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The Dow Jones Industrial Index futures are future options you can buy on this particular index. Incidentally, the Dow may not be the best representation of the stock market, it is the most widely followed index in the world. An option gives you a right to buy some unit of this index at some future period at a certain strike price. If the price at some agreeable time period falls below the strike price, then the option for this index will expire worthless. If it's in the money (over the agreed upon strike price), then the investor may profit from it subject the cost paid plus commission for the the purchase.
You can see the index futures traded even before the stock market starts to trade daily.
| 14 years ago. Rating: 2 | |
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