Dow Jones (Wall Street) Spread Betting
Spread Betting
Dow Jones Spread Betting

Dow Jones Spread Betting



Welcome to Spread-Betting.org's review of spread betting on the Dow Jones.

Nearly all spread betting companies let you speculate on the 30 companies that make up the Dow Jones, see below.

A more popular trade however is the Dow Jones stock market index itself, i.e. speculating on an index of 30 leading US shares. Along with the FTSE 100 and EUR/USD, the Dow Jones is one of the most popular spread betting markets.

Here we talk you through the basics of spread betting on the Dow Jones as well as its component shares. Readers should note that the Dow Jones stock market index is also known as the ‘Wall Street’, ‘US 30’ and ‘USA 30’.


Where to Spread Bet on the Dow Jones



Many spread betting companies provide spread betting on the Dow Jones, as well as a broad range of other indices markets:

Stock Market Index
Financial Spreads - Stock Market Index IG - Stock Market Index City Index - Stock Market Index ETX Capital - Stock Market Index
FTSE 100 daily (spread size) 0.7 1 1 1
Dow Jones daily (spread size) 1 2 1 2
DAX 30 daily (spread size) 1 1 1 2
Indices (min stake) £1 £1 £0.50 £1
Indices (more available) More Index markets available with Financial Spreads? More Index markets available with IG? More Index markets available with City Index? More Index markets available with ETX Capital?
  Index spread betting may also be available with other companies - notes.


Where to Spread Bet on Stocks in the Dow Jones



As mentioned above, most spread betting firms offer markets on the shares that go to make up the Dow Jones index (Wall St.).

The firms normally also offer a broad selection of other US stocks:

Financial Spreads IG City Index ETX Capital
Wall Street Shares Financial Spreads: Wall Street Shares Markets? IG: Wall Street Shares Markets? City Index: Wall Street Shares Markets? ETX Capital: Wall Street Shares Markets?
S+P 500 Shares Financial Spreads: S+P 500 Shares Markets? IG: S+P 500 Shares Markets? City Index: S+P 500 Shares Markets? ETX Capital: S+P 500 Shares Markets?
Nasdaq 100 Shares Financial Spreads: Nasdaq 100 Shares Markets? IG: Nasdaq 100 Shares Markets? City Index: Nasdaq 100 Shares Markets? ETX Capital: Nasdaq 100 Shares Markets?
Spread betting markets on US Shares may also be available through other companies. Notes.


A Guide to Financial Spread Betting on the Dow Jones



As an example, let's assume you are considering trading the Dow Jones, so you go on a financial spread betting website, like Capital Spreads, and see they are offering:

Dow Jones Rolling Daily
: 11890 - 11892

How this market works.


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:

  Spread Betting Above 11892, or
  Spread Betting 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



Financial spread betting on the stock market index to rise in value

You Decide Whether to Buy or Sell: The Dow Jones moving:

  Spread Betting Above 11892? or
  Spread Betting Below 11890?

You Might Decide to Go Long:   Spread Betting 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



Spread betting on the stock market index to fall in value

You Now Choose Whether to Go Long or Short: The Dow Jones going:

  Spread Betting Above 11892? or
  Spread Betting Below 11890?

Let's Assume You Choose to Sell:   Spread Betting 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:



Guides to US Stocks and Shares



We have created a lot of individual trading guides for our readers, including guides that cover some of the largest US firms.

For US stocks and shares the guides answer key questions such as, “Where can I spread bet on the stock?” and “Where can I get live prices can charts for the share?”.

Each guide also has a worked trading example.

To access the guides, simply click on the relevant company link below.


US Stocks Spread Betting Guides
Bank of America Bank of America spread betting guide
Chevron Chevron spread betting guide
Exxon Mobil Exxon Mobil spread betting guide
General Electric General Electric spread betting guide
IBM IBM spread betting guide
JP Morgan JP Morgan spread betting guide
Microsoft Microsoft spread betting guide

Also see:

Demo Accounts for Spread Betting on the Dow Jones



One way of getting to grips with spread betting, testing out trading ideas or trialling a spread betting platform for free is to open a demo account.

These make use of virtual funds and usually provide a broad range of stock market indices, such as the Dow Jones, for investors to speculate on.

The following spread betting companies are currently offering a free spread betting demo account:

Spread Betting
Financial Spreads IG City Index ETX Capital
Demo Account Demo Account available with Financial Spreads? Demo Account available with IG? Demo Account available with City Index? Demo Account available with ETX Capital?
  Spread betting may also be available with other companies - notes.


Spread Betting on Indices



At Spread-Betting.org we want to help all investors make more informed trading decisions and have created a comprehensive guide to spread betting on stock market indices.

The guide covers the basics of spread betting on indices, such as where to trade tax free* and how to spread bet on stock markets, as well as the latest news and analysis, and an indices spread betting price comparison.

For more information please see, Spread Betting on Indices.



Financial Spreads Review
Financial Spreads - tax free* trading on over 2,500 spread betting markets. With a Financial Spreads Account you can trade commission free, 24 hours a day on stock market indices, forex, shares commodities and...read review » Financial Spreads.


Risk Notice

Dow Jones Spread Betting - edited by Maxine Price, 25 January 2017.


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