# What's involved with trading the DOW Jones?



## MalteseBull (15 October 2006)

hi all,

can someone tell me what is necessary to trade stocks on the DOW Jones Index?

I have a Commsec account..

Thanks


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## bunyip (15 October 2006)

MalteseBull said:
			
		

> hi all,
> 
> can someone tell me what is necessary to trade stocks on the DOW Jones Index?
> 
> ...




MB

If you wish to trade stocks direct then I can't help you. But if you're willing to trade CFD's then the CFD brokers like IG, CMC and others can accommodate you.

In spite of some criticism of CFD's on this forum, there are many people who regard them as an excellent trading vehicle, including me.

I guess you're aware that the DOW contains only 30 stocks. I'd suggest you follow the S & P 500....if you're a pattern trader who trades triangles for example, you'll find lots of trades from 500 stocks, but limited opportunities if you're following only 30.

I think you'll find that US stocks have some advantages over ASX stocks....more blue chips to choose from, bigger percentage moves, more liquidity, smoother trends.

Cheers
Bunyip


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## wayneL (15 October 2006)

MalteseBull said:
			
		

> hi all,
> 
> can someone tell me what is necessary to trade stocks on the DOW Jones Index?
> 
> ...




There is the CFD way as per bunyips post. To trade real stocks, you would have to open a US broker account... suggest to look at www.interactivebrokers.com as the funds are held in Sydney in AUS$.

That way you will have access to approximately 10,000 stocks traded on NYSE, NASDAQ and AMEX, plus options on 2000 stocks if you like to trade those.

Brokerage with IB is $0.01 per share OR LESS (depending on the size of the trade).


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## soultrader (15 October 2006)

Have you ever considered trading the Dow Futures instead?


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## nizar (15 October 2006)

soultrader said:
			
		

> Have you ever considered trading the Dow Futures instead?




I have thought about it. But CMC markets, their spreads are ridiculous, what do u use and it is any closer to the REAL price action?

(I am referring to CFD indices here)


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## wayneL (15 October 2006)

The ONLY way to trade indicies (withgout getting raped on the spread) is to trade futures.

Spread is almost always 1 tick during market hours and brokerage is very cheap through IB, Tradestation Securities or similar.


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## soultrader (15 October 2006)

What do you mean the spreads are ridiculous? Im referring to the dow on the cbot... I never had a problem with spreads.


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## lesm (15 October 2006)

soultrader said:
			
		

> What do you mean the spreads are ridiculous? Im referring to the dow on the cbot... I never had a problem with spreads.



Soultrader,

I think you'll find he's referring to the spreads from the CFD provider that he is using.

Cheers.


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## wayneL (15 October 2006)

soultrader said:
			
		

> What do you mean the spreads are ridiculous? Im reffering to the dow on the cbot... I never had a problem with spreads.




Soul,

I imagine you live in the US?

Over here, there is a product called a "Contract for Difference". They trade via a Market Maker company similar to forex (as opposed to currency futures) It tracks the futures, but not necessarily mirrors them due to cost of carry issues etc

They typically charge no commission but have a 5 tick spread on indicies... (it's a rort  )


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## soultrader (15 October 2006)

ah I see.. are there restrictions in trading futs off the cbot or cme in Australia?

Im also located in Tokyo, Japan. (thanks for making the world cup so interesting for us   )


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## wayneL (16 October 2006)

soultrader said:
			
		

> ah I see.. are there restrictions in trading futs off the cbot or cme in Australia?




No restrictions. I trade ES & ER2 plus commods etc from here in Oz, no problem at all.

But there seems to be a reluctance to open futures accounts for some reason.


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## swingstar (16 October 2006)

You may also be able to using optionsxpress.com. I think you can trade US/Aus stocks and options from the one platform/account.


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