500 Daily - Min Stake £1 £0.50 £1 £1 £1 £1 £1 £1^
NASDAQ 100 Future - Spread Size 3 4-10 4 3 4 3 3 4
NASDAQ 100 Future - Min Stake £1 £0.50 £4 £1 £1 £1 £1 £1
Comparison Notes.


Where Can I Spread Bet on the Dow Jones?


You can speculate on the Dow Jones, as well as the FTSE 100 and other stock market indices, with providers like:

US Stock Market Analysis and Trading News


Date Trading Update
19-Dec-14 [4:28pm] European Stock Markets

The reindeer got tired and Santa took a break from his rally on Friday as European shares gave back some of the prior session's record gains.

Standard & Poor's downgraded several Italian banks, sending the sector and broader indices mostly lower.

Global indices had been benefiting from the Federal Reserve declaring it will be patient with regard to the timing of the next rate hike.

Low interest rates provided by the Fed should continue to be supportive of markets but after the strongest two-day action in years and no major catalyst for the next leg higher, shares were due a pullback.

The reason the Santa rally phenomenon exists is simply because of positive feeling from investors for the New Year.

For investors in 2014, there are multiple reasons to be hopeful for 2015.

Inflation looks like it will stay subdued and keep a lid on interest rates and falling oil prices put money into consumers' pockets to drive demand in the global economy.

Oil prices saw some stabilisation on Friday but stocks were lower.

The last couple of trading days have seen equities and oil prices decouple from the strong link that saw both crashing simultaneously.

It was this stabilisation in oil as well as gold prices that saw oil companies and miners as some of the top risers in UK spread betting markets.

The UK is less exposed to the Italian banking sector and was still benefiting from a little hubris leftover from renewed M&A activity after IAG made a failed bid for Aer Lingus.

Upwards momentum continued for Tesco with shares atop the FTSE 100 up over 4% after Nielsen data revealed Tesco's 12 week sales were down 3%.

Declining sales are still not good but if they're declining at a slower pace that is at least pointing in the right direction.

Tuesday the Kantar survey showed sales at Tesco declining at a slower rate of 2.7%, the best performance since June.

Kantar said this showed 'some signs of stabilisation for the retailer'

Smith's Group was trading lower on news that their CEO is to retire.

US Stock Markets

Markets in the US have forgotten their international woes and are pushing towards new all-time highs in early trading on Friday despite coming off the best two-day gain in three years.

There was no clear reaction in Apple shares to a BBC documentary that portrayed poor working conditions at the factories of Apple-suppliers in China and Thailand.

The issue is a political hot potato that Apple's PR team are always keen to avoid.

That said, Nike has been plagued by similar reports for years and it remains one of the top sports brands in the world.

BlackBerry shares fell close to 5% after reporting disappointing quarterly earnings.

The company made a small profit but revenues fell more than expected.

BlackBerry has scaled back device production in recent times so the company was slow in fulfilling orders for its new 'passport' phone.

This latest set of results is confirmation of comments from CEO John Chen who said revenue could slide faster than expected as its revenue profile changes.

Update by Jasper Lawler, Market Analyst, CMC Markets
19-Dec-14 [4:28pm] US Stock Markets

Markets in the US have forgotten their international woes and are pushing towards new all-time highs in early trading on Friday despite coming off the best two-day gain in three years.

There was no clear reaction in Apple shares to a BBC documentary that portrayed poor working conditions at the factories of Apple-suppliers in China and Thailand.

The issue is a political hot potato that Apple's PR team are always keen to avoid.

That said, Nike has been plagued by similar reports for years and it remains one of the top sports brands in the world.

BlackBerry shares fell close to 5% after reporting disappointing quarterly earnings.

The company made a small profit but revenues fell more than expected.

BlackBerry has scaled back device production in recent times so the company was slow in fulfilling orders for its new 'passport' phone.

