I also want to know why there are so few DOW futures traders. Why people devoted to SP instead of DOW? Does DOW have any features that deter people?
The question is why is DOW so illiquid. Why SP is so liquid? It is liquid so many people play it and it becomes even more liquid. Why DOW cannot become more liquid?
Its simply a question of who came first. The SP500 futures contract was introduced in the early 80's and it was a landmark product for the CME and the financial community in general. It has traded quadrazillions of dollars over the course of its life. The DJ contract was created by CBOT much later than SP. ES was introduced in 1998 by CME. Its volume has grown dramatically since then. ZD electronic DJ was introduced by CBOT much later than ES. ZD was a full size version of the pit traded DJ ($10/point). ZD was recently dropped by CBOT in favor of the new $2 and $5 contracts. Long story short: CME came to market with good products. CBOT stumbled along later and continues to play catch-up. Liquidity begets liquidity. Plus, the DJIA is primarily important to the public. SP500 is really the measure of the market.
Yes I am currently trying my hand at the DOW futures...their liquidity is a problem...or opportunity.... Anyway... what's up with that rebate from IB??? Also, can anyone explain the reason that DIA the DOW tracking stock trades so far above the index price? (15-25pts)
The Dow and S&P are highly correlated. If one is the illiquid market and the other is the best market in the world, which one would you trade? There are many futures markets that don't trade at all (shrimp, semiconductors etc...). Its a chicken and egg thing. Bad markets stay bad and then get delisted.