About The Dow Jones Industrial Average
The Dow Jones Industrial Average is probably the most recognizable stock market index there is worldwide. It was created by Wall Street Journal editor and Dow Jones & Company co-founder Charles Dow. Dow compiled the index as a way to gauge the performance of the industrial component of Americas stock markets.
It is the oldest continuing U.S. market index, aside from the Dow Jones Transportation Average, which Dow also created.
The DJIA consists of 30 large, frequently traded stocks; this provides an important feature of the Industrial Average: timeliness. At any moment during the trading day, the Dow Jones Industrial Average is based on very recent transactions. This isnt always true with indexes that contain less-frequently traded stocks.
The Dow Jones Industrial Average is a hot favorite for day trading due to its wild intraday swings. Trading the "Mini Dow Jones" or "YM" futures contracts.
Customers will buy or sell "Future" contracts at a price which they expect to go up or down by the time it expires. This enables investors or traders to "sell" a contract in the market to hedge against any stocks they own during times of volatile downward swings.