This latest set of results is confirmation of comments from CEO John Chen who said revenue could slide faster than expected as its revenue profile changes.

Update by Jasper Lawler, Market Analyst, CMC Markets
19-Dec-14 [4:18pm] Friday has not seen the euphoric buying of the previous two sessions, but this is to be expected at any time of year.

There will still be a sizeable number of investors and active managers that find themselves with a less-than-favourable allocation to equity markets, which means that the indecent stampede of recent days should find renewed momentum as Christmas looms.

Signs of dissent from Federal Reserve member Narayana Kocherlakota signal that not all is well on the committee, which has stymied the run towards 18,000.

However, overall the new week should see the usual low volume push higher that is characteristic of the final sessions before Christmas.

Update by Chris Beauchamp, Market Analyst, IG Index
19-Dec-14 [10:58am] US markets are looking for another higher open to Friday's session and, if the prior two day's momentum is continued, we could be on the way to new all-time highs in the Dow Jones and S&P 500.

Blue chips have led the way in the latest rally, with tech stocks on top.

On Thursday, Oracle was up 10% after reporting strong earnings while Apple and Microsoft also traded strongly.

Small caps saw gains but they lagged the momentum you might expect on such a bullish day for stocks.

Investors are choosing to stick with the safety of the most liquid stocks in case a quick exit is needed in another meltdown.

International concerns are still present but the words and actions from the Central Bank of Russia to stem the tide of selling in the ruble have pulled emerging markets out of panic mode.

A let up in EM selling as well as Janet Yellen's comments that overseas concerns should not be a big problem to the US economy added to the relief in the rally.

McDonald's shares were higher again after a TV appearance from activist investor Bill Ackman reignited prospects of the restaurant chain spinning off its real estate empire in to a REIT.

BlackBerry is expected to report a quarterly loss of $0.05 per share on revenue of $936m.

Futures suggest that the S&P 500 will open 6 points higher at 2,067, with the Dow Jones expected to open 42 points higher at 17,820 and the NASDAQ 14 points higher at 4,281.

Update by Jasper Lawler, Market Analyst, CMC Markets
19-Dec-14 [10:54am] Two weeks ago we were looking forward to the prospect of the Dow breaking 18,000, then a week later we were looking at it breaking 17,000.

We now find ourselves back where we began, debating the possibility of the Dow breaking back above 18,000.

If US markets can get anywhere near replicating yesterday's moves this 18,000 level will be a hurdle the Dow can clear with some ease today.

The 709 points that have been added to the Dow in the last 48 hours has seen the bounce moving at a more aggressive pace than the sell off did.

Ahead of the open we expect the Dow to start 90 points higher at 17,868.

Update by Alastair McCaig, Market Analyst, IG Index
19-Dec-14 [10:08am]

US Stocks See Largest 2 Day Gain Since 2011



With the Fed in no rush to remove stimulus, the Dow continued its latest recovery by adding an increadible 421 points yesterday.



Update by David Papier, Sales Trader, ETX Capital
19-Dec-14 [8:18am]

Dow Jones Daily Market Update

  • The Dow Jones is currently trading at 17,864.
  • Overnight, the market closed up 438pts (2.52%) at 17,793.
30 Minute Analysis

Rising Stock Market The stock market index is currently above the 20 period MA of 17,817.4 and above the 50 period MA of 17,677.3.

1 Day Analysis

Rising Stock Market The stock market index is above the 20 DMA of 17,693.2 and above the 50 DMA of 17,360.4.

