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:

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
02-Oct-14 [10:51am] With the Russell 2000 having fallen 10% from its March highs, concerns that blue chips may be set to follow small caps into correction territory are sending US futures lower, with moves from the ECB likely to heavily influence the open of US markets.

Futures suggest the Dow Jones will open 19 points lower at 16,785, with the S&P 500 expected to open 2 points lower at 1,944 and the NASDAQ 6 points lower at 3,978.

Further details are expected to be announced over the European Central Bank's proposed purchase of Asset Backed Securities.

Investors on both sides of the pond will have questions of 'How much? Which ones? When? For how long?'

If the ECB's answers to questions over their bond-buying program fail to convince markets that a sizeable stimulus is being undertaken; global stocks could take a serious hit.

There could be considerable disappointment if there is the feeling that the ECB won't fill the void left by the end of the Fed's QE.

The final initial jobless claims number for September is expected to show another week below 300k indicating another strong non-farm payrolls number tomorrow.

Following weak durable goods, there are low expectations for factory orders in August of a -9.3% drop, adding weight to the recent moderation in America's manufacturing sector.

Corona beer brewer Constellation Brands is expected to report Q2 earnings of $1.15 per share on revenue of $1.64bn.

The company has beaten estimates in the last four quarters and as such the stock price has tripled, recently settling into a range between $85 and $90.

If earnings continue at the same pace and the S&P 500 holds together, a test of $100 could be on the cards.

Seasonings-maker McCormick & Company is expected to earn $0.81 per share on revenue of $1.03bn.

Shares have been oscillating around $70 since March as the company expands internationally but stronger sales growth in the US may be the catalyst needed to shift prices out of their price range.

Update by Jasper Lawler, Market Analyst, CMC Markets
02-Oct-14 [10:28am] The talk of the town is the ECB rate decision and the press conference later today.

Dealers are waiting for the details of Mario Draghi's ABS scheme or 'I can't believe it's not QE' programme.

In the US, we are expecting the Dow to open 20 points lower at 16,784, as the first reported case of Ebola in the US has added to the fear factor.

Update by David Madden, Market Analyst, IG Index
02-Oct-14 [8:08am]

Dow Jones Daily Market Update

  • The Dow Jones is currently trading at 16,812.
  • Overnight, the market closed down -191pts (-1.12%) at 16,823.
30 Minute Indicator Analysis

Falling Stock Market The stock market index is below the 20 period moving average of 16,822.8 and below the 50 period moving average of 16,892.9.

1 Day Indicator Analysis

Falling Stock Market The stock market is below the 20 day moving average of 17,074.7 and below the 50 day moving average of 16,912.3.

Update by Gordon Childs, Editor, CleanFinancial
02-Oct-14 [7:29am] US indices dropped on Wednesday pressured by shares in the Transportation, Materials and Semiconductors & Semiconductor Equipment sectors.

The S&P 500 (1946.16) remains below its 20 DMA (1990 - negative slope), and its 50 DMA (1976 - flat slope).

European markets are expected to start on a positive note.

Update by InterTrader
02-Oct-14 [7:29am] American Shares - Crossing Over their 50 Day Moving Average:
  • Covidien (COV +2.51% to $88.68)
  • Northeast Utilities (NU +1.33% to $44.89)

American Shares - Crossing Under their 50 Day Moving Average:
  • Accenture (ACN -1.97% to $79.72)
  • Airgas (ARG -1.49% to $109)
  • Ameriprise Financial (AMP -3.02% to $119.65)
  • Apple (AAPL -1.56% to $99.18)
  • Automatic Data Processing (ADP -2.01% to $71.42)
  • Boeing (BA -2.13% to $124.67)
  • Citrix Systems (CTXS -3.53% to $68.82)
  • Computer Sciences (CSC -3.53% to $58.99)
  • Constellation Brands (STZ -2.18% to $85.26)
  • Dollar General (DG -1.36% to $60.28)
  • E*Trade (ETFC -2.48% to $22.03)
  • Ecolab (ECL -1.85% to $112.7)
  • Expedia (EXPE -3.24% to $84.78)
  • Frontier Communications (FTR -1.84% to $6.39)
  • Intel (INTC -2.38% to $33.99)
  • Lincoln National (LNC -3.51% to $51.7)
  • Marriott International (MAR -2.8% to $67.94)
  • Molson Coors Brewing (TAP -2.5% to $72.58)
  • Navient (NAVI -1.52% to $17.44)
  • Nucor (NUE -2.67% to $52.83)
  • Petsmart (PETM -3.18% to $67.86)
  • Pfizer (PFE -1.42% to $29.15)
  • Quanta Services (PWR -3.28% to $35.1)
  • Republic Services (RSG -2.9% to $37.89)
  • Sandisk (SNDK -2.9% to $95.11)
  • Sherwin Williams (SHW -2.4% to $213.74)
  • Staples (SPLS -1.98% to $11.86)
  • Starwood Hotels & Resorts (HOT -3.62% to $80.2)
  • Sysco (SYY -2.53% to $36.99)
  • Tenet Healthcare (THC -2.78% to $57.74)
  • Texas Instruments (TXN -1.7% to $46.88)
  • Under Armour (UA -3.95% to $66.37)
  • UPS (UPS -1.39% to $96.92)
  • Walt Disney (DIS -1.73% to $87.49)
  • Wyndham Worldwide (WYN -2.84% to $78.95)
  • Zions Bancorporation (ZION -1.79% to $28.54)

