The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to answer the question – “What is the DJIA?” DJIA is just a short code for Dow Jones Industrial Average and to put it simply, the Dow Jones is basically just the top 30 largest American publicly traded companies. And so, back in 1896 I believe is when Charles Dow created it and he basically just threw together the largest 30 companies and this became what was known as then the Dow or the Dow Jones. And so, the idea is that this is a price weighted index that basically tracks some of the largest corporations and companies in the US and it's a gauge for how the US economy and how the US market is doing. Now, I say it’s a price weighted index because what the Dow Jones does is it price weights all of the movements of the underlying stock based upon its place in the index with regard to stock price. This means that if it's a higher stock price security, then it generally carries a little bit more weight