Broker to Trading

Deriv offers a wide range of Synthetic Indices to trade across a range of platforms, from desktop to mobile apps. Synthetic Indices are based on algorithms, simulate different market conditions and may be traded 24/7.

Deriv has a low minimum deposit of $5 and allows a wide range of payment methods. For some ways to trade the minimum order size is $0.35 and on MT5 and Deriv X the minimum trade size can go as low as 0.001 lots, with leverage up to 1000:1 on selected Indices (in some regions).

At Deriv, traders can trade Synthetic Indices as leveraged markets, as Multipliers, as Options, as Vanilla Options, as Accumulators and as Turbos.

Traders who want to trade Synthetic Indices may do so at a broker which has been providing them for years (previously as Binary.com), offering a wide range of Indices and a wide range of ways to trade them. The trader can try out Synthetic Indices first on a demo account. Deriv Sign-Up

What is a Synthetic Index ?

A Synthetic Indices is a simulated market. It uses a random number generator and a propriatory algorithm to create movement on a chart. Because they are not based on real markets, which normally (but not always) open and close, Synthetic Indices can be traded 24/7 (excluding server maintenance). A core feature of Synthetic Indices is that they can be chosen based on market conditions. For example the trader can pick the type of volatility for the Index, or simulated falling or rising markets.

What is Deriv like ?

Deriv is a suite of platforms (some features may not be available in some countries). When it is opened, the trader lands on Deriv Trader (DTrader). Deriv Trader is related to SmartTrader (Binary.com's flagship options platform), but it provides a more intuitive interface for trading options and multipliers. Deriv Trader does not have all the ways to trade options offered by SmartTrader, however SmartTrader is also on Deriv.

This is one of the features of Deriv, the trader simply moves to another integrated platform via the drop down menu or the Traders hub tab, with a varied range of functionality. The Traders hub contains leveraged CFD platforms. As well as SmartTrader, Deriv offers Deriv Bot (DBot), which is a platform for building and running online trading robots based on options. The trader does not code when using Deriv Bot. Rather they set parameters and drag and drop blocks to create robots.

The set of platforms offering leveraged trading are to be found from the 'Trader's Hub' tab, and these are MT5, Deriv X, cTrader and Deriv EZ. There is an MT5 web trader available from the 'Trader's Hub', however from Deriv, the trader may download desktop MT5 and mobile MT5 and trade Synthetic Indices on these platforms as well. The same goes for cTrader, which is offered on desktop download, web trader and mobile. There are three account types. These are Financial, Financial STP and Derived. Since this review is about Synthetic Indices, it will focus on Derived, however on Financial and Financial STP, the trader can trade 100+ CFDs (including Stocks CFDs) based on real markets.

On MT5 Derived, the trader can trade Synthetic Indices 24/7 on MT5, as well as Basket Indices for Forex and Metals. MT5 is the successor to MT4 and offers an expanded range of features. This includes the capacity to analyse markets using MT5's range of tools and technical indicators. There are charting tools on Deriv Trader and SmartTrader, but these are more limited than those on MT5.

Deriv also provides Deriv GO, which is an app for trading multipliers on markets including Synthetic Indices. From Deriv GO, the trader can create a Deriv EZ account which allows for leveraged trading of Synthetic Indices.

From the 'Trader's Hub', the trader can open a cTrader account. cTrader offers a wide range of features including automated and copy trading in a user friendly trading interface.

Finally, Deriv offers Deriv X, which is a user friendly platform for leveraged trading of CFDs based on real markets and Synthetic Indices. The trader opens a Deriv X Synthetic Account from the Deriv X tab on the Deriv platform in the 'Trader's Hub'.

The trader may test out Deriv on a demo account and then add at least the minimum deposit of $5 to trade on the real account. Deriv Sign-Up

Synthetic Indices charts and strategies

Charts to analyse Synthetic Indices are offered on Deriv Trader, SmartTrader, MT5, cTrader, Deriv X, Deriv GO and Deriv EZ. The charts on Deriv Trader, SmartTrader, Deriv GO, Deriv EZ and Deriv X aim to be intuitive. The most comprehensive charts are on MT5, cTrader and Deriv X. On all these charts, the trader can find tools such as graphical objects, chart price types and technical indicators to facilitate charting based analysis, to provide a way to enter, manage and exit a trade. Deriv GO and Deriv EZ has more simplified, intuitive charting.

