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Politics : Idea Of The Day

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To: Lee who wrote (26559)5/26/1999 1:16:00 PM
From: broken_cookie  Read Replies (1) of 50167
 
The DOW divisor was recently re-calculated and reported by Joe Kernan on CNBC on May 24th as 0.2298.



So it's a multiplier of 4.35. Daflye was pretty close. He (She?) was correct with the Dow being price weighted. It is something to beware of if one buys DJX options. The divisor needs to be recalculated each time a stock splits and the implied volatility of the options takes a big hit. Might be able to write options to take advantage of this but I don't know if they are liquid enough.
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