DJIA relationship to DIA etf?

Discussion in 'ETFs' started by cashonly, Apr 15, 2005.

  1. cashonly

    cashonly Bright Trading, LLC

    I was wondering if someone was familiar with the relationship between the DIA and the Dow Index and could explain it.

    For example, right now, the DIA is 101.78 and the DJIA is 10186

    I've been watching it some and the difference between the DIA and the DJIA fluctuates between 1c and 10c.

    I know that there are certain weightings for each stock in the index and am wondering if those weightings are the same for the Diamonds.

    It appears that there is some arbitrage opportunity in this relationship. Is there a way to take advantage of this?

  2. dividends...
  3. I assume you are referring to the intraday variation, nothing to do with dividends.

    Just the ebb and flow of liquidity, Doubt you could make a dime most of the time, and you'd have to hedge with the futures, as the 30 stocks would be too expensive to trade.

    It's harder than it looks.
  4. pjbreen


    Here's the YM_DIA spread. Very efficient. you can trade it but you better be quick and have low transaction costs.
  5. you can trade anything. you wont make any money though.
  6. ============


    I believe the weightings are the same however ;
    watch DIA much more because DIA is plenty liquid. and
    has bid/ask & slipage & volume like any thing actually traded.

    DOW /DJIA however is useful also because its a window into;
    things like 1987, 1920s,1930s or simply evedence of a 77 year plus uptrend.:cool:

    Hope this helps.
  7. Is it possible to trade this spread??

    Is anyone actually spreading DIA finds VS DJ futures??