The latest period of low-volatility in major global financial instruments has been triggering interest in illiquid and minor financial products, as investors seek new trading opportunities. Subsequently, two forex brokers have expanded recently their product range, in order to cater to growing demands from global traders.
iForex has upgraded its benchmark trading portal, the firm’s ‘FXNet’ platform will now offer 5-decimal pricing, as well as include a range of individual share CFDs for the first time. Five decimal pricing allows traders to speculate on even smaller price change increments and can assist in lowering transaction costs. The five decimal feed is a widespread application across the FX industry, since as early as 2008/09.
In addition, iForex announced CFD trading on individual shares, including Microsoft, Apple and Google. Traders are able to speculate on price movements of these stocks without taking ownership or receiving any dividends. At the time of writing, iForex is offering individual share CFDs with a 5% margin requirement to open a trade.
Precious metals and alternative crosses
easy-forex however has taken an unorthodox route by extending its precious metals range of products. The Cyprus-based firm is now giving access to nine currencies that are traded against gold and silver, including, US dollar, euro, Canadian, Australian, Singaporean and NZ dollar, British pound, Swiss franc, Polish zloty and Japanese yen. The broker is also offering traders the ability to trade vanilla option contracts for precious metals gold and silver.
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The new crosses are expected to invite domestic metals traders to use the CFD for hedging purposes, for example, a domestic gold investor in Durban, South Africa, can cover their exposure with easy-forex’s new offering.
With widespread volatility in the palladium markets driven by the Ukraine-Russia crisis, the firm has also added palladium and platinum markets.
Markos Solomou, Chief Marketing Officer at easy-forex, has told Forex Magnates that the company’s decision to diversify its precious metals offerings has arisen due to customers’ demand. “we are gearing up to launch another 37 precious metal pairs later this year,” he added.
Rahat Mansour, a UK-based silver trader, explained to Forex Magnates: “During times of thin liquidity in the majors we look for trends in alternative crosses, some of the minor pairs have seen stronger gains like the thai, rand and Turkish pairs.”
FX brokers have been spreading their wings as competition increases in the $5 trillion a day FX markets, however, leading CFD providers, City Index, IG and ETX Capital, extended their traditional offerings from equity and index derivatives to FX through the deployment of the popular MT4 trading platform, thus competing in the retail FX MT4 domain.
Although brokers are looking to offer alternative instruments, managing the new products poses new risks and efforts, for example, currency brokers offering equities will need to adhere to EMIR reporting guidelines introduced earlier this year. “Less is more, most of my clients only trade 3 or 4 crosses, an expanded portfolio only confuses them,” added Shiv Kumar, a broker from Dubai.