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
29-Jul-14 [4:20pm] Today's move back above 17,000 for the Dow Jones is likely to provoke another outbreak of general unhappiness among those predicting a correction.

But with earnings still coming in ahead of expectations, the dips are still likely to be brief and shallow.

The big news of the day is still to come, with Twitter earnings after the bell.

As ever, Twitter lives in Facebook's shadow; the comparisons are many but the key is monetisation.

Facebook seems to have pulled it off, and Twitter needs to do the same to convince the doubters that the platform has the long-term viability needed to justify its valuation.

Update by Chris Beauchamp, Market Analyst, IG Index
29-Jul-14 [10:43am] After a shaky session yesterday, US markets look set to open lower today as markets kick into gear on numerous corporate earnings releases and consumer confidence data.

Futures suggest the Dow Jones will open 19 points lower at 16,963, with the S&P 500 expected to open 3 points lower at 1,975 and the NASDAQ 6 points lower at 3,961.

With no earnings for US blue-chips yesterday, the Dow staged a late recovery and again closed above 16,950 in what was an unsteady session on mixed economic data.

If the benchmark is to break its high at 17,150 in the near term, the first release for second quarter GDP on Wednesday is likely to be a key driver given the way the poor number from the first quarter was written off as weather-related.

The largest cap stocks have underperformed broader indices in the past few sessions; whether this trend continues will in part depend on earnings before the open from pharma giants Merck and Pfizer.

The pharmaceutical sector has added to bullish sentiment in markets with a wave of M&A that saw AbbVie successfully takeover Ireland's Shire.

Repositioning in the face of competition from generic drugs as patents run out have seen most of the big pharma companies swap assets to concentrate on more profitable lines of the business.

Pfizer failed in their attempted bid for AstraZeneca; it is expected to report earnings of $0.57 per share on revenue of $12.46bn.

Merck & Co is expected to earn $0.81 per share on revenue of $10.6bn.

Herbalife will be a focus again on the open, the company rallied after hedge fund manager Bill Ackman's unconvincing presentation on the company's purported pyramid scheme but has collapsed again afterhours after reporting a drop in quarterly profits.

After today's close Twitter have a lot of naysayers to disprove after last quarters disappointing user growth figures; it is expected to lose -$0.01 per share on revenue of $283m.

Update by Jasper Lawler, Market Analyst, CMC Markets
29-Jul-14 [10:43am] In the US, we are expecting the Dow Jones to open 20 points lower at 16,965.

Herbalife missed expectations, which took investors by surprise, after previously exceeding quarterly estimates for over five years in a row.

The stock fell over 10% in post-market trading.

Update by David Madden, Market Analyst, IG Index
29-Jul-14 [9:22am] The US managed to scrape some gains last night but good results from BP is encouraging some gains this morning.



Update by Adrien Cohen, Market Analyst, ETX Capital
29-Jul-14 [8:01am]

Dow Jones Daily Trading Update

  • The Dow Jones is currently trading at 16,980.
  • Overnight, the market closed up 26pts (0.15%) at 16,980.
30 Minute Chart Analysis

Neutral Stock Market The stock market index is trading lower than the 20 period MA of 16,980.6 and higher than the 50 period MA of 16,963.4.

1 Day Chart Analysis

Neutral Stock Market The stock market is trading lower than the 20 day MA of 17,023.9 and higher than the 50 day MA of 16,896.2.

Update by Gordon Childs, Editor, CleanFinancial
29-Jul-14 [7:35am] US indices were mixed on Monday. Shares in the Utilities, Real Estate and Technology Hardware & Equipment sectors traded higher while shares in the Transportation, Food & Staples Retailing and Capital Goods sectors were under pressure.

The S&P 500 (1978.91) remains above its 20 DMA (1974.89 - positive slope) and its 50 DMA (1948.17 - positive slope).

European markets are expected to start on a flat note.