Update by Gordon Childs, Editor, CleanFinancial
19-Dec-14 [7:32am] American Shares - Crossing Over their 50 Day Moving Average:
  • Alexion Pharmaceuticals (ALXN +3.78% to $188.96)
  • Ametek (AME +4.35% to $52.29)
  • Autodesk (ADSK +4.3% to $59.46)
  • Ball Corp (BLL +3.54% to $67.83)
  • Capital One Financial (COF +3.2% to $82.16)
  • Citigroup (C +3.15% to $54.1)
  • Coca-Cola Enterprises (CCE +3.6% to $44.29)
  • ConocoPhillips (COP +4.2% to $69.75)
  • Cummins (CMI +2.55% to $144)
  • Devon Energy (DVN +3.11% to $60.29)
  • Discover Financial Services (DFS +4.15% to $65.01)
  • Discovery Communications (DISCA +3.48% to $35.41)
  • Discovery Communications (DISCK +3.13% to $34.57)
  • Eaton Corp (ETN +3.96% to $67.45)
  • EMC Corp (EMC +4.83% to $29.95)
  • Fedex (FDX +3.93% to $174.38)
  • Fifth Third Bancorp (FITB +2.5% to $20.09)
  • Ford Motor (F +2.49% to $14.81)
  • Franklin Resources (BEN +2.65% to $56.09)
  • Gilead Sciences (GILD +3.07% to $105.54)
  • Goldman Sachs (GS +3.56% to $191.61)
  • Invesco (IVZ +3.11% to $40.46)
  • Johnson & Johnson (JNJ +2.63% to $106.81)
  • Johnson Controls (JCI +3.33% to $47.2)
  • JPMorgan Chase (JPM +2.86% to $61.48)
  • Legg Mason (LM +2.7% to $52.85)
  • Metlife (MET +4.33% to $54.03)
  • Microsoft (MSFT +3.89% to $47.52)
  • Molson Coors Brewing (TAP +4.06% to $76.65)
  • NetApp (NTAP +4.58% to $42.72)
  • Nisource (NI +3.15% to $41.57)
  • Owens-Illinois (OI +6.7% to $26.28)
  • Pitney Bowes (PBI +3.5% to $24.52)
  • PPL Corporation (PPL +2.93% to $35.86)
  • Principal Financial Group (PFG +4.15% to $52.26)
  • Raytheon (RTN +3.27% to $106.01)
  • Rockwell Automation (ROK +3.25% to $111.44)
  • Roper Industries (ROP +3.71% to $157.59)
  • Salesforce.com (CRM +4.09% to $59.33)
  • Sempra Energy (SRE +2.88% to $109.94)
  • Teradata (TDC +4.14% to $42.99)
  • Tyco International (TYC +2.77% to $43.01)
  • Unumprovident (UNM +2.95% to $34.24)
  • Vertex Pharmaceuticals (VRTX +5.27% to $117.74)
  • WW Grainger (GWW +3.36% to $252.23)
  • Zions Bancorporation (ZION +2.73% to $28.2)




Update by InterTrader
19-Dec-14 [7:32am] US indices traded higher on Thursday, led by shares in the Software & Services, Technology Hardware & Equipment and Diversified Financials Sectors.

On the economic data front, Initial Jobless Claims dropped to 289k (295k expected) while Continuing Claims fell to 2373k (2436k estimated).

The S&P 500 (2061.23) jumped above its 20 DMA (2047.76 - flat slope), and remains above its 50 DMA (2004.74 - positive slope).

European markets are expected to open on a positive note.

Update by InterTrader
19-Dec-14 [7:32am] Dow Jones Technical Analysis (30 mins chart)
  • Dow Jones pivot point: 17560
  • Our preference: Long positions above 17560 with targets @ 17900 & 18070 in extension.
  • Alternative scenario: Below 17560 look for further downside with 17400 & 17300 as targets.
Comment: The immediate trend remains up and the momentum is strong.

Update by InterTrader
19-Dec-14 [5:42am] Bullish sessions overnight in the US and Asia are set to see European indices track higher this morning.

The divergent interpretation of the FOMC statement continues to spread, with stock market investors taking it as dovish but forex and bond traders taking it as hawkish.

