Dow jones futures options. The easiest and most cost-effective avenue to trade the Dow Jones Industrial Average (DJIA) is through an exchange traded fund (ETF) (See.

Dow jones futures options

ES Futures Options - A Better Way to Daytrade the Futures Markets

Dow jones futures options. An electronically traded futures contract representing a portion of standard DJIA futures, E-mini Dow futures offer an accessible alternative to manage exposure.

Dow jones futures options


Strategies to trade the Dow Jones Industrial Average. If you have limited capital but want to trade the index, options on the " Diamonds " — the colloquial term for the DJIA ETF — might be a good way to go, assuming you know the risks involved in option trading.

We demonstrate how to buy options on the DJIA in the following sections. For the purposes of this exercise, we focus on the September options — which expire on September 18, — on the Diamonds.

For tips on how to select the right option, see Pick the right options to trade in six steps. Specifically, we focus on the following option strategies:. Note that these examples do not take into account trading commissions, which can significantly add to the cost of a trade. You would buy or initiate a long position on a call if you were bullish on the underlying security.

You would initiate a long put position if you were bearish on the underlying security. In this instance, you are looking for the Dow to decline to at least 17, by option expiry, which represents a 3.

If you sell them at this price, you would break even, with the only cost incurred being the commissions paid to open and close the option position. The bull call spread is a vertical spread strategy that involves initiating a long position on a call option and a simultaneous short position on a call option with the same expiration but a higher strike price.

The objective of this strategy is to capitalize on a bullish view on the underlying security, but at a lower cost than an outright long call position.

This is achieved through the premium received on the short call position. Note that you pay the ask price when you buy or go long on an option, and receive the bid price when you sell or go short on an option. The bull call spread can significantly reduce the cost of an option position, but it also caps the potential reward. The bear put spread is a vertical spread strategy that involves initiating a long position on a put option and a simultaneous short position on a put option with the same expiration but a lower strike price.

The rationale for using a bear put spread is to initiate a bearish position at a lower cost, in exchange for a lower potential gain. Buying options on the Dow Jones is a good alternative to trading the ETF because of the substantially lower capital requirements for trading options, as long as one is familiar with the risks involved.

Dictionary Term Of The Day. A conflict of interest inherent in any relationship where one party is expected to Broker Reviews Find the best broker for your trading or investing needs See Reviews. Sophisticated content for financial advisors around investment strategies, industry trends, and advisor education.

A celebration of the most influential advisors and their contributions to critical conversations on finance. Become a day trader. Types of Option Strategies For the purposes of this exercise, we focus on the September options — which expire on September 18, — on the Diamonds.

Specifically, we focus on the following option strategies: Unlimited You would buy or initiate a long position on a call if you were bullish on the underlying security. Bullish on the Dow Jones, but want to reduce premium paid Options selected: Bearish on the Dow Jones, but want to reduce premium paid Options selected: The Bottom Line Buying options on the Dow Jones is a good alternative to trading the ETF because of the substantially lower capital requirements for trading options, as long as one is familiar with the risks involved.

No thanks, I prefer not making money. Get Free Newsletters Newsletters.


More...

75 76 77 78 79