Deriv Synthetic Indices are the most popularly traded assets in Africa. This is despite them being relatively new instruments and being offered by only one broker in the financial market.
Deriv Synthetic indices have been traded for over 10 years with a proven track record for reliability and continue to grow in popularity. Here we will let you know all about the synthetic indices so you can see why they are popular.
We will also show you how you can get started with trading these various synthetic indices.
Synthetic Indices are a family of trading instruments that emulate or copy the behaviour of the real-world financial markets but they are not affected by world events or news. Synthetic indices are available 24/7, have constant volatility, fixed generation intervals, and are free of market and liquidity risks.
In other words, Deriv synthetic indices move like real-world markets but their movement is not caused by an underlying asset.
Stock markets, for example, move in response to the price movement of the stock. The same happens in forex markets where the forex chart moves up and down in response to the price of the forex pair.
There is only one broker that offers synthetic indices trading in the world. That broker is Deriv. The broker, which recently rebranded from Binary.com, has been in existence since 2000. Deriv also offers crypto, forex & stock trading and is the preferred choice of over 2 million traders worldwide.
In Africa, Deriv is the most popular broker and there are some traders that only trade these volatility indices exclusively. In countries like Nigeria, South Africa, Zimbabwe, Kenya, Tanzania, Botswana and Mozambique,
Deriv has seen incredible growth due to traders wanting to try out these synthetic indices.
Deriv is the only regulated synthetic indices broker in the world because it is the broker that ‘created and owns' these synthetic indices.
No other broker can offer these trading instruments because they do not have access to the random number generator and if they did, it would be illegal.
On the contrary, over 1000 brokers offer forex and stock trading instruments because no one ‘owns' these markets.
Any broker that can get real-time quotes of the forex and stock markets can easily provide them for trading to their clients.
Synthetic indices move due to randomly generated numbers that come from a cryptographically secure computer programme (algorithm) that has a high level of transparency.
The random number generator has been programmed in such a way that the numbers it gives out will reflect the same up, down and sideways movement that you will see on a forex or stock chart.
No, Deriv does not manipulate the movement of synthetic and volatility indices. In fact, this would be illegal and unfair as they could turn the market against traders.
The random number generator that moves the volatility indices charts is continually audited for fairness by an independent third party to ensure fairness and the broker cannot predict the numbers that will be generated.
If you want detailed step-by-step instructions with pictures showing the various steps you can check out this article.You can also visit the Deriv website by clicking on the button below
Visit Deriv WebsiteDeriv offers the following list of synthetic indices that have different movements.
Volatility 10 index is the least volatile while volatility 100 index represents the most volatile market conditions.
There is also another type of volatility indices that are called (1s). These also range from 10% to 100% volatility.
The key difference is that they update at the rate of one tick per second as compared to the normal volatility indices which update at the rate of one tick every two seconds.
A tick is the minimum price movement of an index.
2.) Crash & Boom Indices
The crash and boom indices simulate rising and falling real-world monetary markets. In other words, they behave specifically like a booming or crashing financial market.They are different from volatility indices or currencies which have a more ‘normal' behaviour. There are four types of boom and crash indices namely:
4.) Range Break Indices
The range break indices simulate a ranging market that breaks out of the range after a number of attempts on average.
There are two types of Range Break indices: Range 100 index and Range 200 index.
The Range 100 index breaks out after an average of 100 attempts while the Range 200 index breaks out after 200 attempts on average.
Volatility Index |
Smallest lot size |
| Volatility 10 Index | 0.3 |
| Volatility 25 Index | 0.50 |
| Volatility 50 Index | 3 |
| Volatility 75 Index | 0.001 |
| Volatility 100 Index | 0.2 |
| Volatility 10 (1s) Index | 0.5 |
| Volatility 25 (1s) Index | 0.50 |
| Volatility 50 (1s) Index | 0.005 |
| Volatility 75 (1s) Index | 0.005 |
| Volatility 100 (1s) Index & Step Index | 0.1 |
| Boom 1000 Index | 0.2 |
| Crash1000 Index | 0.2 |
| Boom 500 Index | 0.2 |
| Crash 500 Index | 0.2 |
Calculating the lot sizes in synthetic indices trading can be a bit tricky. This is because each synthetic index has its own different lot size as opposed to forex where all pairs use the same lot size with the minimum being 0.01.
Now we are going to compare synthetic indices vs forex to see their similarities & differences.
Now let's look at the advantages and disadvantages of trading these popular synthetic indices.
Synthetic indices have uniform volatility around the clock. This means that you can trade them at any time of the day. This is different from forex where there are some periods with low volatility
There is no set minimum deposit amount needed to trade synthetic indices. You can transfer as little as $1 from your main account to your DMT5 synthetic indices account. However, the challenge with such a low deposit is that you will probably blow the account in seconds due to the volatility. We would suggest funding your trading account with at least $50 to be able to ride out any short-term reversals that may go against you.
You can fund your DMT5 account using payment agents, or via Dp2p if you want to use your local payment methods. You can even use many of the deposit methods accepted by Deriv including Skrill, Neteller, AirTm, PerfectMoney, WebMoney etc.
No, synthetic indices are not manipulated by Deriv. They move due to an algorithm that has a high level of transparency. The random number generator that moves the volatility indices charts is continually audited for fairness by an independent third party to ensure fairness and Deriv cannot predict the numbers that will be generated.
This depends on personal preference. There are a variety of synthetic indices that have different levels of volatility and market character. If you prefer high volatility you can choose assets like v75 and v100. For slower volatility, you can choose indices like v210 or v25. It is best to demo trade a variety of volatility indices so you can choose which ones you prefer.
Deriv is the only broker that offers boom and crash indices. You can open an account to trade boom and crash here.
Synthetic indices have uniform volatility around the clock. This means that you can trade them at any time of the day. This is different from forex where there are some periods with low volatility
There is no set minimum deposit amount needed to trade synthetic indices. You can transfer as little as $1 from your main account to your DMT5 synthetic indices account.
However, the challenge with such a low deposit is that you will probably blow the account in seconds due to the volatility. We would suggest funding your trading account with at least $50 to be able to ride out any short-term reversals that may go against you.
You can fund your DMT5 account using payment agents, or via Dp2p if you want to use your local payment methods. You can even use many of the deposit methods accepted by Deriv including Skrill, Neteller, AirTm, PerfectMoney, WebMoney etc.
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