There are hardly any people who have not heard the name Dow Jones in various news programs related to economics and finance. However, hearing about something and knowing exactly what it means are completely different things, so let’s look at what the specifics of this stock market index are and how the Dow Jones Industrial Average (DJIA) works.
DJIA encompasses blue-chip stocks of 30 of the largest US companies today. We can safely define them as the “who is who” in the American economy as some of the names are Apple Inc., Microsoft, Nike, and The Coca Cola company. The Dow falls within the category of price-weighted indices and is often considered a barometer for general market conditions in the country.
How Dow Jones Trading Works for Traders and Brokers
Brokerage companies play a key role in Dow Jones trading. Brokers act as sales agents who directly interact with clients and connect buyers and sellers to perform transactions with the index. To use their services you need to pay certain fees or commissions that are a percentage of the value of the brokered deal.
What is specific about indices trading including Dow Jones is that it cannot be done directly but through derivative tools:
- Contracts for difference (CDFs) – agreements for paying the difference between the price of the open and final trades. Profit comes from price movement without traders or investors actually owning any assets.
- Futures – In general, futures contracts are related to assets exchanged at a set price on a set expiration date. However, in the case of Dow Jones, there are no physical assets as the index simply represents a group of stocks.
- Exchange-traded funds (ETFs) – investment instruments that hold the shares of the index constituents. The other option is to trade Dow Jones stocks individually.
The bid-ask spread is the compensation for index market makers taking the risk of holding assets for the time until the deal is completed. It represents the sum by which the maximum price a buyer is ready to pay exceeds the minimum the seller is willing to accept.
Top 10 Dow Jones Trading Brokers
In the dynamic realm of index trading, it is of utmost importance to find a reputable and competent Dow Jones trading broker that will enable you to speculate on floating prices via CFDs, futures, options, spread betting, and ETFs. TradingPedia has picked 10 of the best index brokers today and has reviewed each of them, so keep on reading.
- 1. AvaTradeMin Deposit$100FeesOvernight fees:
CommissionsNoneSpread2.0Leverage EU20:1Leverage non-EU200:1CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
- A daily swap rate of -0.0058%
Established in 2006, AvaTrade has earned a reputation as a trusted online trading broker that offers a diverse selection of trading platforms and particularly rich educational content. The number of indices traded through the brokerage exceeds 30 as their availability depends on the trading platform used. The most popular index types are DJIA, S&P 500, DAX 30, FTSE 100, and others. The minimum deposit of $100 and leverage of 200:1 do not deviate much from what is usual in the industry so you should have no worries before joining AvaTrade.
As stated on AvaTrade’s website, the brokerage firm charges no commission on any trade. Too good to be true? You are right. More in-depth exploration of the Indices Conditions & Charges section shows quite significant additional fees – a $50 inactivity fee after 3 months of no use and a $100 administration fee in case there is no activity for more than 12 months.
AvaTrade aims at facilitating the trading experience of as many traders as possible and that is why it provides its users with several different platforms to respond to their preferences. The well-known MetaTrader 4 and MetaTrader 5 are here but the broker also offers the AvaTradeGO (dedicated mobile app), AvaOptions, and AvaSocial solutions.
- 2. eToroMin Deposit$10 - $10,000FeesOvernight fees:
CommissionsN/ASpread6.0Leverage EU20:1Leverage non-EUN/A76% of retail investor accounts lose money when trading CFDs with this provider.
- Buy - $ -3.89502568
- Sell - $ -1.9883024
eToro is a multi-license experienced broker that provides its users with an easy-to-use platform and an extensive range of services. The company has been constantly expanding its portfolio thus responding to the needs of nowadays traders from all over the world. As regards other regions, the brokerage firm holds several licenses issued by reputable authorities, namely Cyprus Securities & Exchange Commission (CySEC), the Financial Conduct Authority (FCA), and the Australian Securities and Investments Commission (ASIC).
When exploring how this trading broker performs in the different jurisdictions, we found out that it has individual minimum deposit requirements for some of the countries. The respective amount varies between $10 – $10,000.
