Your Complete Guide to Synthetic Indices
Learn everything about synthetic indices trading – what they are, how they work, and where to trade them with comprehensive guides and strategies.
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What Are Synthetic Indices?
Synthetic indices are simulated financial markets that mimic real-world price movements but are not tied to any underlying asset. Generated by cryptographically secure random number generators, they provide unique trading opportunities with predictable volatility patterns.
24/7
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Trade anytime without market closures, gaps, or limitations
Zero Influence
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Purely mathematical, unaffected by news or economic events
Predictable
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Each index has predetermined volatility levels you can choose
Always Liquid
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Instant execution at displayed prices with no slippage
Trade on volatility itself with indices like Volatility 10, 25, 50, 75, and 100, or explore specialized indices like Crash and Boom that simulate extreme market movements with predictable patterns.
Official Brokers for Synthetic Indices
Only two brokers worldwide offer synthetic indices trading
DERIV
Deriv.com
The original and largest broker offering synthetic indices. Deriv pioneered this market and offers the most comprehensive selection of instruments.
- Volatility Indices (V10, V25, V50, V75, V100)
- Crash Indices (300, 500, 1000)
- Boom Indices (300, 500, 1000)
- Step Indices
- Jump Indices
- Range Break Indices
- MT5, DTrader, DBot platforms
- Demo accounts available
- Minimum deposit $5
WELTRADE
Weltrade
Offers proprietary SyntX instruments with unique features like simulated news events and alternating price patterns.
- FX Vol. – Fixed volatility forex replication
- SFX Vol. – With simulated news spikes
- PainX (400, 600, 999, 1200) – Drops with jumps
- GainX (400, 600, 999, 1200) – Rises with jumps
- FlipX – 50/50 random price movement
- SwitchX – Alternates PainX/GainX
- BreakX – Switches on price breach
- MT4 & MT5 platforms
- Leverage up to 1:10,000
- Minimum deposit $1
Types of Synthetic Indices
Explore different synthetic indices from both brokers
Volatility Indices (Deriv)
Constant volatility markets available in V10, V25, V50, V75, and V100. Each number represents the annualized volatility percentage.
V10 – V100
FX Vol. & SFX Vol. (Weltrade)
FX Vol. replicates forex with fixed volatility. SFX Vol. adds simulated news releases causing price spikes for dynamic trading.
SyntX
Crash Indices (Deriv)
Experience sudden drops at regular intervals. Crash 300, 500, and 1000 drop on average once every specified number of ticks.
High Volatility
PainX (Weltrade)
Price decreases with occasional sharp drops. Available in PainX 400, 600, 999, and 1200 with varying leverage levels.
High Leverage
Boom Indices (Deriv)
Opposite of Crash – sudden upward spikes. Boom 300, 500, and 1000 spike at regular intervals offering unique opportunities.
High Volatility
GainX (Weltrade)
Price increases with occasional sharp jumps upward. Available in GainX 400, 600, 999, and 1200 versions.
High Leverage
Step Indices (Deriv)
Predictable step patterns ideal for trend-following strategies. Move in consistent incremental steps.
Moderate
FlipX (Weltrade)
Offers a 50/50 chance of price increase or decrease with each tick. Perfect for probability-based strategies.
Balanced
Jump Indices (Deriv)
Random price jumps at intervals, adding excitement and opportunities for quick profits with strategic entries.
Variable
SwitchX & BreakX (Weltrade)
SwitchX alternates between PainX and GainX patterns. BreakX switches modes when new jumps breach previous levels.
Advanced
Range Break Indices (Deriv)
Oscillate within ranges and break out at predetermined intervals. Perfect for range-bound trading strategies.
Controlled
Getting Started
Begin your synthetic indices trading journey
1
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Learn the Basics
Understand how synthetic indices work, their characteristics, and types available from both brokers
2
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Choose Your Broker
Select Deriv or Weltrade based on indices and platform features that suit your style
3
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Practice on Demo
Both brokers offer demo accounts – practice with virtual money and test strategies risk-free
4
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Develop Strategy
Create and test a trading strategy matching your risk tolerance – start small and scale up
5
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Manage Risk
Use proper position sizing, set stop losses, never risk more than you can afford to lose
6
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Start Trading
Begin with small positions on live account – track performance and refine your approach
Synthetic vs Traditional Markets
Understanding the key differences
| Feature | Synthetic Indices | Traditional Markets |
|---|---|---|
| Trading Hours | ✓ 24/7 Non-stop | ✗ Limited Hours |
| Market Gaps | ✓ No Gaps | ✗ Frequent Gaps |
| Volatility | ✓ Predictable | ✗ Unpredictable |
| Execution | ✓ Instant | ✗ Variable |
| News Impact | ✓ Unaffected | ✗ Highly Affected |
| Liquidity | ✓ Always Liquid | ✗ Variable |
Frequently Asked Questions
Common questions from new traders
Can I lose more money than I deposit?
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No, with both Deriv and Weltrade, you cannot lose more than your account balance. Your maximum loss is limited to the funds you’ve deposited. However, it’s important to use proper risk management and never deposit money you cannot afford to lose.
Are synthetic indices legal in my country?
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Synthetic indices availability depends on your country’s regulations. Both Deriv and Weltrade have restrictions based on location. Check with your chosen broker to confirm if synthetic indices trading is available in your jurisdiction before opening an account.
What’s the difference between Deriv’s and Weltrade’s indices?
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They are completely different products. Deriv offers Volatility, Crash, Boom, Step, Jump, and Range Break indices. Weltrade offers SyntX instruments including FX Vol., SFX Vol., PainX, GainX, FlipX, SwitchX, and BreakX. Each has unique characteristics and trading behaviors.
How long does it take to become profitable?
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There’s no set timeframe. Success depends on your learning speed, dedication, risk management, and emotional discipline. Most successful traders spend months practicing on demo accounts before trading live. Focus on consistent small profits rather than quick large gains.
Can I use trading bots or Expert Advisors?
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Yes, both brokers support automated trading. Deriv offers DBot for visual bot creation and supports EAs on MT5. Weltrade supports EAs on both MT4 and MT5 platforms. However, test any automated strategy thoroughly on demo before using real funds.
What happens if the broker’s platform goes down?
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Both brokers maintain high uptime, but technical issues can occur. Open positions remain active during platform downtime. Most brokers allow you to contact support to manually close positions if needed. Always use stop losses to protect against extended outages.
Can I trade both Deriv and Weltrade indices simultaneously?
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Yes, you can maintain accounts with both brokers and trade different indices on each platform. Some traders do this to diversify their strategies across different synthetic instruments. Just ensure you can manage multiple positions responsibly.
Do I need to pay taxes on synthetic indices profits?
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Tax obligations depend on your country’s laws. In most jurisdictions, trading profits are taxable income. Consult with a tax professional in your country to understand your specific obligations. Keep detailed records of all trades for tax reporting purposes.
Ready to Learn More?
Explore synthetic indices with Deriv or Weltrade and start your trading journey today