20th Nov 2009 by JonB
Futures allow you to buy or sell a certain good at a certain price for a certain amount of time in the future. Futures of the DJIA allow you to buy or sell shares of the DJIA index at some date in the future allowing you hedge any longs you have in the DJIA by shorting the future, or hedge any shorts you have in the DJIA buy going long the future. Of course futures are primarily used for the leverage and act as simple ways to bet on or against a market without needing much volatility of price to make large profits. Of the 3 major index futures (S&P 500, Nasdaq, DJIA) the DJIA is least traded by volume. the S&P futures usually trade 10x as much because the S&P represent 500 companies, while the DJIA only represents 30. The ticker symbol for the DJIa future is YM.
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