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What Is The DOW JONES Index?

What Is The DOW JONES Index? is the Dow Jones index (DOW JONES) submit the financial indicators set up to measure the performance of financial markets, and a more financial indicators up by economists and financial markets as well as traders and investors on the different kinds. Through the following Guaranteed Money System Review we will take a light on the DOW JONES index, which is considered one of the most important indicators to measure the performance of the US economy and the US stock market, and one of the most important global indicators that affect their performance on the global economy, as well as how to take advantage of it in circulation.

Dow Jones
Dow Jones

What is the DOW JONES index?
DJIA (Dow Jones Industrial Average) which is known simply as DOW JONES or DJIA, is a financial index measures the performance of the US stock market, was created for the first time on 26 May of the year 1896, making it one of the oldest financial indicators, by Charles Dow ( charles Dow) editor of the famous financial newspaper “Wall Street Journal” and co-founder of the founding of the company “Dow Jones & company”. Currently, there is the Dow Jones index in the ownership of the company “S & P Dow Jones Indices” subsidiary “S & P Global”. The DOW JONES index measuring the performance of the 30 largest companies traded in the US stock market, and is the second oldest after the financial index “Dow Jones Transportation Average” who tracks the shares of the transport sector and the performance of companies, also established by Charles Dow.

Recipe “industrial”, which carries the name of the index does not mean it measures active in the industrial sector only companies, but also has historical significance only, many of the thirty companies listed in the index at the moment is a non-industrial companies.

The Dow Jones index of 30 is a weighted index with a market capitalization, is adjusted on an ongoing basis in the case of certain companies listed in the index modify the price. The value of the index does not calculate the average price for the total listed companies, but it is weighted by dividing the price of shares of listed companies on the specific number so that the index is not affected when a change in the shares of these companies. Comprising the Dow big companies like IBM’s famous Microsoft Corp. and Boeing aircraft manufacturing company and HP computers and Coca-Cola and Walt Disney and American Express’s largest manufacturer of credit cards in the United States. To calculate the index value is split shares prices of 30 companies listed on the denominator is called “DJIA divisor”, it is to change this denominator in the case of the division of shares in a company the price of occurrence (stock split) or any amendment would impact on the index.

How can you trade DOW JONES Index

Became a trading DOW JONES index at the moment available for a wide class of traders around the world, it is during the trading of this indicator will be able to take advantage of the fluctuations taking place in the overall performance of the US stock market. Although you may not The Dow Jones Industrial Average traded directly, but there are many financial instruments that allow you traded funds held ETFs, options contracts, futures and CFDs.
Futures

DOW JONES Index are traded through futures contracts through the Chicago Stock Exchanges “Chicago Mercantile Exchange” and “Chicago Board of Trade”, is among the most widely used financial instruments to trading the Dow Jones index because they provide multiple benefits. Where it is trading more than hundreds of thousands of contracts on a daily basis. Futures trading to the Dow Jones provides significant liquidity and high leverage in addition to longer periods of trading compared to the stock market. This is because the futures market is open 24 hours a day from Monday to Friday. Featuring all the futures contract for the Dow Jones index of the existence of the date of expiry, it will be on the third Friday of each month. Where the traders to close their positions before the deadline. And Dow Jones trading through three types of futures contracts, which are as follows: – Contracts E-mini Dow ($ 5): are traded under the symbol “(YM)”, and the amount per contract value of $ 5, while a margin initial US $ 3575. – DJIA contracts ($ 10) Futures: are traded under the symbol “(DJ)”, and one of the contract value to $ 10, while an initial margin of $7,150. – Big decades Dow DJIA ($ 25): traded under the symbol “(DD)”, and one of the contract value to $ 25, while an initial margin of $ 17,875. To be able to trade one of the types of index futures DOW JONES that we have mentioned, you will need to open a trading with specialized brokerage firm account offering futures trading services to be licensed by the Commission for futures trading “Commodity Futures Trading Commission (CFTC)”. With every transaction you open or close it you will have to pay the usual fees to the brokerage company costs as well as fees for “National Futures Association (NFA)” and the market fees. Most brokers and specifies the minimum amount can be deposited between $ 5,000 and $ 10,000.

CFD

You Dow Jones trading through CFD Society Software CFDs (contracts for difference), a modern financial derivatives enables traders to buy and sell many of the financial instruments without owned. CFDs are traded on the Dow Jones index in the same way by trading CFDs on stocks. DOW JONES index can be traded through CFD considered the best way for novice traders with small accounts, brokerage companies are offering these derivatives do not require a large initial margin unlike specialized brokerage firms in the futures. In addition to lower fees and commissions high financial leverage up to 200: 1 by the financial intermediary.

summary

DOW JONES Index traded like other financial instruments for a full understanding of how markets work and the factors that will move prices, whether fundamental or technical factors needed, and traded much like stocks traded. You’ll also need knowledge of another political and economic events that would affect the US stock market, as well as events that may affect the thirty companies listed in the index such as publishing earnings reports and acquisitions and operations of credit rating from international credit rating agencies.