Update by InterTrader
02-Oct-14 [7:29am] Dow Jones Technical Analysis (30 mins chart)
  • Dow Jones pivot point: 16500
  • Our preference: Long positions above 16500 with targets @ 16910 & 17070 in extension.
  • Alternative scenario: Below 16500 look for further downside with 16350 & 16225 as targets.
Comment: The RSI lacks downward momentum.

Update by InterTrader
02-Oct-14 [5:54am] Stock markets are set to open lower on Thursday after a day that saw the bears gather momentum, with all major indices in Europe and the US falling sharply.

The FTSE 100 fell by almost 1% after weak manufacturing data saw the British PMI fall to its lowest level in 17 months.

Many in the UK spread betting markets will be hoping that the index finds some support today as investors re-evaluate the state of the British economy.

Meanwhile, a weakening manufacturing sector and low levels of inflation in the Eurozone have left investors wondering whether record low base rates will be enough to rejuvenate the economy.

Until the issue is properly resolved, the calls from those who believe that the ECB will have to turn to full scale quantitative easing are only going to get louder.

Hong Kong's pro-democracy protests highlighted that geopolitical concerns are growing in number and could start to exact a greater toll on global markets.

If that wasn't enough, we also saw the first reported case of the Ebola virus in the US.

As a result, investors decided to head for the exit, pushing the Dow Jones 191 points lower to 16,826.

Update by Jonathan Sudaria, Market Dealer, Financial Spreads
02-Oct-14 [4:47am] The Dow Jones futures market closed lower on Wednesday as manufacturing data fell short of market estimates. The low-range close sets the stage for a steady-to-lower opening on Thursday. Stochastics and the RSI are neutral-to-bearish signalling that sideways-to-lower prices are possible near-term. Wednesday's close below the reaction low crossing confirms that a short-term top has been posted while opening the door for additional weakness near-term. If the Dow extends today's decline, the reaction low crossing is the next downside target.

Update by PipTrade
01-Oct-14 [4:11pm] ADP numbers from the US offered the briefest of comforts, with the September number bouncing back slightly.

This points the way to a possible rebound in Friday's non-farm number, which should go a long way to soothing frayed nerves.

However, additional US data put the tone back to negative, with the result that the Dow has slipped below 17,000 once more and is testing its long-term uptrend.

October is supposed to be a difficult month, and today fits that narrative nicely, but the longer-term picture could still be viewed as encouraging for equity markets.

US earnings season may have to do the heavy-lifting once again, reminding investors that earnings are still holding up well and that the end of QE doesn't necessarily spell doom for the equity rally.

Update by Brenda Kelly, Senior Market Strategist, IG Index
01-Oct-14 [10:40am] US markets look set to open mixed today, with ISM and ADP data expected to continue to show a modest expansion in the US economy.

In addition, the progress of the first case of Ebola inside the US will be carefully watched.

The last three trading sessions have seen US markets trapped inside a volatile range, with the Dow Jones oscillating around the psychological 17,000 level.

The future direction of stocks is tied into the upcoming earnings season and the state of the US economy.

Futures suggest the Dow Jones will open unchanged at 17,042, with the S&P 500 expected to open 1 point lower at 1,971 and the NASDAQ 4 points lower at 4,045.

The US economic recovery will be in focus today after figures showed that there has been a slowdown in factory orders and the housing market in August.

As a result, today's ISM manufacturing report at 3:00pm BST will give an important indication as to whether US industry has pulled back in September.

Before that at 1:15pm, the ADP report will give the first big indicator of the US labour market in September.