Even though oil prices continue to plunge, Russia is about to enter recession, there are rumblings in the Chinese credit markets and Greece could be about to kick off the Eurozone crisis again, risk on sentiment is set to pervade in Europe today solely because of US bullish hysteria.

We saw a rally of more than 400 points in the Dow Jones yesterday to 17,792, with the US index posting its strongest 2 day gain since 2011.

It seems that a dovish Fed managed to overshadow the concerns regarding growth in the rest of the world.

It was the final piece of an optimistic jigsaw where encouraging US economic data and corporate earnings have already being confirmed.

Update by Jonathan Sudaria, Market Dealer, Financial Spreads
19-Dec-14 [4:30am] The Dow Jones futures market closed sharply higher on Thursday after the Federal Reserve pledged patience on raising interest rates. The high-range close sets the stage for a steady-to-higher opening on Friday. Stochastics and the RSI have turned neutral-to-bullish signalling that sideways-to-higher prices are possible near-term. Close above the 20 day moving average crossing are needed to confirm that a short-term low has been posted. If the Dow renews this month's decline, the 50% retracement level of the October-December rally rally is the next downside target.

Update by PipTrade
18-Dec-14 [10:42am] US markets are setting up for a big rise on Thursday's open building on the best day's gain in 2014 for the Dow Jones and S&P 500 in the previous session.

The Federal Reserve gave an upbeat take on the US economy but said they will be patient over the timing of the first rate hike.

Oil prices are rallying, with Brent crude having found an interim base at $58.50 just below the $60 forecasted by multiple oil ministers.

The prospect of lower upstream investments after multiple oil companies announced capital expenditure budget-cuts for 2015 has prompted enough speculators to position for a rebound that the downtrend has paused for now.

The Fed weren't exactly dovish but just removed some uncertainty that had crept into markets after the very strong non-farm payrolls that a rate-hike was right around the corner.

Higher oil prices lifting energy shares and a historic resumption of diplomatic ties with Cuba have all lifted sentiment that had become extremely bearish.

Yesterday Oracle reported stronger earnings after having missed estimates in the previous three quarters in the first quarter without founder Larry Ellison as CEO.

Nike, Accenture, Rite Aid and ConAgra Foods all report earnings.

Futures suggest that the S&P 500 will open 18 points higher at 2,030 with the Dow Jones expected to open 136 points higher at 17,492 and the NASDAQ 37 points higher at 4,202.

Update by Jasper Lawler, Market Analyst, CMC Markets
18-Dec-14 [10:13am] Not content with last night's gains, US futures are steaming ahead in early trade.

Currently the moves would give us an opening call of 17,510, another 160 points higher for the Dow, and 20 extra points for the S&P, at 2033.

Update by Will Hedden, Sales Trader, IG Index

» For more see Stock Market Trading News & Analysis.

Readers please note:


Where Can I Find Live Spread Betting Prices and Charts for the Dow Jones?


We do show indicative Dow Jones spread betting prices, please see above.

The CFD chart below also offers readers a helpful look at the US stock market index.


The Plus500 chart above is usually based on the Dow Jones futures contract (not the daily market).

If you want to check live spread betting prices and charts for the Dow, you may need a financial spread betting account.

A spreads account would also let you speculate on short-term daily Dow Jones markets. Users should note that accounts are normally subject to suitability, credit and status checks.

Should your application be approved then you can log on and study the charts and the current prices. These are normally free. Having said that, you might get the occasional sales letter or email from the spread trading company.

Of course, if you do trade then, before starting, you should note that CFD trading and financial spread trading carry a high degree of risk to your funds and can result in losses that are greater than your initial investment.

Advanced Charts for the Dow Jones


Although charting software/packages can vary across the industry, to help your analysis of the Dow Jones, they often come with useful tools like:
  • Drawing features and options e.g. Trendlines, Fibonacci Arcs, Fans and Time Zones
  • Different display options e.g. candlestick charts and bar charts
  • A host of different time periods e.g. 1 minute, 3 minute, 5 minute, 15 minute, 1 hour, 1 day etc.

