The Dow Jones Industrial Average (DJIA) was created in 1896 making it the second largest index in the U.S. The DJIA comprises of the 30 largest companies in the U.S. in terms of market capitalization. The companies are categorized into the technology, industrials, financials, oil and gas, healthcare, consumer services, telecommunication, consumer goods, and basic materials sectors.
Dow Jones Index Binary Options Trading
Given that there are just 30 companies on the Dow index, slight changes in the stock price of any of the component companies can impact the index significantly. The component companies on the Dow Jones as of June 4, 2015 include:
• Procter & Gamble
• Chevron Corp
• Wal-Mart Stores
• Coca-Cola Co.
• Intel Corp
• Johnson & Johnson
• Travelers Co.
• Home Depot
• General Electric
• Boeing Co.
• United Technologies
• American Express
• Goldman Sachs
• Nike Inc.
• The Walt Disney Company
• UnitedHealth Group
• Cisco Systems
• IBM Corp
• Exxon Mobil
• JP Morgan Chase
• Caterpillar Inc.
Why trade the Dow Jones Industrial AverageAlthough the Dow Jones is one of the oldest stock market indexes, it continues to be relevant today. The component companies on the index are some of the best performing in the world and have very strong financial standing. This has allowed the DJIA to perform relatively well compared to other indexes. In spite of volatile market conditions domestically and abroad, the Dow Jones components especially those in the consumer goods and services and in the financials category continue to see a gain in their stock prices.
|BINARY OPTIONS BROKERS COMPARISON|
Type of available binary options for Dow Jones Industrial AverageThe common binary options contract types for Dow Jones Industrial Average are:
• Basic Call/Put options: You need to predict whether the price of DJIA will move up or down prior to the expiry time.
• Touch options: You are required to predict whether the price of DJIA will touch the given strike price prior to the expiry.
• In/Out: You need to predict if the price of DJIA will remain within a range of two strike prices.
Possible signals for Dow Jones Industrial AverageThe DJIA increased by 150.37 points or an equivalent of 0.83% to stabilize at 18,162. This is compared to the NASDAQ composite which gained just 36.69 points or an equivalent of 0.72% to rise to 5,113.54 while the S&P 500 rose 11.17 point or an equivalent of 0.53% to 2,122. The biggest winners on the DJIA are Home Depot, which rose 1.4%, and Intel Corporation, which rose 1.6%. DuPont and other eight components remained the same. Following announcements that the performance of the U.S. economy declined in the first quarter of 2015 due to a decline in shipping caused by disputes at the ports in the West Coast, U.S. stocks traded lower while the DJIA fell by over 150 points.
Factors Influencing Price of Dow Jones Industrial Average
• Volatility in the global economy - Greece’s debt situation is a major source of volatility in the global market and this is having an impact on stock prices in general as markets respond to the impending risk of a Greek default on its debts.
• Performance of the U.S. economy - A weak economy has negative outcomes for U.S. stock and thus for the DJIA index.
• Economic data -For example employment rates, interests rates as set by the Central Bank
• Trends in consumer prices