Charting analysis can provide a way to build strategies, for example using a technical indicator to provide entry and exit signals, or using support and resistance on a chart to help manage a trade. The capacity to set volatility levels or choose types of markets provided by Synthetic Indices adds a different perspective on trading (as this is not possible when trading on real markets), thus the trader may wish to consider the capacity to pick volatility, for example as part of the way they design a Synthetic Indices MT5 strategy.

Deriv Sign-Up

One strategy used in trading on real markets is to try and find markets with less or more volatility and apply different strategies based on this, but the problem with this strategy is that volatility can disappear or return in unpredictable ways. With Synthetic Indices, the trader can find these market types by choosing a type of Index. Thus a strategy based on high volatility (for example trading on momentum using a candlestick chart to show when momentum is increasing or decreasing) can actually be applied to this type of market. However all strategies should be tested out on a demo first and strategies may not work in practice.

Can a trader analyse a Synthetic Index ?

These indices aim to simulate markets, thus they can be analysed. The trader may wish to note that when picking a market they are choosing the type of market conditions it simulates. For example, if they pick a Volatility 10 Index, they are choosing a market with lower volatility. Real markets have the capacity to change volatility levels, without warning. A technical indicator is based on this type of market.

However with the caveat that the trade is fixing to some extent market conditions which cannot be fixed with real markets, indicators may be applied to provide trading signals. This said, underlying a Synthetic Index is an algorithm based on random numbers and this may produce output which though it looks like a real market, may have subtle but important differences.

The trader may wish to test out analysis on Synthetic Indices on a demo account. Does Deriv have a demo account ? It does, with $10,000 of virtual funds in it. Demo accounts are created in different ways depending on the platform. Some allow for switching between virtual and demo, but others require a demo account to be created from the Traders hub. Virtual funds are not real money and cannot be withdrawn, but can be used to practice trading and test out the platforms and the range of Synthetic Indices. Deriv Demo

What Synthetic Indices are available on Deriv ?

The MT5 Derived account has a wide range of Indices to trade on this platform. This account is for margin trading Synthetic Indices CFDs but also offers FX and Metals Basket Indices. The leverage offered is up to 1000:1 (increasing leverage increases risk). So the trader can trade with smaller account sizes, or larger as they wish. The minimum trade sizes offered varies from Index to Index and can change, however the lowest is 0.001.

On Deriv MT5 Derived, the following Volatility Indices are available: Volatility 10, Volatility 10 (1s), Volatility 25, Volatility 25(1s), Volatility 50, Volatility 50 (1s), Volatility 75, Volatility 75 (1s), Volatility 100 and Volatility 100 (1s). Additionally Volatility 150 (1s), Volatility 200 (1s), Volatility 250 (1s) and Volatility 300 (1s) Indices are available. The number after Volatility indicates the level of volatility, lower being lower volatility, higher being higher volatility, while the (1s) indicates that the Index updates faster, every 1 second. However there are more than Volatility Indices.

Deriv is a boom and crash index broker. On the MT5 Derived, cTrader, Deriv EZ and Deriv X accounts there are Crash Boom Indices, which simulate sudden spikes on the chart. The Crash and Boom Indices come in three types, Crash 500 or Crash 1000 and Boom 500 or Boom 1000 or Crash 300 and Boom 300 types. On average the 500 Indices have a drop (Crash) or rise (Boom) in the price series every 500 ticks, while the 1000 Indices have a drop (Crash) or rise (Boom) in the price series every 1000 ticks. There is also a Step Index, which has an equal probability of going up or down with each step. The Volatility, Boom and Crash and Step Indices are also offered as Multipliers on Deriv Trader and Deriv GO.

Deriv offers as well the Range Break Indices. These Indices break the range once every 100 attempts on average for the Range Break 100 Index and once every 200 attempts on average for the Range Break 200 Index.

There are five Jump Indices (Jump 10, Jump 25, Jump 50, Jump 75 and Jump 100) which have different volatility, but jump three times per hour. Jump Indices are also offered at Multipliers on Deriv Trader and Deriv GO.

