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Dow Jones Options & Futures Trading
Dow Jones Industrial Average Options
DJX is the symbol for options based on The
Dow Jones Industrial Average (DJIA). The DJX index option contract
is based on 1/100th (one-one-hundredth) of the current value of the
Dow Jones Industrial Average. So, for example, when DJIA is at 11,000,
the DJX level will be 110. The DJIA--the index on which the DJX contracts
are based--is the oldest (established 1896) continuing U.S. market index,
and the DJIA probably is the world's best known stock index to individual
investors. Options on the Dow are now available from 7:00 a.m. to 8:15
a.m. Chicago time on the new
CBOEdirect screen-based trading system, and also during regular
trading hours from 8:30 a.m. to 3:15 p.m.
Dow Jones Index Options Contracts & Futures
Trading Contracts
| Securities |
Issuer |
Type |
Symbol |
|
Dow Jones Industrial Average |
CBOE |
Options |
DJX |
|
Dow Jones Industrial Average LEAPS |
CBOE |
Options |
MUT |
|
Dow Jones Index Options Contract Trading
Since their introduction in 1997, DJX options have grown
to become some of the most popular index options worldwide, with open
interest (as of August 2001) of more than 650,000 contracts, and average
daily volume around 30,000 contracts. This popularity leads to four
fundamental reasons for using DJX options:
- Simplicity
Investors are able to trade a broad market by making one DJX trading
decision rather than making the many decisions involved with investing
in numerous individual stocks.
- Insurance
DJX options offer a convenient and easy way to help reduce the market
risk of a broad market portfolio, without disrupting the make-up of
the portfolio.
- Predetermined Risk
DJX option purchasers risk only the premium they pay for the option,
plus commissions. The risk is both known and limited.
- Leverage
Purchasing DJX options, instead of buying or selling numerous individual
stocks, provides an investor with an additional opportunity to use
investment capital elsewhere. For a relatively small percentage gain
in the underlying index, a DJX option can increase in value by a multiple
of that gain, assuming the correct option series was selected.
Dow Jones Industrial Average Futures Trading
The CBOT DJ futures
trading contract allows a broad sector of market participants to hedge
commodity and inflation exposure and achieve portfolio diversification
through a standardized futures trading contract. Designed to be a highly
liquid and diversified benchmark for commodities as an asset class,
the DJ is a unique product that includes energy, grains, oilseeds, metals,
soft commodities, and livestock. Unlike other commodity indexes, the
DJ emphasizes the economic significance of its components. Calculation
of the index relies primarily on liquidity data, as well as production
data, to determine its component weightings.
| Securities |
Issuer |
Type |
Symbol |
|
Dow Jones Industrial Average |
CBOT |
Futures |
ZD/DJ |
|
Dow Jones Industrial Average |
CBOT |
Options on Futures |
OZD/DJC
DJP |
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- Related Links:
-
Options Trading - Options trading article about basics in the
options market as well as about advanced trading system used by professional
options traders.
-
DJI Quotes
- QQQQ and SPY uncovered options trading, the best trading system
available online.
-
E-mini Charts -
SBV, volume and other technical charts for S&P 500 e-minis, Russell 2000
e-mini.
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QQQQ Options Trading
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