What are FX Derivatives?

Forex Derivatives (FXD), a type of derivative contract, is one of the simplest way to trade on price fluctuations in multiple global markets. Traders only need to understand two potential outcomes of a derivative: Will it go up or down in value?

Ranging from currencies, commodities to indices and stocks, traders are not required to predict the movement size of their instrument of choice. The main emphasis lies within the price direction of an underlying asset. The fixed payoff is primarily structured at the point of expiration, in accordance to whether the contract expires in favour or against the trader’s predictions.

Due to its straightforward, no-frills approach and low barriers to entry, FXD has gained immense traction against retail traders over recent years, drawn to its trading simplicity and ease of execution.

Why Trade FXD?

FXD is a popular trading method suitable for novice and experienced traders alike. It is often seen as a quick and efficient way to make fast financial gains. In addition, traders do not need to be deep-pocketed and are able to get into FXD trading with very small investments.

Traders engage in FXD trading because of:

  • Simplicity – It is bi-directional; traders only have to predict if it will rise or fall.
  • Quick returns on their investments – Expiry times can be as short as 60 seconds in FXD.
  • Known risk/rewards – Straightforward payouts make it easy to calculate profit and loss before committing.
  • High profits, minimal investment – Earnings can be as high as 80%.
  • Tailored to suit all asset preferences – Traders can choose from a wide range of assets according to preference.