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FXCM Now Offers Micro CFDs

FXCM Australia, the subsidiary of global Forex broker FXCM, has just announced an exciting addition to the lineup of its trading instruments: micro CFDs. 

 

As you'd perhaps guess, we are not talking about a totally new product for trading but rather a modification of an existing one – the contracts for difference, which as you know, enable traders to profit from movements of prices of a raft of underlying assets. For that matter, a couple of remarks should be made: the first is that you don't actually own the assets in the physical blunt respect, CFDs are types of derivatives; the second is that the variety of CFDs on the menu by FXCM is quite large. OK, one more thing for those who wonder why FXCM Australia is the one responsible for the innovation – it's just that CFD trading is prohibited in the United States. Yep, it's all about regulation these days.

 

But let's get back to the new offering – the change is in the value (cost) of the pip. If the pip cost before the change was $1 for each price tick, then after the change it's at $0.1. Apparently, trading with CFDs is becoming 10 times cheaper. 

 

The move will be of particular help to newbies to CFD trading, who are not willing to risk much and would like to reduce their exposure to the market. 

 

By the way, some of you may see the analogy with micro accounts in Forex trading, when the minimum trade contract size is reduced to 1,000 units, or 0.01 of the standard lot. FXPro is amid the brokers to have launched such accounts for fans of automated trading on MT4. A similar move that aims to reduce risk exposure was undertaken by Australian FX broker ThinkForex which in September started offering Mini Gold and Mini Silver contracts.

 

 

Below you can read the official press release by FXCM. 

 

 

FXCM Launches New Offering Micro CFDs

Trade Global Indices and Commodities at a Reduced Pip Cost

 

SYDNEY--(BUSINESS WIRE)-- FXCM Inc. (NYSE:FXCM), a leading provider of foreign exchange trading and related services, has enhanced its Contracts for Difference ("CFDs") offering by reducing the tradable size to 1/10th its current value. FXCM clients will now be able to trade CFDs in smaller amounts, allowing more available margin, lower transaction costs and greater flexibility in their trading of stock indices and commodities.

 

"FXCM will be working this year to make our CFD offering more unique and competitive and this is one of the first steps," said Drew Niv, CEO of FXCM. "As one of the first brokers to offer micro CFDs, FXCM is bringing greater trading opportunities at a lower cost to traders."

 

How Does It Work?

 

To illustrate how FXCM's Micro CFDs offering will benefit clients, consider the following example.

 

Open a AUS200 position before:

The minimum trade size was 1, equating to a $1 AUD profit/loss for each price tick. FXCM required a $70 margin deposit for each lot traded on an AUD-denominated account. (Margin rates vary for accounts in other currencies.)

 

Open a AU200 position after:

Now, the minimum trade size remains 1. However, because the pip cost is reduced by 1/10th, the profit/loss for each price tick is 0.10 AUD. The required margin is $7 AUD.

 

With FXCM, traders have access to over a dozen stock indices allowing to trade the US, European, Asian, and Australian markets. Furthermore, FXCM offers no re-quotes on all index products - giving traders fast and efficient trade execution, competitive pricing, no commissions, hedging capabilities, and a comprehensive suite of educational services.

 

About FXCM Inc.

 

FXCM Inc. (NYSE:FXCM) is a global online provider of foreign exchange (forex) trading and related services to retail and institutional customers world-wide. At the heart of FXCM's client offering is No Dealing Desk forex trading. Clients benefit from FXCM's large network of forex liquidity providers enabling FXCM to offer competitive spreads on major currency pairs. Clients have the advantage of mobile trading, one-click order execution and trading from real-time charts. FXCM's U.K. subsidiary, Forex Capital Markets Limited, also offers CFD products with no re-quote trading and allows clients to trade oil, gold, silver and stock indices along with forex on one platform. In addition, FXCM offers educational courses on forex trading and provides free news and market research through DailyFX.com. 

 

TAGS: fxcm  fxcm forex broker  fxcm australia  us forex broker  australia forex broker  cfd  cfd broker  contracts for difference  new products  fxcm offering  trading instruments  micro cfd  pip value  pip cost  pip  online trading 
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