Online trading provider FXCM Group, LLC, announced this Tuesday that it has added a new index contracts for difference (CFD) to its range of trading instruments – Volatility Index CFDs.
The Volatility Index CFD has the CBOE Mini VIX™ Future as the underlying asset. As Finance Magnates reported, CBOE launched the mini future on the 10th of August 2020, building Cboe’s launch of VIX futures, which is the most actively traded, exchange-listed volatility futures contract in the world.
According to the statement from the foreign exchange (forex) and CFD broker, FXCM, the Volatility Index CFD allows clients to profit directly from market movements, instead of changes in stock prices.
FXCM capitalises on market volatility
Commenting on the new product, Brendan Callan, CEO of FXCM said in the statement: “2020 has been a big year for volatility and we are continuing to maximise trading opportunities for clients wanting to make the most of this market turbulence.
“With a CFD based on the VIX™, volatility is now the tradable instrument and our customers can speculate on the extreme movements that have dominated the markets this year. By significantly reducing the allowable trading size, we are making this instrument accessible to all types of traders.”
With the ticker symbol VOLX, the product uses the price of options on the S&P 500 and estimates how volatile those options will be between the current date and the option’s expiration date.
The new Index CFD expires monthly and can be purchased micronized VOLX CFDs at 1/10th of the size of the mini VIX™ or 1/100th of the standard VIX™ Future.
FXCM is not the only trading provider to launch an investment product based on CBOE’s VIX Future. In July, Invast Global announced that it had launched a new Index CFD product based on the VIX futures contract offered by Cboe Futures Exchange.
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