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
22-Oct-14 [4:13pm] Gains on Wall Street have been tentative at best, despite earnings reports from the likes of Boeing that struck a more positive tone than those released 24 hours earlier.

Yahoo is racing away after its well-received numbers last night, but for now a cautious mid-week pause is the order of the day.

Even so, additional confident earnings numbers could still provide the basis for another move higher, with the S&P 500 still on course to challenge its long-term uptrend around the 1960 mark.

Ten-year treasuries are still holding up around the 2.2% yield, although the slightly stronger CPI number will have tempted a few more buyers in on expectations that the Fed is still mulling a mid-2015 rate hike.

Update by Brenda Kelly, Chief Market Strategist, IG Index
22-Oct-14 [3:58pm] US Stock Markets

Shares in the US edged higher in early trading thanks to better corporate earnings including strong results from Yahoo! and Boeing which raised its outlook for the year as well as further evidence of waning inflation from September's CPI easing pressure on the Fed to hike rates.

Higher food prices but lower energy costs contributed towards CPI remaining at 1.7% annual growth during September.

Inflation in the US is showing no real sign of wage pressures thanks to the low-paid nature of a lot of the jobs that have been created since the financial crisis.

With conflicting price direction coming from food and energy prices; US consumers may probably won't have any more disposable wealth and retail sales could remain stagnant.

Update by Jasper Lawler, Market Analyst, CMC Markets
22-Oct-14 [10:47am] It was another big session in US markets yesterday, with the Dow flying higher by more than 200 points and the NASDAQ up a scintillating 100 plus points.

This was all thanks to impressive quarterly results from Apple and a report purporting plans for further stimulus from the European Central Bank.

Today US markets look to open lower despite better earnings from Yahoo! after hours as investors question how long this rapid turnaround from the collapse seen last week can last given the ongoing difficulties in Europe.

Can Earnings Keep Us on the Up?

Key drivers for today's session will be the monthly CPI report as well as earnings from Boeing, Biogen, US Bancorp and Dow Chemical.

The Dow Jones has now recovered more than 50% of the decline since the all-time high in September, despite notably disappointing earnings from Coca-Cola, McDonald's and Verizon yesterday.

Another slip-up from Boeing may have investors questioning how far the index can go without the earnings to back it up with the Fed scheduled to end QE.

Boeing could well come to the rescue though, as the company has reported third quarter deliveries of 186 commercial airplanes, 9.4% higher than a year ago.

The only slight risk comes from a tightening US defence budget.

Earnings are expected to be $1.98 per share on revenue of $23.02bn.

AT&T are due to report after the close.

Futures suggest that the S&P 500 will open 2 points lower at 1,939, with the Dow Jones expected to open 16 points lower at 16,598 and the NASDAQ 4 points lower at 3,975.

Update by Jasper Lawler, Market Analyst, CMC Markets
22-Oct-14 [10:26am] Yahoo picked up the baton from Apple last night, keeping markets in positive mood thanks to good earnings numbers, but the big event is likely to be the CPI reading.

Downward pressure on the number is likely to come from the broad sell off in oil prices, which gives the Fed additional wiggle room on monetary policy, even if QE is still set to leave us next week.

More important is the outlook on rates and in this the FOMC is likely to emulate the BoE in due course, signalling that renewed global headwinds will be the key worry regarding the outlook for the US economy.

Ahead of the open, we expect the Dow to start 30 points lower at 16,586.

Update by Chris Beauchamp, Market Analyst, IG Index
22-Oct-14 [9:39am]

ECB Stimulus and Apple Results Send Stock Markets Higher



Strong earnings from Apple and rumours of ECB corporate bond buying sent stocks higher yesterday, with the Dow and the DAX adding more than 200 points.

US earnings season continues today, with updates from Boeing and Dow Chemicals.



Update by Mark Priest, Market Analyst, ETX Capital
22-Oct-14 [8:08am]

Dow Jones Daily Market Report

  • The Dow Jones is currently trading at 16,595.
  • Overnight, the market closed up 199pts (1.21%) at 16,632.
30 Minute Indicator Analysis

Neutral Stock Market The stock market index is trading lower than the 20 period moving average of 16,612.4 and higher than the 50 period moving average of 16,541.5.

1 Day Indicator Analysis

Falling Stock Market The market is lower than the 20 day moving average of 16,675.9 and lower than the 50 day moving average of 16,909.3.

Update by Gordon Childs, Editor, CleanFinancial
22-Oct-14 [8:08am] Corporate earnings seem to be the main theme of the week as the Dow bounced on positive news as Apple posted positive earnings.

This bullish trend did not falter yesterday evening despite poor results from McDonalds and Coca Cola, the latter posting revenues at $11.15bn below the forecasted $12.15bn.

Investors remained positive as housing data was above expected and the Dow closed up around 200 points at 16,615.

Boeing will be announcing their earnings before the Dow opens this afternoon, however, macro conditions in the economy seem to be overriding these results, whether they are positive or negative, for now.

