What is it – How it works?

By Dr. David E. Marcinko MBA CMP®

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If you’ve ever listened to an early morning financial news broadcast, you’ve heard a reference to “futures” and how they affect the stock market before it opens. Physicians Investors follow the futures because it provides an indication of where stocks are headed at the opening bell. One of the most widely followed futures is the Dow Futures, whose underlying value is based on the Dow Jones Industrial Average, an index of 30 major U.S. companies.


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DEFINITION: After the markets close at 4 pm New York time, implied open prices of the Dow Jones Industrial Average, S&P 500 Index, and NASDAQ, which fluctuate from minute to minute, can be calculated.

Considering the DJIA as an example, the basis of calculating implied open is the price of a “DJX index option futures contract “.




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