What Are The Dow Futures? Current Status

What Are The Dow Futures?

The Dow futures are the future derivative contract based on the Dow Jones Industrial Average (DJIA) market index. The Dow futures contracts are derived from the Dow Jones Industrial Average (DJIA) as E-mini Dow Futures having a lot size of 5, which means 1 point equals $5.

Current Price of Dow Futures

Where Do Dow Futures Trade?

All of the Dow derivative future contracts are traded in the Chicago Mercantile Exchange (CME) having quarterly expiry (March, June, September, and December), and are traded on the CME Globex exchange almost 24 hours a day, from Sunday afternoon to Friday afternoon.

Dow Futures Trading And Leverage

As we know, the Dow futures are based on the Dow Jones Industrial Average (DJIA) makes up of 30 stocks. Dow Futures trade with a multiplier that increases the cost of the futures contract to add leverage to the trade. The standard multiplier for the Dow futures is 10, basically meaning that Dow Futures are working on 10:1 leverage. If the Dow Futures are trading at $20,000, a single futures contract would have a market value of $200,000.

For every fluctuation of 1 point in the Dow Jones Industrial Average, the Dow Futures will increase or decrease $10.  For example, the DJIA rises from 20,000 to 20,200. The futures buyer will receive a deposit in his brokerage account of $2000 and the seller’s account will get deducted $2000.

The Dow Futures contracts are usually used for hedging or speculation purposes. Dow Futures contracts are used to hedge or offset investment risk by general commodity owners like farmers or portfolios with unwanted risk exposure offset by the futures position.

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