Archive for August, 2010
How can the DJIA and DIA both outperform the DDM on a huge dow jones upside day?
Question by mbhoran: How can the DJIA and DIA both outperform the DDM on a huge dow jones upside day?
The DDM is supposed to be twice the return of the dow 30, the DIA is supposed to reflect the dow 30, and the DJIA is the dow 30. At 11:00 on 10/13, DIA was up 6% and the DJIA and DDM were both around 5%, why is the DDM not 10%?
Best answer:
Answer by Ted
The GOAL of the fund is to double the Dow performance. There is no guarantee that this will happen.
The net asset value of the fund’s assets are calculated at the end of the day, not at 11AM. During the day, the DDM shares trade on the market according to the rules of supply and demand, just like any other shares. If there isn’t a lot of interest in buying them, they won’t go up much.
The fund doesn’t just buy Dow stocks. If it did, it would perform like DIA. It uses leverage and takes positions in the futures market and enters into swap contracts. There is no guarantee that the value of futures or the swaps will move exactly with the Dow in the short term.
Bottom line: this is a tool to capture and magnify moves in the DJIA that last from several days to several weeks, and even longer. It shouldn’t be used for day-to-day moves and probably useless when tracking moves of less than one day.
What do you think? Answer below!
What market is reflected in volume of Dow Jones Industrial Average?
Question by eichilles: What market is reflected in volume of Dow Jones Industrial Average?
Some stock is traded in a few markets or internationally (for instance Cisco – Nasdaq, Frankfurt, XETRA …) Volume mentioned next to price change is sum of what market please? And by volume we mean number of stock traded or it is sum of money like somewhere in Europe?
Thank you
Best answer:
Answer by Steve D
The Dow Industrials cover 30 companies as traded on the New York Stock Exchange – the volume is the number of shares traded on the NYSE for those companies.
What do you think? Answer below!
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Realms Of Joy – Time Of Light.
How You Can Grasp Holographic Time To Achieve Excessive Prosperity And Peace.
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