JXY vs. FXCM JPYBASKET: wut?

Trading Discussion Currencies
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Hi good folks!

Attached is a screenshot of the tradeable JPY index product offered by FXCM (“JPYBASKET”) with the TVC JPY index superimposed. As a novice, I’m trying to understand the difference in the performance between the two assets.

Is it correct that because the forex market is decentralized, it’s natural for the value of two indexes (or pairs) to perform very differently on different exchanges? Because each exchange is a market in its own right? And that for this reason and in this case, one can’t look to the JXY as an indicator of what the JPYBASKET may do, or vice-versa? If so, that makes perfect sense to me.

But what doesn’t make sense to me is why they’d be similar at all?

Many thanks in advance for your kind insight!

JPYBASKET_2023-06-16_07-54-47
JPYBASKET_2023-06-16_07-54-472349×1700 188 KB

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The performance of an index is driven by the perfomance of its constituent members. This can be direct or it can be moderated, by giving some members greater weight in calculating the index value.

So two indices could easily have different pairs as members, and different total numbers of members and could also give each member a different weighting from each other.

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Many thanks for chiming in! Very grateful! Even if the baskets might be the same between certain indexes, there’s that weight to consider! Wow… I feel quite ashamed by missing the obvious; but that’s a novice for you :woozy_face:

Very kind of you to take the time to instruct novices such as myself… many, many thanks!

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