Charts on the Financial Spreads platform also include advanced features like:
  • BackTesting, Custom Indicators and Optimisation functions
  • Helpful overlays e.g. Ichimoku Clouds, Parabolic SAR, EMA, Envelopes etc.
  • Technical indicators e.g. Williams %R, True Strength (TSI), Chaikin's Volatility, Aroon, Forecast Oscillator, Price and Volume Trend, Linear Regression etc.
  • Automatic email notifications that trigger when a market hits a pre-set level

Sample Dow Jones chart from Financial Spreads

Dow Jones Trading Guide - Example Chart


The following financial spread betting firms give account holders access to real time trading prices and charts:

Dow Jones Index Commitments of Traders Report - 9 Dec 2014 (i)


Futures Only Positions, CBT , Code 124603, (DJIA Index x $5) (i)

Reporting Firms (i) Non-Reportable Positions (i)
Non-Commercial (i)
Commercial (i) Total Reportable (i)
 
Commitments (i) Open (i) Interest Commitments
Long (i) Short (i) Spreads (i) Long Short Long Short Long Short
41,981 20,693 90 83,063 101,456 125,134 122,239 141,923 16,789 19,684
 
Changes from 2 Dec 2014 (i) Change in (i) Open Interest Changes from
Long Short Spreads Long Short Long Short Long Short
-7,104 -1,793 -8 257 -3,803 -6,855 -5,604 -8,307 -1,452 -2,703
 
Percent of Open Interest for Each Category of Trader
Long Short Spreads Long Short Long Short   Long Short
29.6% 14.6% 0.1% 58.5% 71.5% 88.2% 86.1%   11.8% 13.9%
 
Number of Traders in Each Category (i) Total (i) Traders  
Long Short Spreads Long Short Long Short    
26 24 6 44 25 74 51 109    
 
Long/Short Commitments Ratios (i)   Long/Short Ratio
Ratio   Ratio Ratio   Ratio
2:1   1:1.2 1:1   1:1.2
 
Net Commitment Change (i)  
-5,311  

Also see:

Spread Betting on Individual Dow Jones Companies


Simply click on the company you're interested in spread betting on. As well as indicative prices and charts, we talk you through the most popular spread betting questions on that Dow 30 company:
  • Where can I spread bet?
  • How to spread bet on that American company?
  • Where can I trade commission free?
  • Etc
Company Name Symbol Dow Jones Stocks
Spread Betting Guides »
Charts &
Prices
3M MMM 3M Spread Betting MMM Charts & Prices
Alcoa AA Alcoa Spread Betting AA Charts & Prices
American Express AXP American Express Spread Betting AXP Charts & Prices
AT&T T AT&T Spread Betting T Charts & Prices
Bank of America BAC Bank of America Spread Betting BAC Charts & Prices
Boeing BA Boeing Spread Betting BA Charts & Prices
Caterpillar CAT Caterpillar Spread Betting CAT Charts & Prices
Chevron CVX Chevron Spread Betting CVX Charts & Prices
Cisco CSCO Cisco Spread Betting CSCO Charts & Prices
Coca Cola CCE Coca Cola Spread Betting CCE Charts & Prices
Du Pont DD Du Pont Spread Betting DD Charts & Prices
Exxon Mobil XOM Exxon Mobil Spread Betting XOM Charts & Prices
General Electric GE General Electric Spread Betting GE Charts & Prices
Hewlett Packard HPQ Hewlett Packard Spread Betting HPQ Charts & Prices
Home Depot HD Home Depot Spread Betting HD Charts & Prices
IBM IBM IBM Spread Betting IBM Charts & Prices
Intel INTC Intel Spread Betting INTC Charts & Prices
Johnson and Johnson JNJ Johnson and Johnson Spread Betting JNJ Charts & Prices
JPMorgan Chase JPM JPMorgan Chase Spread Betting JPM Charts & Prices
McDonalds MCD McDonalds Spread Betting MCD Charts & Prices
Merck MRK Merck Spread Betting MRK Charts & Prices
Microsoft MSFT Microsoft Spread Betting MSFT Charts & Prices
Pfizer PFE Pfizer Spread Betting PFE Charts & Prices
Procter and Gamble PG Procter and Gamble Spread Betting PG Charts & Prices
Travelers TRV Travelers Spread Betting TRV Charts & Prices
United Technologies UTX United Technologies Spread Betting UTX Charts & Prices
UnitedHealth UNH UnitedHealth Spread Betting UNH Charts & Prices
Verizon VZ Verizon Spread Betting VZ Charts & Prices
Wal-Mart WMT Wal-Mart Spread Betting WMT Charts & Prices
Walt Disney DIS Walt Disney Spread Betting DIS Charts & Prices


