Dow Jones Spread Betting

Where to Spread Bet on the Dow Jones

Stock Market Index
FTSE 100 daily (spread size)	1	1	1	1	1	1	1
Dow Jones daily (spread size)	2	2	2	2	1	2	2
DAX 30 daily (spread size)	1	1	1	1	1	2	1
Indices (min stake)	£1	£1	£1	£1	£0.50	£1	£1
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A Guide to Financial Spread Betting on the Dow Jones

The Market:	Dow Jones Rolling Daily
Spread Betting Price:	11890 - 11892
How This Works:	You can spread bet on the Dow Jones Rolling Daily market to move:   Above 11892, or   Below 11890 This is a 'Rolling Daily' spread betting market and so there is no closing date. If you don't close your trade and the session ends then your trade will automatically roll over to the next session. If a trade is rolled over then you will normally either receive or pay a small fee for overnight financing depending on the direction of your spread bet. For further information also see Rolling Daily Spread Bets.
Traded Units:	Spread bets on indices like the Dow Jones market are made in £x per point. Where a point is 1 point of the stock market index's price movement. E.g. if the Dow Jones moves by 30 points then you would win or lose 30 times your stake.
Stake Size:	You choose how much you would like to stake per point, e.g. £1 per point, £2 per point, £5 per point, £10 per point etc.
Brief Example:	If you decided on a stake of £4 per point and the Dow Jones moves 29 points, you would win or lose £4 per point x 29 points = £116.

Trading Example | Taking a Long Position on the Dow Jones

You Decide Whether to Buy or Sell:	The Dow Jones moving:   Above 11892? or   Below 11890?
You Might Decide to Go Long:	Above 11892
You Pick a Stake Size, Choosing:	£2 per point
So Now What Happens?	You will win £2 for every point the Dow Jones pushes higher than 11892 You will make a loss of £2 for each point the Dow Jones pushes lower than 11892
When Betting on a Market to Go Up Your P&L =	(Closing Price - Opening Price) x stake per point
Trading Scenario 1	The Dow Jones moves higher and the financial spread betting market is revised and moved to 11956 - 11958.
Close for a Profit?	You could choose to keep your spread bet open or close it in order to lock in a profit. In this case you opt to close your position by selling the Dow at 11956.
Your P&L =	(Closing Price - Opening Price) x stake per point
	(11956 - 11892) x £2 per point
	64 points x £2 per point
Your P&L =	£128 profit
Trading Scenario 2	The Dow Jones moves lower and the spread trading market changes to 11821 - 11823.
Close and Limit the Loss?	You could decide to leave your bet open or close it to limit your losses. In this case you choose to close your trade by selling at 11821.
Your P&L =	(Closing Price - Opening Price) x stake per point
	(11821 - 11892) x £2 per point
	-71 points x £2 per point
Your P&L =	-£142 loss

Worked Spread Betting Example | Taking a Bearish View of the Dow Jones

You Now Choose Whether to Go Long or Short:	The Dow Jones going:   Above 11892? or   Below 11890?
Let's Assume You Choose to Sell:	Below 11890
You Select How Much to Risk, Let's Assume You Choose:	£1 per point
Now What Happens?	You will make a loss of £1 for each point the Dow Jones rises above 11890 You will make a profit of £1 for each point the Dow Jones falls below 11890
When You Sell a Spread Bet Your P&L =	(Opening Price - Closing Price) x stake per point
Trading Scenario 3	The Dow Jones falls and the market is moved to 11793 - 11795.
Time to Lock in Your Profit?	At this point, you can choose to let your spread bet run or close it, i.e. close your trade for a profit. In this instance you choose to close your position by buying at 11795.
Your P&L =	(Opening Price - Closing Price) x stake per point
	(11890 - 11795) x £1 per point
	95 points x £1 per point
Your P&L =	£95 profit
Trading Scenario 4	The Dow Jones increases and the spread betting market is revised and is set at 11995 - 11997.
Time to Limit Your Loss?	At this point, you could choose to leave your spread bet open or close it and restrict your losses. In this case you decide to close your bet by buying the market at 11997.
Your P&L =	(Opening Price - Closing Price) x stake per point
	(11890 - 11997) x £1 per point
	-107 points x £1 per point
Your P&L =	-£107 loss

Dow Jones Notes:

• Online spread betting market from Capital Spreads, 10 November 2011
  
  
• Most spread betting companies will also give you the option of financial spread trading on the Dow Jones in euros/point and dollars/point
  
  
• In addition, spread trading also allows you to speculate on a wide variety of other financial markets. For more details see:
  
  
  • Stock Market Spread Betting
  • Forex Spread Betting
  • Commodity Spread Betting
  • Shares Spread Betting

Demo Accounts for Spread Betting on the Dow Jones

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Spread Betting on Indices