Update by InterTrader
29-Jul-14 [7:35am] Dow Jones Technical Analysis (30 mins chart)
  • Dow Jones pivot point: 17070
  • Our preference: Short positions below 17070 with targets @ 16725 & 16660 in extension.
  • Alternative scenario: Above 17070 look for further upside with 17130 & 17190 as targets.
Comment: The RSI is capped by a bearish trend line.

Update by InterTrader
29-Jul-14 [7:35am] American Shares - Crossing Over their 50 Day Moving Average:
  • AGL Resources (GAS +1.14% to $54.15)
  • American Electric Power (AEP +2.69% to $54.65)
  • Berkshire Hathaway (BRK/B +0.64% to $128.37)
  • Crown Castle (CCI +2.38% to $74.95)
  • DTE Energy (DTE +1.36% to $77.03)
  • Family Dollar Stores (FDO +24.86% to $75.74)
  • First Solar (FSLR +2.31% to $65.53)
  • Mastercard (MA +0.58% to $76.19)
  • Nordstrom (JWN +1.34% to $68.99)
  • Northeast Utilities (NU +1.68% to $46.1)
  • Patterson Cos (PDCO +0.63% to $39.66)
  • Pepco Holdings (POM +0.55% to $27.55)
  • Roper Industries (ROP +3.85% to $148.26)
  • Varian Medical Systems (VAR +0.68% to $83.3)
  • Ventas (VTR +0.98% to $64.84)
  • Wisconsin Energy (WEC +2.08% to $46.09)
  • Wynn Resorts (WYNN +3.18% to $210.97)


American Shares - Crossing Under their 50 Day Moving Average:
  • Actavis (ACT -1.15% to $214.94)
  • Alexion Pharmaceuticals (ALXN -2.57% to $162.74)
  • Allegion (ALLE -2.78% to $53.57)
  • Alliance Data Systems (ADS -1.43% to $266.7)
  • Electronic Arts (EA -2.64% to $35.09)
  • Ensco International (ESV -1.41% to $52.5)
  • Estee Lauder (EL -0.98% to $74.93)
  • Expeditors International of Washington (EXPD -1.23% to $44.86)
  • Fifth Third Bancorp (FITB -1.42% to $20.88)
  • Hudson City Bancorp (HCBK -1.76% to $9.77)
  • JM Smucker (SJM -0.53% to $104.08)
  • M&T Bank (MTB -1.22% to $122.68)
  • Marsh & McLennan (MMC -0.54% to $51.15)
  • Molson Coors Brewing (TAP -1.69% to $70.36)
  • Salesforce.com (CRM -1.62% to $54)
  • Tiffany & Co (TIF -1.09% to $98.25)
  • UPS (UPS -0.88% to $102.66)
  • Walgreen (WAG -2.51% to $71.45)


Update by InterTrader
29-Jul-14 [6:03am] Some healthy corporate earnings results kept US markets fairly optimistic yesterday ahead of Friday's key nonfarm payrolls report.

Low interest rates are fuelling plenty of mergers and acquisitions activity, giving investors another reason to be cheerful.

This saw the Dow Jones resume its climb, with the index gaining 23 points to 16,982 after an initial sell off in early afternoon trading.

The rebound in the US and some overnight gains in Asia are set to see European shares edge higher on the open this morning.

Despite the positive start, financial spread betting markets aren't expected to make much headway as traders sit on the sidelines ahead of today's meeting of European Union ambassadors.

Last week's meeting of European foreign ministers was widely criticised for being impotent, unable to coble together anything that would actually impact Russia.

Nevertheless, the door was left ajar for serious tier 3 economic sanctions and it appears that world leaders have been busy on the diplomatic back channels agreeing tough financial, energy and military action in unison with the US.

However, like the prior tit-for-tat exchange of token sanctions between the West and Russia, traders are concerned about how Russia will react and what they will deem to be appropriate retaliatory action.