Individual Shares Spread Betting Guides


For more individual equities guides, also see:

Financial Spreads » "With FinancialSpreads.com you get all the normal
advantages of Spread Betting plus..." » read Financial Spreads review.


About the Dow Jones


The Dow Jones Industrial Average, often referred to as the Dow, Dow 30 or Dow Jones, is one of the world's most well known markets.

The Dow represents a selection of thirty of the biggest American public companies. It's used to measure the performance of these corporations whilst also reflecting the state of the American economy and, to a degree, the world economy.

In spread betting and CFD trading, rather than being called the Dow, Dow Jones or Dow 30 it is often called 'Wall Street' or the 'US 30'.


Dow Jones Spread Betting: Firms with High Share Prices are the Most Important


If you want to profit from trading the FTSE 100, the biggest corporations are the most important. Because of the way the FTSE 100 index is weighted, movements in the share prices of the largest corporations affect the FTSE 100 index more than price movements in the shares of smaller companies.

Trading the Dow Jones However, the Dow Jones Industrial Average is not 'price weighted'. This means that a one point increase or decrease by any share in the index will have the same effect as a one point increase or decrease of any other share.

As of April 2012, share prices on the DJIA range from around $8-9 (Bank of America and Alcoa) to almost $210 (IBM).

So, a 10% shift in IBM's share price (around $21) would account for a large movement in the Dow Jones index (around 160 points).

However, a 10% shift in Bank of America's share price (around $0.90) would only lead to a very small change in the Dow Jones (around 7 points). This isn't because IBM is a bigger corporation, it is because IBM's share price is much higher.

The other high value shares to watch out for in the Dow Jones are, as of April 2012, Caterpillar, Chevron and McDonalds.


Dow Jones Stock Market Index: Different Trading Times


The Dow is based on Wall Street however, not all 30 companies that make up the DJIA are based on America's East coast.

So, when the Dow Jones opens for trading, the value is determined only by the relatively few companies that open first. The opening price on the Dow will therefore always be close to the previous day's closing price.

As a result, the Dow Jones will never accurately reflect the true opening prices of all its companies.

If you are looking to trade on the Dow Jones, you need to be very careful when you open your position. Whilst the FTSE 100 might 'hit the ground running' with all companies opening at the same time, the Dow Jones doesn't work in the same way. Investors should monitor opening and closing prices so they can be confident of opening a position at the right time.


Dow Jones Spread Betting: Know the Shares


One of the advantages of trading the Dow Jones is that there are only 30 corporations in the index. Therefore it's easier to keep an eye on each of the component companies and what's happening to their share price.

Some traders believe that it is good practice to have a number of shares that you regularly follow. The aim of this is to get to know these shares and become familiar with their price movements.

