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The YM is a index future whose price is totally calculated by supply and demand, the buying and selling of futures. |
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Yes, and no.
Because the YM (and DJ and DD) futures are cash-settled at the contract expiration based on the value of the actual DJIA index, it manages to keep in lock step with the Dow.
More info here:
http://www.cbot.com/cbot/pub/cont_de...6+8709,00.html
There was a legal battle many years ago when the CBOT wanted to use the Dow index as a basis for a futures contract, but the Dow Jones Co. would not give its consent. So another index was developed that was said to mirror the movements of the Dow - since the CBOT could not use the actual Dow at that time as a benchmark. It was known as the MMI - Major Market Index, and based upon 20 of the 30 stocks in the Dow index.
In 1997, Dow Jones and CBOT agreed to issue a futures contract based upon the DJIA - this replaced the MMI futures contract.