Update by Jonathan Sudaria, Market Dealer, Financial Spreads
28-Jul-14 [4:39pm] In the US, the Dow Jones is down 45 points at 16,914, after disappointing service and housing figures ensured the US trading session got off on the wrong foot.

Traders are looking for any excuse to take money out of the equity market ahead of the Federal Reserve meeting on Wednesday.

US reporting season continues, with Herbalife after the closing bell tonight.

The heath food company managed to rally after Bill Ackman's torpedo presentation, but can its figures make the hedge fund manager eat his words?

Update by David Madden, Market Analyst, IG Index
28-Jul-14 [3:55pm] US Stock Markets

A big week for economic data from the US didn't get off to the best of starts, as both the services PMI and housing data disappointed.

This sent the Dow Jones below 16,900 and the S&P 500 below 1970.

Dollar Tree was a top riser as it confirmed that it would buy rival discount store Family Dollar.

Update by Jasper Lawler, Market Analyst, CMC Markets
28-Jul-14 [10:42am] Some mixed earnings news towards the end of last week in combination with geopolitical concerns surrounding Russia were enough to send markets lower with all major US benchmarks seeing declines.

Geopolitical concerns still lay in the background today but lower gold prices, a traditional safe-haven, suggests that markets are not so much risk-off but just inactive ahead of busy trading week.

There will be consumer confidence and unemployment data as well as this month's FOMC meeting and earnings from major companies in oil, healthcare, finance and tech this week.

Futures suggest the Dow Jones will open 9 points lower at 16,951 with the S&P 500 expected to open 2 points lower at 1,976 and the NASDAQ 4 points lower at 3,961.

With Microsoft, Visa, McDonald's and a few other Dow components not pulling their weight in earnings, the benchmark index failed for the seventh time to break through 17,150, while the S&P 500 is pulling back as it approaches 2,000.

With no stand-out earnings released today, it will likely come down to the pending home sales data to determine market direction.

New Homes sales were a disappointment last week in what some saw as a resurgent US housing market; today's number will reveal whether there are broad-based issues before it can even get going again.

Update by Jasper Lawler, Market Analyst, CMC Markets
28-Jul-14 [9:50am]

Stocks Slide as Bellweather Earnings Disappoint



Weak US earnings saw the stock markets close lower last week, with the Dow and the DAX seeing significant declines.

This morning, Asian markets are leading equities higher as Chinese industrial data impresses.



Update by Mark Priest, Market Analyst, ETX Capital
28-Jul-14 [9:18am] US earnings reports will be a little thinner today as investors ease themselves into the week, the big hitters such as Pfizer, McGraw Hill, American Express and Twitter all come out on Tuesday.

Over 75% of the US corporates that have reported so far have beaten expectations, so it is no surprise that we have seen the equity markets continue to trundle higher.

With today hosting a much thinner corporate calendar and the US services PMI along with June pending home sales, we might see a pause before the pace once again picks up.

Ahead of the open, we expect the Dow Jones to start 18 points lower at 16,942.

Update by Alastair McCaig, Market Analyst, 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 - 22 Jul 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
43,438 25,094 8 66,483 87,174 109,929 112,276 127,254 17,325 14,978
 
Changes from 15 Jul 2014 (i) Change in (i) Open Interest Changes from
Long Short Spreads Long Short Long Short Long Short
5,421 -2,836 0 -3,054 4,961 2,367 2,125 2,882 515 757
 
Percent of Open Interest for Each Category of Trader
Long Short Spreads Long Short Long Short   Long Short
34.1% 19.7% 0.0% 52.2% 68.5% 86.4% 88.2%   13.6% 11.8%
 
Number of Traders in Each Category (i) Total (i) Traders  
Long Short Spreads Long Short Long Short    
36 27 2 39 23 75 52 120    
 
Long/Short Commitments Ratios (i)   Long/Short Ratio
Ratio   Ratio Ratio   Ratio
1.7:1   1:1.3 1:1   1.2:1
 
Net Commitment Change (i)  
8,257  

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 29-Jul-14

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