CBOT Launches New $25 "BIG" Dow Product

Discussion in 'Index Futures' started by Ripley, Feb 13, 2006.

  1. A "BIG" e-mini index futures product from CBOT to compete with ES e-mini. This is going to be exciting.

    CBOT Launches New $25 "BIG" Dow Product
    Jennifer Rook



    CHICAGO, February 13, 2006 – The Chicago Board of Trade (CBOT®) announced today it will list a new DowSM $25 futures product to be known as the “BIG” Dow contract. The contract is expected to launch on March 20, 2006 and will expand the CBOT’s Dow Jones Industrial Average (DJIASM) futures complex to meet the demand for a larger sized, electronically traded product.

    CBOT Senior Vice President of Business Development Robert D. Ray said, “Our new BIG Dow product will facilitate additional trading opportunities as the result of the fungibility within the CBOT’s DJIA futures complex, as well as with other broad-based equity index futures contracts that have a significantly high correlation to the DJIA. In addition, offering a BIG Dow contract with a $25 multipler is very attractive to a broad spectrum of market participants. The CBOT BIG Dow contract will represent, in terms of notional value, the single largest equity index futures contract traded exclusively on an electronic platform.”

    Dow Jones Indexes/Ventures President Michael A. Petronella said, “We are convinced that the new $25 Dow product developed by the CBOT will further strengthen the usefulness to investors of the Dow Jones Industrial Average futures complex. The extension of the Dow products at the CBOT demonstrates continued strong interest in this premier index and the CBOT’s leadership in serving that interest.”

    The CBOT will determine the daily settlement prices of the CBOT Dow futures contract based upon a settlement calculated for the electronically-traded, mini-sized Dow futures contract. The new BIG Dow futures contract will be cash settled on the final settlement day, which will be the third Friday of each contract month.

    The CBOT is also creating a market maker program for the BIG Dow futures contract to ensure a tight two-sided market to take place during core U.S. equity market trading hours (6:15 p.m. – 4:00 p.m. CST, Sunday – Friday). The CBOT is currently in negotiations with several liquidity providers.

    The CBOT DJIA futures complex, which includes the CBOT mini-sized Dow ($5), the CBOT Dow ($10) and CBOT BIG Dow ($25) futures contracts are based on the Dow Jones Industrial AverageSM – one of the world's most readily recognized and followed stock indexes. These products provide large and small investors a way to take a position based on the performance of the DJIASM, to diversify and protect their portfolios against potential adverse price changes in the stock market, and to preserve investment value.
  2. SM is going to be a hit. Think of each point with $25, and 100 pt moves a day.. $2,500 per contract compared to $500 with YM..

    More bang for the buck.

    Its almosts DAXesque with the liquidity of ES, only that its domestic.
  3. pretty big news

  4. if the dow ever moved an inch it would be:D
  5. I don't know.. Dow is as volatile as any product out there.
  6. I'd rather trade the nikkei; same tick value but better exposure and more trendy.
    with $5 a tick or $25 dow is still sissy.
    fcuk it, better deals out there.
  7. The dow at $25 a dow point is very interesting to say the least. I am a die-hard ES fan but am not dyed in the wool. The volume will need to be healthy enough to keep slippage to a minimum, the ES at 10 cars a pop always has been a one tick difference, that natch is during the hours from the pit opening to 1600 et. Good news.

    gonna check further...
  8. Wait, wouldn't brokers take advantage of this by charging more per contract negating the the commision advantage versus the mini dow?
  9. jpatet


    I too may well move from ES to the Big Dow. But I may move back to the CME if they "e" the big S&P 500 contract while keeping the tick size at 0.1.
  10. jpatet, you could be on to something there about the big SP, gee while we are at it lets go back to 500 a pop.

    The saving in commission with the BIG Dow would be good in itself, not to mention the increased $amount if nothing else changed.

    Sammybea, NO brokers would not charge more commission. you do not see the point in the creation of the new product. The way these mkts work is INCREASED volume NOT increased commissions. Brokers are not stupid.
    #10     Feb 13, 2006