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Dow Jones Index Hedger

A hedger in the S&P 500 Index market is an individual who uses the futures market to offset price risk when intending to sell or buy the actual S&P 500 Index. Hedging is possible because the S&P 500 Index cash prices and S&P 500 Index futures prices tend to move in the same direction. However, the difference between the cash price and the futures price may narrow or widen. The change in the difference between the cash price and the futures price is called basis risk. Because of the changing basis no hedge can be perfect.

   

Where can you hedge the Dow Jones Index? The Dow Jones Index can be hedged on the Chicago Board of Trade (CBOT). The CBOT offers a competitive and transparent market place to engage in efficient hedging strategies. If you are interested in hedging Dow Jones Index please contact us. One of our experienced Dow Jones Index traders will be happy to give you a call to discuss hedging strategies with you.

Hedge your Portfolio using Stock Index Futures

Click on the link above to download a very informative .pdf brochure entitled "Hedge your Portfolio using Stock Index Futures.” It was published by the Chicago Mercantile Exchange. This is a must read guide for any novice or advanced trader considering a hedge in the index market using exchange traded Dow Jones Industrial Index futures and options.