What are futures?

A futures contract is a standardised contractual agreement made between two parties agreeing to buy or sell a commodity or financial instrument at a pre-determined time in the future at a mutually agreed price.

Some futures contracts call for the actual physical delivery of the underlying commodity or financial instrument at contract termination.  Others simply call for a cash settlement at contract termination. 

In most cases delivery of the underlying product or cash settlement never occurs. Generally futures contracts are offset before the contract expires.  That is if you are long you offset it by going short the same number of contracts.

What is the Mini-sized Dow contract?

At Precision Trader we trade the mini-sized Dow because there is online electronic access, lower margins, greater leverage, large intra-day volatility and large liquidity.

Ticker Symbol: YM

Contract Size:  The DJIA multiplied by $5.

Contract months: March, June, September and December.

Settlement Day: is the 3rd Friday of the contract month.  With the last trading day being the Thursday before the settlement day, with trading ceasing at 3:15pm Central time on that Thursday.

Minimum price increment: is one index point (equal to $5 per contract).