Perhaps the most widely traded markets in the world, the Dow Jones 30 and the S&P500; are often used as determiners of the overall health of the US economy. For spread bettors, both these markets present unique opportunities, and hold advantages in their own right over other global stock and derivative markets. But what exactly is it about the Dow Jones and the S&P500; that make them particularly appealing to spread bettors?
The Dow Jones
The Dow Jones index comprises an average of the 30 largest US companies by market cap, allowing traders to bet on the movements of price across some of the biggest names in global commerce. The key advantage of trading the Dow Jones is its perceived transparency in responding to US-specific economic indicators.
As a representation of industrial response to key trading signals, the Dow Jones is a favourite amongst spread bettors looking to capitalise on market trends and hone their trading skills. With conventional trading wisdom requiring traders to learn one or two markets at first to build experience and hopefully generate trading profits in the short term, the Dow Jones is one of the foremost indices for spread betting, allowing traders a comparatively transparent market for analysis and study as they learn the ropes.
Even for more experienced traders, the price volatility of the Dow Jones index, and its reaction to trading across the other developed markets make it an index with potentially low hanging fruit, where the shrewd trader can make gains as a result of trading upwards and downwards price trends.