Theoretical Dow Jones Index

Theoretical Dow Jones Index

A way to calculate the daily high and low of the Dow Jones indices, assuming that all stocks on an index hit their highs and lows at the same time. That is, one takes the high and low for each stock on each trading day and averages them according to Dow Jones' methodology. This does not present an entirely accurate picture for the index because the daily highs and lows do not actually occur at the same time. The Dow Jones indices stopped using this method in 1992 when it began calculating the average every 10 seconds on a rolling basis.