Currently, eToro enables its users to trade 15 major indices including Dow Jones (US30). If you are not yet confident in your knowledge in the field, you can first go through the detailed DJIA trading guide and then make a registration at the eToro proprietary platform. It has 19 language versions and can be used either on a desktop computer or a mobile device after a free download from Google Play or App Store.
There is no way to introduce you to all the competitive features provided by eToro within this article. However, we just have to mention the CopyTrader functionality which enables inexperienced users to take advantage of the proficiency of top-performing traders. Replicating their trading in your portfolio comes at no extra charge.
- 3. XM GroupMin Deposit$5FeesOvernight rollover:
Trade size X closing price X (+/- short-term interbank rate – the XM mark-up)Commissions
- $0 on Standard and Micro accounts
- $3.5 on Zero accounts
Leverage EU20:1Leverage non-EU200:1CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73.03% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
- 2.5 - US30Cash
- 5.0 - US30
With clients from more than 190 countries and a customer care team speaking over 25 languages, XM is the perfect example of a global group of trading brokers. As such, it holds several licenses issued by different regulatory bodies – Cyprus Securities and Exchange Commission (CySEC), Australian Securities and Investments Commission (ASIC), and International Financial Services Commission (IFSC).
The brokerage boasts of providing financial products, the number of which exceeds 1,000. They can be traded on the MT4 and MT5 platforms both of which have multiple versions adapted for Windows and Mac devices as well as smartphones and tablets with Android and iOS operating systems. A conventional trading website, an in-browser application, dedicated trading apps, it is all there.
Users who want to trade via XM have three account types to choose from, each requiring a minimum deposit of $5. The greatest number of traders opt in for Standard Account that comes with no commission and a minimum trade volume of 0.01 lots (1 lot = 100,000). There are 11 base currency options – USD, EUR, GBP, JPY, CHF, AUD, HUF, PLN, RUB, SGD, and ZAR.
XM Micro Account is a preferred option for newbies who wish to gain some experience before delving deeper into the trading industry. Here 1 lot = 1,000 so that even in case of a wrong move the damage will not be so devastating.
With XM Zero Account traders can benefit from spreads as low as 0 pips but on the other hand will have to pay a $3.5 commission per $100,00 traded. Base currencies are only three – USD, EUR, and JPY.
- 4. PepperstoneMin Deposit$200 (recommended)FeesOvernight fees:
CommissionsFrom 0%Spread2.4Leverage EU20:1Leverage non-EU200:1CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74.4% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
- 2.5% for CDFs
Pepperstone was established back in 2010 and it did not need much time to become a leading trading broker with offices in different parts of the world. Currently, its portfolio comprises 7 markets – Indices, Forex, Cryptocurrencies, Shares, ETFs, Commodities, and Currency Indices. As regards DJIA (US30) and the other indices, Pepperstone allows trading via contracts for difference (CDFs).
The comparison with other trading brokers shows that spreads featured by Pepperstone are competitive. They start at 2.4 and reach 9.8 depending on the particular trading hours. The quoted minimum refers to transactions executed within the 16:30 – 23:00 (GMT +2) time period. A reference to the site shows that the retail leverage is 20:1 while pro margins start at 200:1.
Traders who decide to join Pepperstone’s platform can choose between Standard and Razor accounts. The first is perfectly suitable for new traders as the bid-ask spread includes all trading costs. What is more, the Standard account provides for commission-free trading. On the other hand, the lower-cost setup of Razor accounts is well-perceived by experienced traders who have already built their own style of trading.
Pepperstone’s users can contact a customer care representative by live chat, phone, or email, 24 hours a day, 5 days a week. The fastest communication channel is live chat but keep in mind it is only available to registered traders who have logged in to their accounts.
- 5. FP MarketsMin Deposit$100FeesOvernight interest (daily):
CommissionsNoneSpread2.0Leverage EU20:1Leverage non-EU20:1Trade Responsibly: Derivative products are highly leveraged, carry a high level of risk and are not suitable for all investors.
