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Trading Futures and the E-Mini Dow,
Dax, and Russell Explained

Mini Dow Jones Index Futures are an electronic futures contract based on the 30 most actively traded stocks in the U.S., including the likes of Microsoft, Coca-Cola, and Boeing. These futures contracts allow traders to speculate on the direction of movement in the index with a highly leveraged contract. Futures offer greater liquidity than their larger counterparts, allowing for tighter bid-ask spreads and access to overnight activity.

Trading Mini Dow Jones Index Futures is relatively straightforward. Traders can buy or sell a contract based on their outlook of the index, with profits or losses being made when the market moves in the opposite or desired direction. Orders can be placed using a broker or through an online trading platform. As with any futures contract, stop-loss and profit limit orders are recommended to limit losses and maximise gains.

The index is calculated by taking into account the total market capitalization of all 30 companies included in it. This data is adjusted for stock splits and spin-offs throughout its lifetime to ensure accurate price discovery. The value of each company’s stock is taken into consideration when calculating the index’s daily value.

The Mini Dow Jones Index is traded on the Chicago Board of Trade (CBOT). The exchanges offer several contracts for futures trading purposes, including a mini dow futures contract and micro dow futures contract. Each tick represents the equivalent to $5 per point of the underlying index.

Trading months for the Dow Jones Index are quarterly including March, June, September, and December with expiry dates ranging from one to three years in advance depending on the current month being traded. This allows traders to take advantage of longer-term trends and better plan their positions.

In addition to the Dow Jones Index Futures, traders may also consider trading mini DAX futures. The Deutsche Aktien Indice (DAX) is a stock market index comprised of 30 major German companies listed on the Frankfurt Stock Exchange. It acts as a benchmark to gauge the performance of the German economy and represents some of the most influential firms in Europe.

The DAX is calculated using a price-weighted index methodology, meaning that stocks with higher prices have greater weight in determining their value. Because of this, larger companies are usually given more importance when it comes to calculating their daily returns. Additionally, factors such as company size and volume traded can also be taken into consideration.

DAX futures are traded on the Eurex Exchange with contract terms and a minimum tick size of 1 point for 25 Euros per contract. mini DAX futures are also available for 1 point equals 5 Euros.Trading months for include, March, June, September, and December with expiry dates ranging from one to three years in advance depending on the current month being traded.

In conclusion, while both Dow Jones Index and e-mini DAX futures provide traders with an opportunity to speculate on the movements of two of the largest indexes in the world, they can both also be utilized to take advantage of long-term trends or to hedge an investment portfolio. As with any form of speculative trading, it is important to understand the risks before entering a position and to be aware of the various product specifications in order to make informed decisions.

For more information about Dow Jones index or DAX futures, please visit our website for further resources and guidance or call (800)454-9572 to speak with one of our licensed, experienced brokers today! You can also fill out an application online here and one of our brokers will contact you within twenty-four hours.

We hope this article has provided you with insight into these popular trading instruments and how they can be utilised as part of your overall investment strategy.

*Futures Trading is risky and not suitable for everyone.


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