Deciding between Dow futures trading and the S&P 500 really comes down to your personal preferences and level of comfort. Because the S&P 500 is made up of a much larger pool of companies, there is a higher degree of diversification.
E-mini Dow Industrials futures trading is an agreement between a buyer and seller at a specified price in a contract that will expire on a specific date. Traders can enter and exit positions any time prior to the expiration date in financially settled futures like the E-mini Dow 30 Industrials contract.
The Dow Jones industrial average was created by Charles Dow. It was first calculated in May of 1896 and originally consisted of just 12 companies. Over its long rich history, it has changed and grown many times to reflect the evolving US economy.
The E-mini Dow Industrials futures contract is a tradeable instrument representing 30 of the largest stocks across a number of business sectors. It is one of the oldest and most watched stock market indexes. A one point move in the standard contract equates to $5 of profit or loss, and a one point move in the micro 1/10th size contract equates to $.50 of profit or loss. Each futures contract, like the E-mini Dow 30 Industrials futures, has a unique set of contract specifications that are set by the futures exchange.
E-mini Dow industrial futures contracts are traded on the Chicago Mercantile Exchange (CME)(Globex System). Dow Jones futures trading during the Globex session is available from Sunday at 6:00 PM Eastern Time until Friday 5:00 PM Eastern Time, giving traders the ability to capture unique trading opportunities while the stock market is closed.
Yes, you can trade E-mini Dow industrial futures with NinjaTrader. NinjaTrader is an industry-leading futures broker offering low commissions, low margin rates, and safety of your account funds. With NinjaTrader you can trade dozens of the most actively traded futures markets in the world including the E-mini futures contract.
The E-mini Dow industrial futures is calculated based on its characteristic as a price-weighted index, where stocks with higher prices are weighted more heavily; the greater the price of a stock, the greater the effect on the overall price of the index.
The E-mini Dow industrial futures are traded on a well-regulated exchange where orders are matched and cleared on a fair and level playing field with full price and order transparency. Traders can place buy and sell orders through their broker to enter or exit a position virtually 24 hours a day in the E-mini Dow industrial futures market.
The E-mini Dow industrial futures is an important economic indicator globally. Business activity from these 30 largely diverse stocks can have a significant influence on the overall health of the US and world economies.
Once of the advantages of trading E-mini Dow industrials futures contracts is direct market access for speculating on the price movement of the E-mini Dow industrials stock index. The E-mini Dow industrial futures are a popular traded stock index futures as it is a broad proxy for the entire stock market. It provides good liquidity virtually 24 hours a day, lower trading capital requirements, and like all futures, tax benefits over stock trading. E-mini Dow futures trading can also offer you more opportunities and flexibility over individual stocks, options, and ETFs with their many limitations.
Like every futures contract, the primary risk here is that the price of the E-mini Dow industrial futures will go against the trader’s position. Economic news, earnings reports, changes in interest rates, and investor sentiment can all have a significant effect on the price of E-mini Dow industrial futures.
The good news for prospective traders is that they can begin with costs and margins as low as $50. This is because Micro Dow E-mini futures are one-tenth the size of standard E-mini contracts.
Under most circumstances, a Micro Dow E-mini future will expire on a quarterly basis. This means each contract will settle at the opening level of its respective index after a three-month period. At this point, your options are to either offset the position and close out the trade, let it expire and enter delivery, or roll the contract over to a new expiration date in the future.