US30: Dow Jones 30

The Dow Jones Industrial Average is thirty large United States companies added up by share price, not by size. It is the oldest of the American benchmarks still in daily use and the narrowest. A company counts for more in it because one of its shares costs more, which is an accident of how many shares it has issued.

General education about the underlying market. It states no current price or rate, makes no forecast and is not advice. What GIO4X offers on this instrument is in the trading conditions on this page, not here.

The index itself

The index is a calculation, published while the New York markets are open. Nobody can buy it. Everything traded “on the Dow” is a product built to follow that calculation.

A fund that tracks it

A tracking fund holds the thirty shares in price-weighted proportions, which in practice means the same number of shares of each. The holder owns units of the fund, receives the dividends the shares pay, and pays the fund’s annual charge. How a fund keeps its price near the value of its holdings is explained on the investing pages.

A futures contract on it

Futures on the index trade on a Chicago exchange for most of the day and night, expire each quarter and are settled in cash. Their price differs from the index by the cost of financing less the dividends expected before expiry. A position kept beyond expiry has to be moved to the next contract.

A CFD on it

A CFD is an agreement with a provider to exchange the change in a price, usually derived from the futures or from the index. The holder owns no shares and no fund units, has no vote, and is exposed to the provider as counterparty. Dividends reach the holder, if at all, as an adjustment under the provider’s terms, and holding overnight usually carries a financing charge or an expiry.

Changes of constituent

There is no timetable. The committee replaces a member when it judges it necessary, typically after a merger, a break-up or a long decline in a company’s standing, and announces the change some days ahead. Because of price-weighting, a change is sometimes prompted by a split in another constituent that has altered the balance of the index.

Dividends

The headline index is a price index: it does not include dividends. On the day a constituent’s shares begin trading without the right to a dividend, its price ordinarily opens lower by about the dividend, and the index falls by that amount divided by the divisor. A separate total-return version is published in which dividends are reinvested.

Futures expiry and rollover

The quarterly futures stop trading on the third Friday of March, June, September and December and settle against a special calculation of that morning’s opening prices. In the days before, most open positions move to the next contract, and the price difference between the two contracts is the cost of carry, not a gain or loss.

Market-wide halts

United States exchanges pause all share trading when the S&P 500 falls by set percentages within a day, at three thresholds. During a halt the index stops updating because its constituents are not trading. Futures have their own price limits outside regular hours.

These describe how such events work in general. How GIO4X treats them on its own contract (adjustments, rollover dates, suspensions) is a trading condition and is not yet published.