Next are the DEX Indices. These simulate news trading events, with sudden spikes or drops and come in six types: DEX 600 UP, DEX 600 DOWN, DEX 900 UP, DEX 900 DOWN, DEX 1500 UP and DEX 1500 DOWN.

Finally there are the Drift Switching Indices. These simulate action around trends, switching between upwards, downwards and sideways movement phases and come in three types: Drift Switch 10, Drift Switch 20 and Drift Switch 30. The numbers 10, 20 and 30 refer to the time on average taken for switching to a different phase to occur.

Where does the trader find all the markets offered on MT5 - from the Symbol tab where the trader can add Indices not already in the Symbol Market Watch window on MT5.

Synthetic Indices are also available to trade on Deriv Trader, SmartTrader and Deriv Bot, as Volatility Indices, Jump Indices and Daily Reset Indices and as Volatility Indices, Jump Indices, Crash Boom Indices and the Step Index on Deriv Trader and Deriv GO. These are not margin trading, but are based on options and multiplier options. So there is a format defined by a trade type, which sets an outcome to choose and a time for the trade. Like margin trading, these have a payout.

On Deriv Trader, the trader can trade Synthetic Indices as Options, Vanilla Options, Turbos, Accumulators and Multipliers, so this platform has the most ways to trade Synthetic Indices but not the widest range of Indices. The widest range of Indices is reserved for the leveraged trading platforms, excluding cTrader, which has its own set of Synthetic Indices covering Boom/Crash and Volatility Indices.

The payout varies depending on a range of factors, but can be greater than 200% on selected trades, for successful trades. When the trade is unsuccessful, the trader loses the stake. When the trade is successful, the trader receives the stake plus the payout rate percentage specified in the trade. The higher the payout rate offered, in general the harder the trade (the less likely it is projected that it will be successful).

As the underlying for these trades is a Synthetic Index, the trader can also analyse them using technical and other charting tools, using the platforms. This analysis can provide some basis for making a decision of what outcome to choose. However like all analysis it can be wrong. The trader may automate a strategy they have applied via Deriv Bot and run these robots 24/7 if they wish.

Deriv Bot aims to be a more intuitive way to build robots, but still takes practice to use (which can be done with no risk on the demo account). The trader can test out robots before they run them for real, but because a robot has performed well in a demo or on past data, does not mean it will continue to do so.

If the trader wants to run robots on MT5 applied to the Synthetic Indices traded on margin, they may also do so by adding an Expert Advisor (EAs). EAs are online trading robots which will execute trades in behalf of the trader, for example based on an indicator signal. EAs however can rapidly produce losses in the trader's account.

One feature of Synthetic Indices is that the trader can, unlike real markets try to match volatility to the time frame chosen. For example, the trader may wish to try more and less volatile markets on short term trading. Deriv offers very short term trading indeed, down to 1 second. But on more typical short term trades of 60 seconds, the trader can test how volatility affects the way they may trade on short term time frames with the demo account.

Why trade Synthetic Indices on Deriv ?

Deriv offers a range of platforms to trade Synthetic Indices in an intuitive layout, with features and platforms for a wide range of traders. The trader can move from user friendly Deriv Trader to SmartTrader which has an expanded range of trade types, to automating options robots on Deriv Bot with drag and drop (no coding needed) to trading Synthetic Indices with margin on user friendly Deriv X, on the mobile Deriv EZ account and on MT5. Additionally the trader may trade Synthetic Indices with Multipliers on the Deriv Go app. So the trader can try out different approaches and strategies to trading these simulated markets.

As Synthetic Indices are not based on real markets, they can be traded 24/7. Deriv Trader has a very small minimum order size of $.35 and Deriv itself has a minimum deposit of $5. Thus the trader may trade with smaller account sizes. To trade with no risk, they may use the demo account, which can be switched to at any time. If they wish the trader can trade with larger account sizes. All the platforms except MT5, Deriv EZ, Deriv GO and Deriv X offer trading with fixed time trades and payouts, for successful trades.

MT5 and Deriv X provides margin trading, with leverage up to 1000:1 on Synthetic Indices CFDs. Deriv EZ and cTrader also offer margin trading, with leverage up to 4000:1 on Synthetic Indices CFDs. A wide range of Synthetic Indices are on the MT5 Derived account. If the trader wants to try out Synthetic Indices, Deriv and its range of platforms they can sign up for a demo account and then a real account below.