Consumer confidence, which tends to rise with rising employment, was reported to have ticked down yesterday, perhaps reflecting the slowdown in August, but weekly jobless claims averaged fewer than 300k for September which is a typical indicator of an NFP above 200k.

The ideal for stock markets is 'goldilocks' economic data, with strong corporate earnings.

Economic expansion needs to support corporate profitability without risking a tighter Fed and a good set of earnings are still needed to justify lofty valuations.

Update by Jasper Lawler, Market Analyst, CMC Markets
01-Oct-14 [10:13am] It wasn't a great finish to the third quarter, although the S&P 500 is still holding on to its winning streak, and it looks like the new quarter will be starting on a weak note.

With Hong Kong still in lockdown and Ukraine rumbling in the background, the macro environment is not particularly supportive of equity gains.

Oil prices are another cause for concern, especially since OPEC doesn't seem to be wavering in its production commitments.

Long-term equity trends have come under pressure but the Dow is still showing a distinct reluctance to drop below 17,000.

Ahead of the open, we expect the index to start ten points higher at 17,052.

Update by Chris Beauchamp, Market Analyst, IG Index
01-Oct-14 [7:29am] American Shares - Crossing Over their 50 Day Moving Average:
  • Accenture (ACN +1.75% to $81.32)
  • Computer Sciences (CSC +2.57% to $61.15)
  • Constellation Brands (STZ +0.94% to $87.16)
  • Dominion Resources (D +0.89% to $69.09)
  • eBay (EBAY +7.54% to $56.63)
  • UPS (UPS +0.98% to $98.29)

American Shares - Crossing Under their 50 Day Moving Average:
  • Air Products & Chemicals (APD -2.22% to $130.18)
  • Amphenol (APH -1.94% to $99.86)
  • Ball Corp (BLL -1.43% to $63.27)
  • Comerica (CMA -0.62% to $49.86)
  • Dow Chemical (DOW -1.83% to $52.44)
  • Intuitive Surgical (ISRG -0.62% to $461.82)
  • Lorillard (LO -0.71% to $59.91)
  • LyondellBasell Industries (LYB -4.1% to $108.66)
  • Martin Marietta Materials (MLM -0.58% to $128.94)
  • Microchip Technology (MCHP -0.61% to $47.23)
  • Praxair (PX -1.44% to $129)
  • Principal Financial Group (PFG -1% to $52.47)
  • Ryder System (R -0.96% to $89.97)
  • Sealed Air (SEE -1.41% to $34.88)
  • Suntrust Banks (STI -0.81% to $38.03)
  • Xilinx (XLNX -1.49% to $42.35)
  • Yum! Brands (YUM -0.94% to $71.98)
  • Zimmer Holdings (ZMH -0.9% to $100.55)

Update by InterTrader
01-Oct-14 [7:29am] US indices fell on Tuesday pressured by shares in the Automobiles & Components, Energy, and Materials sectors.

The S&P 500 (1972.29) remains below its 20 DMA (1992.8 - negative slope), and its 50 DMA (1976.7 - flat slope).

European markets are expected to start on a positive note.

Update by InterTrader
01-Oct-14 [7:29am] Dow Jones Technical Analysis (30 mins chart)
  • Dow Jones pivot point: 17080
  • Our preference: Short positions below 17080 with targets @ 16835 & 16750 in extension.
  • Alternative scenario: Above 17080 look for further upside with 17150 & 17230 as targets.
Comment: As long as 17080 is resistance, look for choppy price action with a bearish bias.

Update by InterTrader

» 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 - 23 Sep 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
44,539 29,064 349 74,997 91,178 119,885 120,591 135,500 15,615 14,909
Changes from 16 Sep 2014 (i) Change in (i) Open Interest Changes from
Long Short Spreads Long Short Long Short Long Short
-3,916 3,978 -4,959 -26,283 -29,985 -35,158 -30,966 -36,084 -926 -5,118
Percent of Open Interest for Each Category of Trader
Long Short Spreads Long Short Long Short   Long Short
32.9% 21.4% 0.3% 55.3% 67.3% 88.5% 89.0%   11.5% 11.0%
Number of Traders in Each Category (i) Total (i) Traders  
Long Short Spreads Long Short Long Short    
31 33 8 35 24 69 62 117    
Long/Short Commitments Ratios (i)   Long/Short Ratio
Ratio   Ratio Ratio   Ratio
1.5:1   1:1.2 1:1   1:1
Net Commitment Change (i)  

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 &
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 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
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
You can spread bet on the Dow Jones with Financial Spreads.

Trading Risk Warning
'Dow Jones Spread Betting' edited by Jacob Wood, updated 02-Oct-14

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