USDOLLAR: Dow Jones FXCM Dollar Index Basket
A Simple Way To Trade the US Dollar
WHY TRADE USDOLLAR?
The Dow Jones FXCM Dollar Index Basket (USDOLLAR) is a tradable instrument offered by Friedberg Direct‡. It has several advantages for traders:
Simplicity: Do you think the US dollar will rise? It is easy to put that opinion into action. Buy USDOLLAR. Do you think the dollar will fall? Sell USDOLLAR. Simply click Buy or Sell in your Friedberg Direct account.
Low Spreads: USDOLLAR combines four of the lowest-spread currency pairs in forex to make a low-spread, inexpensive, and very liquid trading instrument with no commissions* or expense ratio.
Earn Rollover: Take advantage of higher interest rates outside the USA when selling USDOLLAR. Interest is paid daily.
Geographic Diversification: USDOLLAR was equally weighed at its inception against the Euro, the British Pound, the Japanese Yen, and the Australian Dollar, giving traders exposure to markets in Europe, Asia, and Australia.
Available 24 Hours: The USDOLLAR is available 24 hours a day, five days a week.
|Vital Statistics||US Dollars|
|Target Spread†||2 to 3 pips|
|Margin Requirement**||335 USD & 495 CAD per lot|
|Minimum Trade Size||1 lot|
|Pip cost||1 USD per lot traded|
|Index Average Daily Range||38 pips in 2010|
1 lot is equivalent to 10,000 USD on January 1, 2011. The value of the lot changes as the price of USDOLLAR changes.
†NOTE: Friedberg Direct strives to provide traders with tight, competitive spreads; however, there may be instances when market conditions cause spreads to widen beyond the typical spreads displayed.
*Spreads & Commissions: Dynamic live streaming spread figures shown are from the Best Bid/Best Offer pricing engine. Static historical spread figures are time-weighted averages derived from tradable prices from 1 October 2015 to December 31 2015. Spreads are variable and during normal market hours are subject to delay. We strive to provide traders with tight, competitive spreads; however, there may be instances when market conditions cause spreads to widen well beyond the spreads displayed here.
Advertised spreads & commissions may not apply to all accounts. Some accounts, such as those referred by certain referring agents or those using third party technology, may be subject to a spread markup and/or additional commission. Accounts set to a commission structure will be charged in the currency denomination of the account.
The figures above are provided for information purposes only, and are not intended for trading purposes or advice. We are not liable for any information errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein.
*Compensation: When executing customers' trades, Friedberg Direct powered by FXCM Technology can be compensated in several ways, which include, but are not limited to: charging fixed lot-based commissions at the open and close of a trade, adding a markup to the spreads it receives from its liquidity providers for certain account types, and adding a markup to rollover.
**Trading on margin can both positively and negatively affect your trading experience as both profits and losses can be dramatically amplified.
HOW CAN I TRADE USDOLLAR?‡
Here's how you get started.
‡The USDOLLAR is executed using a Dealing Desk execution model. In a Dealing Desk model, the broker assumes market risk for client positions and does not use straight through order processing. This differs from all other forex products offered by Friedberg Direct, which use the No Dealing Desk Forex Execution model and process orders using straight through processing.
HOW IT WORKS
As of Inception Date 1/1/2011
The Dow Jones FXCM Dollar Index Basket is designed to correspond to the price performance of the US dollar, as represented by the Dow Jones FXCM Dollar Index. It reflects the change in value of the US dollar measured against a basket of the most liquid currencies in the world: the Euro, British pound, the Japanese yen, and the Australian dollar.
The Dow Jones FXCM Dollar Index began on January 1, 2011, at a value of 10,000.00. It represents an equivalent $10,000 position summed from the four currencies that make it up.
The value of the index is the value of the equivalent US Dollar position against these currencies. It rises when the Dollar rises against the Euro, the British Pound, the Japanese Yen, and the Australian Dollar and falls as the Dollar depreciates compared to these currencies. For example, if the US dollar rallies 100 pips against each the EUR, GBP, JPY, and AUD, the index will appreciate by approximately 100 points. It's that simple.
The Dow Jones FXCM Dollar Index Basket, which is shown on Friedberg Direct's trading platforms as USDOLLAR, is composed in the same way. Its tradable quotes are based on the current EUR/USD, USD/JPY, GBP/USD, and AUD/USD rates quoted by Friedberg Direct.