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DJIA Index Futures Price
The Dow Jones Industrial Average Index futures price is different than the DJIA Index price in the cash (physical) market. Generally, the price of a commodity for future delivery is higher than the cash price due to carrying costs. This is called contango. The opposite of contango is backwardation. Backwardation is when the price of a commodity for future delivery is lower than the cash price. Backwardation is normal in a “seller’s market.”

When you trade DJIA Index futures, your futures price depends on where you get into the market. After you post your initial margin, your profit or loss depends on where you enter and exit the market (minus transaction costs).

For example:

The size for one DJIA Index futures contract is $10 times the point the value of the index. So each 1 point move equals $10. As the market moves your account value adjusts. If your account value drops below the maintenance margin a margin call is due. A margin call can be met by offsetting positions or adding money to your account. 

DJIA Index futures contract trading can be both highly profitable and extremely risky because of leverage. Leverage is the ability to control a large quantity of a commodity for a very modest investment. That investment is called margin. Be certain you understand the risk of trading futures on margin before you consider opening a futures trading account.

Trading futures is like driving a car without insurance. You save the insurance premium, but if you crash you will wish that you were insured. If you have very deep pockets or deal with the physical DJIA Index product then futures may be for you. If you are a speculator with a limited amount of risk capital then DJIA Index options are a better way for you to invest in the DJIA Index market.

Click here to view the current futures price of the DJIA Index.

Click here to contact a commodities broker with experience in the Dow Jones Index market.