New Product Introduction: Customized Index Market
Dear Dragons,
We are delighted to introduce a novel trading product to the Arbitrum and HMX community — Customized Index Market (CIM). Index Futures trading is very popular in TradFi as it allows users to trade on a basket of related assets, betting on an overall trend while minimizing idiosyncratic risk. HMX is pioneering index market trading by becoming the inaugural PerpDEX to offer this feature.
Our first CIM, the US Dollar Index Market (DIX), marks the beginning of a series of indexes we plan to launch in the upcoming months. This initiative represents a significant stride towards diversifying trading options and providing our community with innovative opportunities.
About DIX 💸
DIX is a dollar index which is made up of 6 major currencies. It seeks to track how the USD performs against a basket of major currencies.
- If you anticipate a strengthening of the USD against other currencies, you can take a long position in DIX. Conversely, if you expect the USD to depreciate against other currencies, you have the option to short DIX.
- Users will be able to trade DIX with up to 1,000x leverage, similar to other FX markets offered on HMX.
- Similar to standard FX markets, users can trade DIX from 9PM UTC Sunday through 9PM UTC Friday.
Composition and weighting ⚖️
DIX will be comprised of 6 currencies, each assigned a specific weight::
- EUR — 56%
- JPY — 14%
- GBP — 12%
- CAD — 10%
- SEK — 4%
- CHF — 4%
Calculation 📚✖️➕➗🔢
The currencies will be geometrically-weighted and calculated according to the following formula:
Notes:
1.) We use the geometric mean over the conventional arithmetic mean for DIX because we want to measure the relative change in USD against a FIXED percentage of the currency basket (e.g., consistently maintaining 56% for EUR, 14% for JPY, etc.). Using the geometric mean is akin to managing the index’s rebalancing after each change to preserve these percentage weights. Consequently, the geometric mean of price effectively captures the cumulative return in this context.
2.) The coefficient k (47.46426) is chosen so that we compare USD against other currencies relative to their price on 2 January 2023 (first trading day of 2023), when DIX is set to 100.
3.) To maintain price continuity of the index, adjustments to the coefficient will be made in the future in response to changes in weighting, including additions or removals of assets from the index.
Price Source 📈
- The index will be calculated using currencies data from Pyth price feed.
Fees 💵
- Trading fee for DIX will be 0.01% of position size (Open & Close) — aligned with other FX markets
- Max. Long OI: 6 Million USD
- Max. Short OI: 6 Million USD
- Max size / trade: 2 Million USD
Rewards 🎁
- Users will have the opportunity to earn from a weekly rewards pool of over $150,000 USD, by simply trading DIX or other markets on HMX. To learn more, please visit our Docs.
Wen Trade? ⏰
DIX will go live on Thursday 16 November 2023, so all you FX traders can get ready for this new market very soon. We will make an announcement on our social channels when it goes live, so please be sure to follow them.
Website │Docs | Twitter│ Telegram │Telegram Announcement│ Medium│ Discord
