The Dow Jones Industrial Average
The Dow Jones is a grouping of stocks made up of the top 30 publicly traded US companies. It was named after its founder, Wall Street Journal editor Charles Dow, and established in November 1882. Along with statistician Edward Jones and associate Charles Bergstresser, formed the company to provide financial news to those interested in the economic market. It is now owned by Dow Jones Indexes, with the majority owned by the CME Group. Continuous publications of industrial prices began in 1896, with the inclusion of 12 stocks. It then increased to 20 in 1916, and reached 30 in 1928. It has referenced the same number since then. The industrial portion of the name is largely historical and has nothing to do with the heavy industries.
As an indicator of how the market is doing, it is closely-monitored to keep track of current stock market activity. It stands as a reasonable gauge of the market index on a day-to-day basis.
There are several factors that influence its market performance, namely:
•Foreign and political events, i.e. war & terrorism
•Natural phenomena damaging to the economy
•Corporate and economic reports
The primary difference of the Dow Jones from other indices is that it is price-weighted, with some of its components having expensive share prices. It covers all industries: telecom, tech, finance and internationally-established companies. The value of the Dow is not the actual average of the prices of its component stocks, but rather the sum of the component prices. It is divided by a divisor, with the number calculated at 0.132319125 (March 2010). The divisor is never constant, it changes when one of the component stocks results from a stock split or stock dividend. When making the calculation, the Dow is kept fixed, so as to generate a consistent value for the index.
How to Trade with Dow Jones
1)Choose a respected trading platform suited to your trading strategy. Select the Indices tab, and then decide on Dow Jones from the list of underlying assets.
2)Identify if the price asset will rise (CALL option) or decline (PUT option).
3)Enter an expiry time. A research on the Dow 30 will give you an idea on making a prediction about its performance. Employ an effective trading strategy to experience a rewarding monetary return.
For some, trading with the Dow Jones is financially rewarding especially with binary options. Those who are adept in the jargons and ways of the industry in question will have an easier time in completing a transaction. Ample information is also provided online, where most investors can base their intuitive judgment when it comes to the actual trading hours.
•The trading hours for Dow Jones is 15:00 to 21:00 GMT / 10:00 to 16:00 EST, Monday to Friday.