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Index Options & Futures Trading - Dow Jones
Industrial
DJI 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 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 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 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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