- Buy - 6.75%
- Sell - 11.76%
Our selection of top Dow Jones trading brokers continues with FP Markets, an award-winning platform that enables CFD trading in indices, shares, commodities, cryptos, and others. In the index section of the firm’s website, there is a table showing minimum and average spreads on all offered indices. Just one click on the relevant symbol opens a new window with extensive data about the selected index including description, history, and some useful educational content.
It seems that FP Markets cater to all kinds of traders since it offers several trading platforms. Those users who open accounts with the broker can choose between MT4, MT5, Iress, WebTrader, and Mobile App. You are probably least familiar with the Iress platform so let’s say a few words about it. Iress supports all types of orders and gives access to more than 10,000 products. It is considered an innovative option since it is equipped with customizable news and trade alerts that may show up directly on the platform or be received by email or SMS.
When checking on the customer support service provided by FP Markets, we were pleased to find that the most convenient and sought-after communication channel is available in more than 40 languages including English, French, German, Italian, Bulgarian, Polish, Spanish, etc. Traders can also reach a representative of the customer care team by email (general inquiries) or phone (within local business hours).
- 6. City IndexMin Deposit$150FeesOvernight financing:
CommissionsNo commission on CFDsSpreadFrom 1.0Leverage EU20:1Leverage non-EU200:1CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
- long positions - equivalent base rate +2.5%
- short positions - equivalent base rate -2.5%
City Index is an experienced trading broker dealing with indices, Forex, shares, gold & silver, commodities, and cryptos. Lots of traders praise the platform for its firmness, rich product range, and speedy trades. However, drawbacks are not completely absent. We would like to see an improvement in the way financial information is presented as currently, it is somewhat unsystematically published with more explanation than concrete numbers. Depending on the particular market you trade, you may be able to work with tight fixed or variable spreads.
The brokerage firm is a proud winner of multiple awards the last of which are Best CFD Provider 2021 and Overall Personal Wealth Provider 2021 (Online Personal Wealth Awards), Best Platform for the Active Trader 2021 (ADVFN International Financial Awards), and Best Professional Trader Service 2020 (London Trader Show).
City Index allows its registered users to trade a selection of major indices including but not limited to Dow Jones, S&P 500, Nasdaq 100, FTSE 100, ASX 200, and DAX. Index trading can be performed both on the WebTrader and MT4 platforms. WebTrader is mostly valued for its Advanced TradingView charting, customizable workspaces, and in-platform price alerts. MT4 comes with 30 standard, more than 2,000 free, and 700 paid-for indicators.
- 7. IC MarketsMin Deposit$200FeesFrom 0%CommissionsNoneSpread0.5Leverage EU20:1Leverage non-EU200:1Trading Derivatives carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Derivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved and seek independent advice if necessary.
IC Markets is a leading brokerage company that boasts of one of the highest order execution speeds on the market. Its portfolio comprises 25 indices including DJIA, S&P 200, FTSE 100, and others. The company’s website has 17 language versions, an indicator of the platform’s global approach. Index trading can be done in the form of CFDs and futures that are offered both on the MetaTrader 4&5 markets and the cTrader platform. These can be accessed via desktop computers as well as mobile devices since the brokerage has an in-browser app and downloadable mobile applications.
Dow Jones traders who join IC Markets will enjoy tight spreads as low as 0.5 pips and a super fast trading environment. Although not particularly low, the $200 minimum deposit requirement provides for the great interest of both newcomers and professionals. For each type of user, there is a suitable type of account that comes with its own specifics. The three main options in this regard are Standard Account, Raw Spread Account, and cTrader Raw Spread Account.
We can talk a lot about the conveniences that the broker strives to provide to its users and the competence of the customer care team but you will soon see for yourself. Rest assured that each of your questions will be answered quickly, and in case of a problem you can even ask for a TeamViewer session.
- 8. IGMin Deposit$300 (card payments)Fees
CommissionsFrom 0%Spread2.4Leverage EU20:1Leverage non-EU200:1Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Options and turbo warrants are complex financial instruments and your capital is at risk. Losses may be extremely rapid.
