Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

AbeSmith

How is YM calculated?

Recommended Posts

Hello folks. Sorry if this is a stupid question, but I've been wondering, how is YM calculated? I know it represents the Dow, but I don't know the details and can't seem to find it anywhere. I guess I'm wondering, how is it calculated? What are the factors that make it move one way or another?

Share this post


Link to post
Share on other sites

Abe

 

It's based on the 30 stocks in the Dow Jones Industrial Average. Each stock has a different weight percentage. eg. IBM has the biggest weight at 6.78% of the index and Intel the least at 1.44%.

 

Here's a link to show you the 30 stocks and their corresponding weight.

 

http://www.indexarb.com/indexComponentWtsDJ.html

 

 

Hope this helps

 

 

Blu-Ray

Share this post


Link to post
Share on other sites
Abe

 

It's based on the 30 stocks in the Dow Jones Industrial Average. Each stock has a different weight percentage. eg. IBM has the biggest weight at 6.78% of the index and Intel the least at 1.44%.

 

Here's a link to show you the 30 stocks and their corresponding weight.

 

http://www.indexarb.com/indexComponentWtsDJ.html

 

 

Hope this helps

 

 

Blu-Ray

 

Thanks Blu-Ray. That helps plenty.

Share this post


Link to post
Share on other sites
What are the factors that make it move one way or another?

 

Buyers and sellers move it. ;)

 

I know it sounds too simple Abe, but when they are more buyers than sellers, price goes up and vice versa. That's about as simple as it can get when trying to figure out what moves any market.

Share this post


Link to post
Share on other sites

The Dow Jones Industrial Average is a price weighted stock index which is calculated by special formula based on the stock prices of what are considered the thirty most important companies in the US. These stocks change from time to time. In fact, only GE is left from the original DJIA.

 

The YM is a index future whose price is totally calculated by supply and demand, the buying and selling of futures. It takes its cues from the DJIA. But the DJIA also takes its cues from the futures markets. So it hard to say which comes first, the chicken or the egg. When the stock market and the futures get out of sync, arbitragers step in a buy (sell) one and sell (buy) the other. It's an amazing process but somehow works out.

 

Think of the market as sort of the Wikipedia of price. Everyone contributes and somehow we end up with something more or less representative of value, at least over the long run.

Share this post


Link to post
Share on other sites
The Dow Jones Industrial Average is a price weighted stock index which is calculated by special formula based on the stock prices of what are considered the thirty most important companies in the US. These stocks change from time to time. In fact, only GE is left from the original DJIA.

 

The YM is a index future whose price is totally calculated by supply and demand, the buying and selling of futures. It takes its cues from the DJIA. But the DJIA also takes its cues from the futures markets. So it hard to say which comes first, the chicken or the egg. When the stock market and the futures get out of sync, arbitragers step in a buy (sell) one and sell (buy) the other. It's an amazing process but somehow works out.

 

Think of the market as sort of the Wikipedia of price. Everyone contributes and somehow we end up with something more or less representative of value, at least over the long run.

 

So, let me see if I'm understanding this, the YM moves based on people buying and selling the YM. But when the YM doesn't go in tune with the Dow, then arbitragers step in and buy or sell to keep the YM in line with the Dow.

Share this post


Link to post
Share on other sites
Buyers and sellers move it. ;)

 

I know it sounds too simple Abe, but when they are more buyers than sellers, price goes up and vice versa. That's about as simple as it can get when trying to figure out what moves any market.

 

Things sound very simple when you're making money I guess. :cry:

Share this post


Link to post
Share on other sites
Guest cooter

The YM is a index future whose price is totally calculated by supply and demand, the buying and selling of futures.

 

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_detail/1,3206,1556+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.

 

 

johngalt.jpg

Share this post


Link to post
Share on other sites

I think it's a bit more complex than some people here are trying to present. There is a fair value for YM based on not only the DJIA but also dividends and interest. That's why the further from expiry, the bigger the gap between YM and DJIA. Once the future has expired it settles at the DJIA cash price. YM never diverges far from fair value because arbitrageurs step in and move it back to fair value.

