If you want to speculate on the outlook for the US economy, trading the Dow is a great way to do it. The Dow Jones Industrial Average is one of the best known stock market indices in the world. It tracks the prices of thirty of America's most important companies including such global champions as Coca Cola, Microsoft and McDonalds.
As with all stock-market indices, a handful of the most influential companies can sway the performance of the entire index. The most important Dow members aren't necessarily its biggest companies, but those with the highest stock prices. So, a company with a price of $100 would have ten times as much weight as one with a price of $10.
The Dow's actual trading hours are between 9.30am and 4pm New York time. This is when most of the action and the most competitive price quotes are likely to occur. With Tradefair Spreads, however, you can trade the Dow from 7am until 9.15pm, London time and overnight.
Big price-movements are often seen in the first hour of the official stock-exchange opening. That's because investors are still digesting big news stories that have broken overnight and on the day. Also, not all Dow stocks always start trading simultaneously. So, early prices aren't necessarily the best indication of the day's trend.
On Tradefair Spreads' platform, the Dow Jones index is referred to as 'Wall Street.' If you're doing a trade for a few hours or days, a "rolling daily" spread bet may work out cheapest. For trades lasting more than a month, a "futures" style bet may offer better value.
The information in this article is for educational purposes only, it does not constitute advice and should not be construed as solicitations of any order to buy or sell. Past results are not necessarily indicative of future results.