Dow Futures

The Dow Futures Index, commonly referred to as Dow futures, represents futures contracts based on the Dow Jones Industrial Average (DJIA). These contracts allow traders and investors to speculate on or hedge against movements in the Dow Index before and after regular US market hours.

Because Dow futures trade almost 24 hours a day, they are widely used as a global market sentiment indicator, influencing markets across Asia, Europe, and emerging economies—including India.

What Are Dow Futures?

Dow futures are derivative contracts that derive their value from the Dow Jones Industrial Average (DJIA), which tracks 30 large US companies.

Instead of buying the underlying stocks in the Dow Index, traders can buy or sell futures contracts to gain exposure to its price movement.

Dow futures are traded on the Chicago Mercantile Exchange (CME) under symbols such as:

• YM – E-mini Dow Futures
• MYM – Micro E-mini Dow Futures

Dow Futures vs Dow Jones Index

It is important to understand the difference:

• Dow Jones Industrial Average (DJIA):
  The spot index representing real-time performance of 30 US stocks during market hours.

• Dow Futures:
  Contracts that reflect expectations of where the Dow Index will be in the future.

Key Differences:

• Dow Index trades during US stock market hours.

• Dow futures trade nearly 24 hours.

• Futures incorporate overnight global news and expectations.

Dow futures often move before the US market opens, giving early clues about market direction.