Keeping tabs on all FTSE 100 companies is tough, it's hard to know exactly what is happening to all the shares at any given time. However, watching 30 Dow Jones stocks is more manageable. You can get to know each company's typical share movements and that can help you forecast where the Dow Jones will head next.
Advert: Dow Jones Spread Betting, sponsored by FinancialSpreads.com.
You can spread bet on the Dow Jones with Financial Spreads.


Where Can I Spread Bet on the Dow Jones for Free?


Speculating on the stock market always comes with a degree of risk. However, if you would like to use a Demo Account, that allows you to practice spread betting on a wide range of markets, please see below for further details.

When you think about which investment option is right for you, don't forget that, in the UK, financial spread betting is currently tax free*.

If you are trying to find a low cost financial spread betting website then keep in mind that you can trade the Dow Jones without having to pay any commissions or brokers' fees through companies such as:

Free Demo Account


If you would like to use a Demo Account where you are able to try out online spread betting, and speculating on markets like GBP/USD, gold, the FTSE 100 and the Dow Jones, then look at: Each of the spread betting companies listed above offer a Test Account which lets users apply a range of trading orders, test new trading ideas and review stock market charts.




How to Spread Bet on the Dow Jones

How to Spread Bet on the Dow Jones?


As with a wide variety of financial markets, investors can spread bet on indices, like the Dow Jones, to either rise or fall.

If you go to the Financial Spreads platform, you can see that they have priced the Dow Jones Rolling Daily market at 13343.0 - 13345.0. This means that an investor could put a spread bet on the Dow Jones index:

  Dow Jones Spread Betting Example Moving above 13345.0, or
  Dow Jones Trading Example Moving below 13343.0

When you spread bet on the Dow Jones index you trade in £x per point, where a point is one point of the index itself. As a result, if you invested £4 per point and the Dow Jones moves 26 points then that would be a difference to your profit/loss of £104. £4 per point x 26 points = £104.

Rolling Daily Indices Markets

This is a Rolling Daily Market which means that there is no set settlement date for this market. You do not have to close your position, should it still be open at the end of the trading day, it simply rolls over to the next trading day.

If you do let your position roll over into the next day and are spread betting on the market to:

  Dow Jones Trading Example Go higher - then you are charged a small overnight financing fee, or
  Dow Jones Trading Example Go lower - then a small payment is normally credited to your account

For more information see Rolling Daily Spread Betting.


Dow Jones Index - Rolling Daily Trading Example


Now, if you think about the spread of 13343.0 - 13345.0 and assume that:
  • You have analysed the indices markets, and
  • You think that the Dow Jones index will increase and move above 13345.0
Then you may go long of the market at 13345.0 and invest, for example, £5 per point.

Therefore, with this trade you make a profit of £5 for every point that the Dow Jones index moves higher than 13345.0. However, it also means you will lose £5 for every point that the Dow Jones market moves below 13345.0.

Considering this from another angle, if you were to buy a spread bet then your P&L is worked out by taking the difference between the final price of the market and the initial price you bought the spread at. You then multiply that price difference by the stake.

Therefore, if after a few days the US stock market moved higher then you might think about closing your trade and guaranteeing your profits.

Taking this a step further, if the stock market did go up then the spread might change to 13380.4 - 13382.4. You would close your spread bet by selling at 13380.4. As a result, with the same £5 stake your profit would be calculated as:

P&L = (Closing Price - Initial Price) x stake
P&L = (13380.4 - 13345.0) x £5 per point stake
P&L = 35.4 x £5 per point stake
P&L = £177.00 profit

Trading the American stock market is not simple. In the above example, you had bet that the US index would rise. Of course, the stock market can fall.

If, contrary to your expectations, the Dow Jones fell, then you might decide to close your trade to stop any further losses.

So if the spread pulled back to 13313.1 - 13315.1 you would close your position by selling at 13313.1. This would result in a loss of:

P&L = (Closing Price - Initial Price) x stake
P&L = (13313.1 - 13345.0) x £5 per point stake
P&L = -31.9 x £5 per point stake
P&L = -£159.50 loss

Note - Dow Jones Rolling Daily spread quoted as of 11-Sep-12.


