Last week FXTM, one of Daily Forex’s top-rated retail Forex / CFD brokers, announced they would be making 6 new currency indices available to their clients for trading. This offers a unique opportunity to trade in a “basket” style which is not available at most brokers. It is available through FXTM’s ECN MT4 account.
Simultaneously, FXTM also announced that they have created 5 new innovative stock indices, and that they will be offering potentially spread-free trading through their ECN account, with commissions as low as 20 cents per lot.
Asked for comment, Exinity Group’s Chief Dealer Charis Mountis said: “In 2020, the heightened volatility in financial markets have brought renewed interest in the retail trading space. To help our clients seize even more trading opportunities, our trading team has devised these creative currency and stock indices, combined with zero spreads on major FX pairs — enabling clients to make the most of out every trade with us”.
New Currency Indices
The new currency indices which are being offered by FXTM are:
While a few Forex brokers already offer trading in the U.S. Dollar Index (often known as USDX), few offer indices in the other major currencies which comprise the vast majority of trading in the Forex markets.
The availability of these indices means that traders will be able to profit from the fortunes of a single currency against the market as a whole, rather than being forced to pick another currency to pair it against – one of the major drawbacks, until now, in the framework of retail Forex trading.
Although it is unclear whether the currency indices are equally or differentially weighted, FXTM have specified which currencies are included as counterparties within each basket. For example, the EUR index will represent the price fluctuation of the Euro against a basket comprising the U.S. Dollar, Swiss Franc, British Pound, New Zealand Dollar, and Canadian Dollar. At least from these details, it is clear that these indices are not strictly trade-weighted but are probably diverse enough to be representative of the broader Forex market movement of the currency represented.
New “Theme and Industry” Stock Baskets
In addition to the aforementioned currency indices, FXTM have built their own new stock indices representing the following groups:
- Social Media Index – includes Facebook, Twitter, Snapchat, and Google
- Green Index – includes Tesla and Beyond Meat
- Vegan Index – includes Beyond Meat and Archer-Daniels
- Mobile Index – includes Apple and Verizon
- Space Wars Index – includes Boeing and Lockheed Martin
The new currency indices will provide a relatively cheap way to trade Forex in a “basket” style. Traders looking to implement this less risky trading method should look into FXTM’s offering to determine whether it is the most cost-effective available solution.