Yesterday's improved sentiment resulted in Asian shares reacting positively.

The Nikkei rose 2.1% yesterday on the back of positive global policies from the EU, trading around 15,190.

In addition, the FTSE has recovered from last week's 15 month low, closing up 1.7% and looking to open up around 10 points this morning at 6379.

European bourses look to extend the upward trend this morning as investor's react to EU bond purchases and hence the stabilisation of growth within the EU.

Finally, commodities seem to be shaking off a couple of weeks of falling prices as Brent oil looks to break the $88 mark in the near future and gold pushing the $1,250 mark which was breached briefly yesterday.

However, silver still seems to be lagging behind, struggling to reach the $18 that many investors believe is the next level to look at.

Update by Toby Goar, Financial Trader, Spreadex
22-Oct-14 [7:34am] US indices soared on Tuesday led by shares in the Semiconductors & Semiconductor Equipment, Energy and Transportation sectors

The S&P 500 (1941.28) remains below its 20 DMA (1933.5 - negative slope), and its 50 DMA (1966.8 - flat slope).

European markets are expected to start on a positive note.

Update by InterTrader
22-Oct-14 [7:34am] American Shares - Crossing Over their 50 Day Moving Average:
  • Abbott Laboratories (ABT +2.24% to $42.39)
  • Actavis (ACT +2.41% to $232.13)
  • Alcoa (AA +4.21% to $16.35)
  • Apple (AAPL +2.72% to $102.47)
  • Avago Technologies (AVGO +5.63% to $82.38)
  • Bank of America (BAC +2.09% to $16.6)
  • Bed Bath & Beyond (BBBY +2.01% to $65.45)
  • Bemis Company (BMS +2.9% to $39.77)
  • Boeing (BA +2.26% to $127.12)
  • Cablevision Systems (CVC +3.44% to $18.33)
  • Cardinal Health (CAH +2.32% to $75.83)
  • Celgene (CELG +3.23% to $94.97)
  • Cigna (CI +2.33% to $92.71)
  • Cincinnati Financial (CINF +2.26% to $48.21)
  • Covidien (COV +4.46% to $89.25)
  • Danaher (DHR +2.03% to $76.25)
  • DaVita HealthCare Partners (DVA +2.64% to $75.5)
  • Discover Financial Services (DFS +2.68% to $64.38)
  • Dun & Bradstreet (DNB +2.25% to $118.32)
  • Eli Lilly (LLY +2.5% to $64.68)
  • Express Scripts (ESRX +3.51% to $74.03)
  • Fiserv (FISV +2.61% to $64.55)
  • Fossil Inc (FOSL +2.96% to $101.01)
  • General Dynamics (GD +2.14% to $123.89)
  • Genworth Financial (GNW +4.54% to $13.35)
  • Gilead Sciences (GILD +4.36% to $106.67)
  • Harley Davidson (HOG +7.31% to $62.65)
  • Illinois Tool Works (ITW +3.82% to $86.6)
  • International Flavors & Fragrances (IFF +2.08% to $98.31)
  • Lam Research (LRCX +2.64% to $73.2)
  • Legg Mason (LM +2.79% to $50.8)
  • Lorillard (LO +2.34% to $60.76)
  • McKesson (MCK +1.99% to $196.93)
  • MeadWestvaco (MWV +3.09% to $42.03)
  • Moody's (MCO +2.92% to $94.16)
  • Morgan Stanley (MS +2.22% to $34.06)
  • Newell Rubbermaid (NWL +2.73% to $34.58)
  • Norfolk Southern (NSC +2.6% to $109.85)
  • Patterson Cos (PDCO +2.22% to $41.46)
  • Progressive (PGR +2.57% to $25.51)
  • Qualcomm (QCOM +2.35% to $74.995)
  • Roper Industries (ROP +2.78% to $148.69)
  • Salesforce.com (CRM +2.16% to $57.24)
  • Target (TGT +2.24% to $61.64)
  • Textron (TXT +2.99% to $37.54)
  • Verisign (VRSN +2.61% to $56.61)
  • VF Corp (VFC +4.24% to $66.67)
  • Visa (V +2.63% to $213.31)
  • Walgreen (WAG +2.24% to $61.55)
  • Waters (WAT +9.87% to $107.17)
  • Wellpoint (WLP +3.61% to $120.43)
  • Xilinx (XLNX +3.72% to $43.21)
  • Yahoo (YHOO +2.29% to $40.18)
  • Zimmer Holdings (ZMH +2.15% to $101.32)


American Shares - Crossing Under their 50 Day Moving Average:
  • Coca-Cola (KO -6.03% to $40.68)


Update by InterTrader
22-Oct-14 [7:34am] Dow Jones Technical Analysis (30 mins chart)
  • Dow Jones pivot point: 16360
  • Our preference: Long positions above 16360 with targets @ 16680 & 16815 in extension.
  • Alternative scenario: Below 16360 look for further downside with 16140 & 15975 as targets.
Comment: The RSI lacks momentum.