How to Trade Dow Futures

How to Trade Dow Futures


Looking at a site like InterTrader, we can see they are currently offering the Dow Jones December Futures market at 13408 - 13414. This means an investor could speculate on the Dow Jones index:

  Dow Jones Futures Trading Example Closing above 13414, or
  Dow Jones Futures Trading Example Closing below 13408

On the expiry date for this 'December' market, 21-Dec-12.

As with the daily market above, you trade the Dow Futures in £x per point. So if your stake is £5 per point and the Dow moves 27 points then that would make a difference to your profits (or losses) of £135. £5 per point x 27 points = £135.


Dow Jones Futures Trading Example


If we take the above spread of 13408 - 13414 and make the assumptions that:
  • You have done your analysis of the American futures market, and
  • Your analysis suggests the US index will settle above 13414 by 21-Dec-12
Then you could decide to buy the market at 13414 and risk, for the sake of argument, £2 per point.

With this contract you make a gain of £2 for every point that the US index moves higher than 13414. Nevertheless, you will make a loss of £2 for every point that the Dow Jones market goes lower than 13414.

Put another way, with spread trading, your profits (or losses) are worked out by taking the difference between the closing price of the market and the price you bought the market at. You then multiply that price difference by the stake.

So, if on the expiry date, the Dow Jones closed at 13488, then:

Profit / loss = (Closing Value - Opening Value) x stake
Profit / loss = (13488 - 13414) x £2 per point stake
Profit / loss = 74 x £2 per point stake
Profit / loss = £148 profit

Of course trading the American stock market futures is rarely that straightforward. In the above example, you wanted the Dow to rise. Of course, the stock market index could fall.

If the futures had fallen and settled at 13334 on the expiry date, then you would end up losing this trade.

Profit / loss = (Closing Value - Opening Value) x stake
Profit / loss = (13334 - 13414) x £2 per point stake
Profit / loss = -80 x £2 per point stake
Profit / loss = -£160 loss

Note - Dow Jones December Futures market taken as of 27-Sep-12.


Risk Management: Spread Betting on the US Stock Market with a Stop Loss


You can put a limit on the size of your position to help reduce your potential losses without impacting your upside. You can also employ smaller stake sizes such as £1 per point or $1 per point.

Letís say you spread bet on the Dow to go up, with a £1 per point stake and attach a Stop Loss order to your trade. If the US stock market goes up by 120 points then you would make 120 points x £1 per point = £120.

You are also able to trade the markets in Euros and Dollars. If you want to trade in dollars then 120 points x $1 per point = $120.

Of course if the market went against you, dropping by say 90 points, then with a £1 stake you would lose 90 points x £1 per point = £90.

Obviously this would be a fairly poor start. However, with firms like Financial Spreads you can add a Stop Loss at let's say, 30 points.

If you were trading the Dow this would mean that your position would be closed if the US index moved against you by 30 points. Therefore, instead of losing £90, you'd only lose 30 points x £1 per point = £30.

However, assuming you correctly predicted the direction of the market, your upside would still be £120.

Note that Stop Losses are not guaranteed, if a market slips then your Stop Loss is closed out at the next traded price. If you donít want that risk then you can use a Guaranteed Stop Loss, these are guaranteed to close your trade even if the underlying market slips (gaps).

A number of firms like Financial Spreads, InterTrader and Capital Spreads automatically apply a Stop Loss to every trade. You can upgrade to a Guaranteed Stop Loss but that normally comes at a small premium (normally a wider spread).


Advert: Dow Jones Spread Betting, sponsored by FinancialSpreads.com.
You can spread bet on the Dow Jones with Financial Spreads.


Trading Risk Warning
'Dow Jones Spread Betting' edited by Jacob Wood, updated 19-Dec-14

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