DOW Jones Futures
Most, if not all investors including the general population is aware or has heard of Dow Jones Industrial Average. In fact, whenever a lay person switches his TV to CNBC or any other business channel or news, they are bound to hear the anchor talk about how the DOW, the NASDAQ, and the S&P 500 are doing for the day. As you may have realized by now "the DOW" is quite popular, and is synonymously used for measuring the performance of the market. It must be noted that even though many people generally use the DOW just to measure how the market is doing, it truly doesn't represent the entire market. The DOW or the DOW Jones Industrial Average comprises of 30 Stocks that make up this index. The 30 companies (the companies that are in the list changes from time to time) that are included in this index are large, publicly owned American corporations. The corporations that included in the index include Wal-Mart, Procter & Gamble, JP Morgan Chase, Kraft Foods, McDonald's, Microsoft, Intel, IBM, General Electric, Home Depot, Coca-cola, Chevron, and Boeing to name a few.
DOW Jones Futures and CME Group
As stated earlier, the DOW or DOW Jones Industrial Average is an index comprising of 30 of the most "influential" and large American Corporations. Based on this numerous futures products are offered to investors. Earlier, the Dow Jones index, and other indices bearing the DOW name were operated by Dow Jones & Company, and then by News Corporation when Dow Jones & Company was taken over by News Corporation. In February, the Dow Jones Index business was sold to CME Group which bought 90% stake in the indices business. This purchase by CME Group would allow it to create new futures products based on the DOW brand name - and as such new Dow Futures, and obviously control over existing DOW indices.
DJIA and DOW Jones Futures
This article will basically cover futures products based on the DOW Jones Industrial Average rather than any futures product that have DOW name attached to it. As stated earlier, there are many indices with DOW attached to them, the futures product discussed here will strictly be limited to Dow Jones Industrial Average (DJIA). Among the Index Futures offered by Chicago Mercantile Exchange (CME) bearing the DOW name are the E-Mini Dow, the Big DOW DJIA, and the DOW. All the 3 Index Futures are based on the DOW Jones Industrial Average Index. The 3 Index Futures have different multipliers that affect their contract size. The E-Mini Dow, which has a symbol of YM and a Bloomberg Code of DMA has a multiplier of $5. This means that the contract size of this particular future is $5 times the DOW. The DOW index future has $10 multiple, and has a symbol of DJ, and a Bloomberg Code of DJA. As with the $5 E-Mini Dow, the DOW with its $10 multiplier will have 1 contract valued by $10 times the DOW. The Big DOW DJIA has a $25 multiplier, a symbol of DD, a Bloomberg Code of EEA, and a Reuters Code of DJF.