Update by InterTrader
22-Oct-14 [6:29am] Yesterday's positive sentiment seems to be continuing as European stocks look to start on a firm footing.

Things looked a little nervy at the start of yesterday's session but reports that the ECB are thinking about purchasing covered corporate bonds in the secondary market gave the bulls the green light for a rally.

Investors speculated that the European Central Bank is not going to let the situation spiral into deflation and risk dragging the whole world back into recession.

From there it was all one way action right into the close and US and Asian markets carried on that bullish theme.

The feel good factor managed to push the Dow Jones 200 points higher to 16,638.

There's still a lot of debate and chatter about whether the gains are just a 'dead cat bounce', and considering that global growth woes are still so pervasive, it wouldn't take much of a data miss to slam this feline carcass back to the ground.

Update by Jonathan Sudaria, Market Dealer, Financial Spreads
22-Oct-14 [5:34am] Was it really a week ago that stock markets were starting their plunge towards multi-month lows amidst concern that central banks were stepping back against a backdrop of slowing global growth?

Yet here we are almost a week later with US markets posting their best one day performance of 2014, and we are rising sharply once again on the basis that corporate earnings are by and large, coming in in line with expectations.

Before we get too carried away, let's ask ourselves what has fundamentally changed from a week ago and you have got to say not that much.

Undoubtedly Apple's numbers were stunning but for every strong update we have Coca Cola, a miss, McDonalds, a miss, Google, a miss, IBM, a miss, SAP, a miss, and Philips, a miss.

None of these are small companies and the fact that none of them was able to meet expectations should worry markets but, when push comes to shove, you should never stand in front of a runaway train.

Rumours of ECB Corporate Bond Buying Lifts Stocks

Based on this, you have to surmise that stock markets are looking past these disappointing earnings reports and are continuing to hang future gains on the prospects for further stimulus, this time from the European Central Bank, and to pretend otherwise is quite frankly wishful thinking.

This time, the reports revolve around the prospect that the central bank could well look at purchasing corporate bonds in the coming months, in addition to the covered bond program that started this week.

While ECB officials have denied that any move is imminent, the nature of the speculation is so ECB; using unnamed sources to plant an idea in the markets consciousness and then let it germinate on fertile ground so that investors can grasp at straws and help push asset prices higher.

With the Fed due to end its QE program next week, markets are therefore more susceptible to the suggestion of further stimulus as they prepare for the US tap to be switched off.

Let's hope they're not too disappointed if the ECB once again fails to deliver, but for now investors appear to be buying the narrative, with Europe set to open near to one week highs this morning.

In the US, the latest CPI numbers for September are expected to reinforce concerns about weak inflation and act as a reminder to investors about the Federal Reserve's dual mandate.

On an annualised basis, prices are expected to fall to 1.6% from 1.7%, reinforcing the Fed's message of lower rates for longer.

Update by Michael Hewson, Senior Market Analyst, CMC Markets
22-Oct-14 [5:20am] The Dow Jones futures market closed higher on Tuesday. The high-range close sets the stage for a steady-to-higher opening on Wednesday. Stochastics and the RSI remain neutral-to-bearish signalling that sideways-to-lower prices are possible near-term. If the Dow extends the decline off September's high, April's low crossing is the next downside target. Closes above the 20 day moving average crossing would confirm that a short-term low has been posted.

Update by PipTrade
21-Oct-14 [3:52pm] The gains today have come in spite of some disappointing figures from American icons like McDonalds, Coca-Cola and Lockheed, but Apple trumps these easily.

Reports of the demise of the titan built by Steve Jobs have clearly been premature and the iPhone sales figures remind us how powerful the pull of a new gadget really is.

However, McDonalds seems to be locked in a permanent spiral of decline, with even its newer breakfast offerings seeing a drop in demand.

McDonalds needs to arrest the collapse in earnings, and while the buyers have stepped in today to take the stock off the lows, a failure to construct a rescue plan will see the shares head back to two-year lows in short order.

Update by Chris Beauchamp, 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 - 14 Oct 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
34,874 23,206 166 67,660 80,312 102,700 103,684 118,467 15,767 14,783
 
Changes from 7 Oct 2014 (i) Change in (i) Open Interest Changes from
Long Short Spreads Long Short Long Short Long Short
-5,192 311 -292 -7,834 -11,463 -13,318 -11,444 -13,805 -487 -2,361
 
Percent of Open Interest for Each Category of Trader
Long Short Spreads Long Short Long Short   Long Short
29.4% 19.6% 0.1% 57.1% 67.8% 86.7% 87.5%   13.3% 12.5%
 
Number of Traders in Each Category (i) Total (i) Traders  
Long Short Spreads Long Short Long Short    
27 26 6 34 21 65 49 101    
 
Long/Short Commitments Ratios (i)   Long/Short Ratio
Ratio   Ratio Ratio   Ratio
1.5:1   1:1.2 1:1   1.1:1
 
Net Commitment Change (i)  
-5,503  

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 22-Oct-14

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