- Overnight funding admin fees: 2.5 - 3%
- Guaranteed stop premiums: 0.3% of the underlying transaction value
- Borrow fee: Market borrow rate + 0.5% admin charge
IG is a long-term trading broker providing the services of spread betting, CFD trading, and share dealing with its core markets being Indices, Forex, Shares, and Options. The company has been at the forefront of the trading sector since the very beginning of its existence (1974). Nowadays, it has sales offices in the UK, Australia, Switzerland, and other regions where it provides a range of advanced trading platforms. At the ADVFN International Financial Awards 2021, IG won two titles – Best Multi Platform Provider and Best Finance App.
With the development of the mobile trading application, IG is once again showing that, despite its long history, the broker is keeping pace with the latest trends in the financial field. There are dedicated apps both for iOS and Android devices which can be downloaded either from the App Store and Google Play or directly from the company’s website.
Apart from the main trading platform managed by IG and the award-winning app, the trading broker offers its clients a progressive web app (PWA) which allows them to use all the functionalities of the platform without the need of visiting a third-party app store. The other three platforms available for IG users are:
- ProRealTime – a charting software that enables technical analysis and automatic trading.
- MetaTrader4 – a third-party trading platform with 14 years of experience. It offers automatic trading, customizable charts, and trading sizes starting from 0.01 lots.
- 9. CMC MarketsMin Deposit$0FeesOvernight holding cost:
CommissionsNoneSpread2.0Leverage EU20:1Leverage non-EU20:1Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
- Buy - 0.0103%
- Sell - 0.0062%
Whether you are a novice trader interested in index deals or an experienced old hand who seeks exposure to an extensive range of trading instruments, CMC Markets is a brokerage that we advise you not to skip. It offers competitive pricing in CFDs and spread betting and imposes no minimum deposit requirement which makes the broker one of the most user-friendly entities in the industry today.
- Next Generation – multiple charting features, a client Sentiment trading tool, and saving up to five different layouts
- MT4 – an abundance of indicators and signals, micro lots as low as 0.01, full mobile compatibility.
The list of popular indices available in the CMC Markets platform starts with US30 and continues with UK100, Germany40, SPX500, and ASX200 to name just a few. Except for the more than 80 indices, this trading broker enables its users to trade Forex, cryptocurrencies, commodities, shares, share baskets, treasures, and ETFs. Each of these product categories is accompanied by interactive education content that provides for better understanding of the field and therefore improved decision-making.
Unlike many of its competitors, CMC does not distinguish between different types of accounts. It can be said that CFD trading is the prevailing portion of the broker’s operation since spread betting is available to UK-based traders only. Deals can be executed either via the in-house Next Generation trading platform or the industry standard MetaTrader4.
- 10. XTBMin Deposit$0FeesNone for Standard accountsCommissions$0 on Standard accountsSpreadFrom 0.35Leverage EU20:1Leverage non-EU200:1CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
XTB is an European brokerage company with one of the best customer review scores today. A reference with the Trustpilot platform shows the broker enjoys 80% positive rates (60% excellent and 20% great) with most of them mentioning superb customer support and fast order execution. The XTB group has offices in 13 countries including the UK, Poland, France, Germany, and others catering to more than 440,000 clients worldwide.
XTB’s market range comprises Forex and CDFs for indices, commodities, stocks, ETFs, and cryptocurrencies. Dow Jones (US30) bid-ask values presented on the platform are floating and accompanied by the current change percentage. What traders like most is that the Standard Account format has no commissions attached to it and is without any additional trading-related fees.
The trading platform provided by XTB is called xStation 5 and combines user-friendly layout with advanced charting tools. Other accessible treats are a one-click dealing system, trader’s calculator, detailed statistics, and sentiment analysis. xStation 5 is available as a web-trading platform without restrictions on the browser used as well as in the form of a desktop version for Mac and Windows computers, and a dedicated app for both Android and iOS devices.