FXCM expands stock baskets in times of extreme volatility

Rick Steves

FXCM’s Stock Basket products combine the shares of multiple companies from one sector into a single tradeable instrument. This allows customers to speculate on sectors as a whole instead of having to depend on the performance of a single company

The retail broker is doubling down on stock trading at a time of extreme volatility in equity markets, which is a show of confidence in their execution ability. We will see how it works out later on.

FXCM has announced it is expanding its Stock Basket offering after first introducing the concept in May 2020. The move today will add seven new baskets: Big US Tech (“FAANG”), Esports & Gaming, Biotechnology, Cannabis, China Technology and China E-commerce. Stock baskets have proven to be quite popular among retail traders, especially since the government and monetary policy changes in 2020 in an attempt to curb the economic crisis caused by the COVID-19 pandemic.

FXCM’s Stock Basket products combine the shares of multiple companies from one sector into a single tradeable instrument. This allows customers to speculate on sectors as a whole instead of having to depend on the performance of a single company. The expansion is also adding a few new sectors to the portfolio: Airlines, Casinos, Travel & Hospitality, US Automotive, US Banks, US E-commerce, and ‘Work From Home’.

The ‘Work From Home’ sector might be the most interesting among the ones launched. It comes as no surprise that the world economy is being forced to digitize further and faster, which signals an opportunity for all businesses that can thrive under lockdown, such as Zoom Video Communications, Slack Technologies, Twilio, and others. This basket pools these companies and allows for smaller investors to invest in some of these key companies.

“We are always looking to create new opportunities for our customers to capitalize on, and this is continued with these new baskets reflecting some of the industries that have seen the biggest market movement during the pandemic. Their addition to our offering will provide our customers with the ability to speculate on the fluctuation of companies that have dominated the headlines throughout 2020 in a more cost-effective way while minimizing their risk by spreading exposure across multiple stocks in just a single click”, said Brendan Callan, CEO of FXCM said.

In 2020, FXCM launched US, UK, and European Single Shares trading, and the broker plans to add trading on more individual company stocks and new exchanges throughout this year. Stock trading has gained further momentum in 2020 in the context of the pandemic. Volatility has made some cuts and bruises to some of the leading retail brokers in recent weeks, including Robinhood and IG Group.


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