Thanks Guys, if can summarise the differences:
Comparison of S&P500 vs Dow30:
- Top 500 companies compared to top 30
- Due to larger number of companies each company has a smaller effect on the number and therefore less “noise” from each company
- Biggest index in the world or at least bigger than Dow
- Higher liquidity in market depth and therefore less prone to manipulation
- Dow weighted equally by company whereas S&P weighted by market cap, therefore there is a skew in the Dow which is not present in the S&P
Since a trader can pretty much trade anything (including futures on two flies crawling up a wall if there were enough people interested :-), I can see that from a trader's perspective the S&P is less prone to unexpected shocks from individual stocks that represent a 1/30 slice of the index, but most importantly its the question of liquidity.
Time for me to start appreciating the S&P rather than the Dow. Cheers & have a good weekend. Sharks.
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