Is it correct that Dow Future and Dow mini trade on CBOT, or do other US exchanges cover them as well? They all seem to try and compete with each other.
I understand Dow is $10 and Mini $5. What are volumes like?
The futures expire on a quarterly basis, so the further from expiration we are then the bigger the time difference between the futures and the cash index. On a day to day basis, though, they will generally move in line with each other (plus/minus the time premium).
Futures move quicker than the cash index as there is only one market as opposed to 30 which make up the dow index. Automated program trading at the big banks arbitrage the futures and the stocks that make up the index if they move to far apart. This happens very quickly to bring the two back in line. All this does mean that there is little bit more wiggle in futures price than with the cash index, especially at key support and resistance levels.
SB companies base their quotes for the cash market on the futures prices, which is why they tend to wiggle a bit more than the index itself. Some people confuse this with a deliberate attempt by the SB co's to 'bias' their quotes. They don't, it's just the futures market is able to move more quickly than the underlying index.