FXCM, a well-known online CFD (contracts-for-difference) and forex (foreign exchange) trading provider, has recently announced a move that will be rather beneficial to its clients. The company decided to expand its product offering, according to its Thursday announcement. This will include adding three new forex baskets, which will be at its retail clients’ disposal.
New forex basket available to retail investors globally
A forex basket is a combination of multiple currencies, all of which start off with the same equivalent value. Traders can choose to sell or buy base currencies against a combination of multiple currencies, as long as they are a part of the basket. The base currency’s performance against others will determine whether the basket’s total value would rise or drop.
As mentioned, FXCM’s new announcement stated that the exchange would bring three different baskets for its retail clients. The first one will be the Dollar Index Basket, the second one The Yen Index Basket, and finally — The Emerging Markets Index Basket. All three can be found to the broker’s retail customers around the world.
The new statement pointed out that the Dollar Index Basket has the USD, which stands against four other major currencies, the Euro (EUR), Australian dollar (AUD), the British pound (GBP), as well as Japan’s yen (JPY).
The Yen Index Basket is similar in some ways, although it does have its differences. It measures JPY’s value against the Canadian dollar (CAD), as well as the AUD, EUR, and GBP.
Finally, there is the Emerging Markets Index, which will use the US dollar (USD) as its base currency, just like the Dollar Index. However, it will pair it against Turkish Lira (TRY), the Chinese Renminbi (CNY), South African Rand (ZAR), as well as the Mexican Peso (MXN).
Benefits of the move
FXCM’s CEO, Brendan Callan, commented on the move by saying that the exchange’s customers tend to trade different currencies simultaneously. This leads to the diversity of their portfolio, reduce risks or hedge existing positions. By introducing entire baskets available for trading of different currencies, the company will offer an efficient way of handling multiple different currencies.
As a result, the traders will benefit, as this method will reduce the risk of exposure, or adverse movement in a single currency. The end result will be greater security, but also lower trade cost.
FXCM also does not plan to stop there, and it will keep expanding its investment offering. The broker appears to be especially interested in delving deeper into the crypto space. Back in May of this year, FXCM even added CFDs on XRP and Bitcoin Cash. With the crypto prices continuing on their way of recovery, the broker appears more than eager to continue working with digital currencies in the future.