Share this post


Link to post
Share on other sites
Guest cooter

We know where your stops are resting too, Nick!!!

 

:lol:

 

Actually I put it on there just to keep people HONEST and remind them that they are not as anonymous as they think they are, or as they would like to be, when on the Internet.

Share this post


Link to post
Share on other sites

omg noooo my stops! lol

 

Thats it I'm using a phone broker now! hehe.

 

Thats very true Cooter. Despite all the most fancy firewalls we can still be tracked! :o I should go delete my history before my missus finds me! jk heheh

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • Date: 11th July 2025.   Demand For Gold Rises As Trump Announces Tariffs!   Gold prices rose significantly throughout the week as investors took advantage of the 2.50% lower entry level. Investors also return to the safe-haven asset as the US trade policy continues to escalate. As a result, investors are taking a more dovish tone. The ‘risk-off’ appetite is also something which can be seen within the stock market. The NASDAQ on Thursday took a 0.90% dive within only 30 minutes.   Trade Tensions Escalate President Trump has been teasing with new tariffs throughout the week. However, the tariffs were confirmed on Thursday. A 35% tariff on Canadian imports starting August 1st, along with 50% tariffs on copper and goods from Brazil. Some experts are advising that Brazil has been specifically targeted due to its association with the BRICS.   However, the President has not directly associated the tariffs with BRICS yet. According to President Trump, Brazil is targeting US technology companies and carrying out a ‘witch hunt’against former Brazilian President Jair Bolsonaro, a close ally who is currently facing prosecution for allegedly attempting to overturn the 2022 Brazilian election.   Although Brazil is one of the largest and fastest-growing economies in the Americas, it is not the main concern for investors. Investors are more concerned about Tariffs on Canada. The White House said it will impose a 35% tariff on Canadian imports, effective August 1st, raised from the earlier 25% rate. This covers most goods, with exceptions under USMCA and exemptions for Canadian companies producing within the US.   It is also vital for investors to note that Canada is among the US;’s top 3 trading partners. The increase was justified by Trump citing issues like the trade deficit, Canada’s handling of fentanyl trafficking, and perceived unfair trade practices.   The President is also threatening new measures against the EU. These moves caused US and European stock futures to fall nearly 1%, while the Dollar rose and commodity prices saw small gains. However, the main benefactor was Silver and Gold, which are the two best-performing metals of the day.   How Will The Fed Impact Gold? The FOMC indicated that the number of members warming up to the idea of interest rate cuts is increasing. If the Fed takes a dovish tone, the price of Gold may further rise. In the meantime, the President pushing for a 3% rate cut sparked talk of a more dovish Fed nominee next year and raised worries about future inflation.   Meanwhile, jobless claims dropped for the fourth straight week, coming in better than expected and supporting the view that the labour market remains strong after last week’s solid payroll report. Markets still expect two rate cuts this year, but rate futures show most investors see no change at the next Fed meeting. Gold is expected to finish the week mostly flat.       Gold 15-Minute Chart     If the price of Gold increases above $3,337.50, buy signals are likely to materialise again. However, the price is currently retracing, meaning traders are likely to wait for regained momentum before entering further buy trades. According to HSBC, they expect an average price of $3,215 in 2025 (up from $3,015) and $3,125 in 2026, with projections showing a volatile range between $3,100 and $3,600   Key Takeaway Points: Gold Rises on Safe-Haven Demand. Gold gained as investors reacted to rising trade tensions and market volatility. Canada Tariffs Spark Concern. A 35% tariff on Canadian imports drew attention due to Canada’s key trade role. Fed Dovish Shift Supports Gold. Growing expectations of rate cuts and Trump’s push for a 3% cut boosted the gold outlook. Gold Eyes Breakout Above $3,337.5. Price is consolidating; a move above $3,337.50 could trigger new buy signals. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news.   Michalis Efthymiou HFMarkets   Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • Back in the early 2000s, Netflix mailed DVDs to subscribers.   It wasn’t sexy—but it was smart. No late fees. No driving to Blockbuster.   People subscribed because they were lazy. Investors bought the stock because they realized everyone else is lazy too.   Those who saw the future in that red envelope? They could’ve caught a 10,000%+ move.   Another story…   Back in the mid-2000s, Amazon launched Prime.   It wasn’t flashy—but it was fast.   Free two-day shipping. No minimums. No hassle.   People subscribed because they were impatient. Investors bought the stock because they realized everyone hates waiting.   Those who saw the future in that speedy little yellow button? They could’ve caught another 10,000%+ move.   Finally…   Back in 2011, Bitcoin was trading under $10.   It wasn’t regulated—but it worked.   No bank. No middleman. Just wallet to wallet.   People used it to send money. Investors bought it because they saw the potential.   Those who saw something glimmering in that strange orange coin? They could’ve caught a 100,000%+ move.   The people who made those calls weren’t fortune tellers. They just noticed something simple before others did.   A better way. A quiet shift. A small edge. An asymmetric bet.   The red envelope fixed late fees. The yellow button fixed waiting. The orange coin gave billions a choice.   Of course, these types of gains are rare. And they happen only once in a blue moon. That’s exactly why it’s important to notice when the conditions start to look familiar.   Not after the move. Not once it's on CNBC. But in the quiet build-up— before the surface breaks.   Enter the Blue Button Please read more here: https://altucherconfidential.com/posts/netflix-amazon-bitcoin-blue  Profits from free accurate cryptos signals: https://www.predictmag.com/ 
    • What These Attacks Look Like There are several ways you could get hacked. And the threats compound by the day.   Here’s a quick rundown:   Phishing: Fake emails from your “bank.” Click the link, give your password—game over.   Ransomware: Malware that locks your files and demands crypto. Pay up, or it’s gone.   DDoS: Overwhelm a website with traffic until it crashes. Like 10,000 bots blocking the door. Often used by nations.   Man-in-the-Middle: Hackers intercept your messages on public WiFi and read or change them.   Social Engineering: Hackers pose as IT or drop infected USB drives labeled “Payroll.”   You don’t need to be “important” to be a target.   You just need to be online.   What You Can Do (Without Buying a Bunker) You don’t have to be tech-savvy.   You just need to stop being low-hanging fruit.   Here’s how:   Use a YubiKey (physical passkey device) or Authenticator app – Ditch text message 2FA. SIM swaps are real. Hackers often have people on the inside at telecom companies.   Use a password manager (with Yubikey) – One unique password per account. Stop using your dog’s name.   Update your devices – Those annoying updates patch real security holes. Use them.   Back up your files – If ransomware hits, you don’t want your important documents held hostage.   Avoid public WiFi for sensitive stuff – Or use a VPN.   Think before you click – Emails that feel “urgent” are often fake. Go to the websites manually for confirmation.   Consider Starlink in case the internet goes down – I think it’s time for me to make the leap. Don’t Panic. Prepare. (Then Invest.)   I spent an hour in that basement bar reading about cyberattacks—and watching real-world systems fall apart like dominos.   The internet going down used to be an inconvenience. Now, it’s a warning.   Cyberwar isn’t coming. It’s here.   And the next time your internet goes out, it might not just be your router.   Don’t panic. Prepare.   And maybe keep a backup plan in your back pocket. Like a local basement bar with good bourbon—and working WiFi.   As usual, we’re on the lookout for more opportunities in cybersecurity. Stay tuned.   Author: Chris Campbell (AltucherConfidential) Profits from free accurate cryptos signals: https://www.predictmag.com/   
    • DUMBSHELL:  re the automation of corruption ---  200,000 "Science Papers" in academic journal database PubMed may have been AI-generated with errors, hallucinations and false sourcing 
    • Does any crypto exchanges get banned in your country? How's about other as Bybit, Kraken, MEXC, OKX?
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.