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In order to trade synthetic indices, retail traders need brokers to help implement trades taken. Since synthetic indices are not as popular as other financial markets like forex and stocks, there are not many reputable brokers that allow the trading of synthetic indices. Let’s dive into the types of synthetic indices and a then we will review of some of the best brokers that support trading synthetic indices.

synthetic indices broker

This includes the China 50 and Hong Kong 50, both of which are excellent ways to learn about the Asian economies. This site now supports the EURO STOXX 50, an index that measures 50 large-cap firms from the European Union. Other indices supported on the site include Volatility indices, Crash and Boom indices, and daily reset indices.

  • To make a synthetic index, a cryptographically secure random number generator is used.
  • CFDs for index futures have an expiration date and are settled in cash on that day.
  • These include significant indexes from the US, Australia, and EU member states and some synthetic indices such as Volatility indices, Crash and Boom, and jump indices.
  • These indices are based on a cryptographically secure random number generator, have constant volatility, and are free of market and liquidity risks.
  • Pepperstone has low slippage and one of the fastest average market execution times which stand according to Pepperstone at 60 milliseconds.

Synthetic trading can be profitable if you know your trading strategy well and apply proper risk management. Just like other financial markets (like forex, stocks, and crypto), there is also the risk of losing your trading capital while live trading synthetic indices. It is advisable to backtest and/or demo trade a trading strategy on the specific synthetic index before you invest your hard-earned money to live trade.

synthetic indices broker

But in crypto trading, you become the owner of the assets, even if they are digital. But in this case, you are merely speculating on the price changes with insane leverage. These include CFDs on forex, commodities, indices, shares, and cryptocurrencies, among others.

In addition, native support for your local currency will help you avoid conversion fees. However, traditional stocks, futures and options brokers typically shy away from the less transparent natures of simulated synthetic indices. However, this does not mean that asset-based synthetic index investments are safe.

synthetic indices broker

Also check for login security measures like two-factor authentication plus risk management features on the firm’s platform. But their values are usually determined by cryptographically-secure random number generators – not underlying assets. CFD broker Saxo offers VIX CFDs as well as DMA VIX on-exchange futures contracts. MT4 broker XTB offers the ability to create your own basket of assets to trade so you can trade volatility indices against other assets like Gold and USDJPY.

Deposits and withdrawals can be made via multiple methods including wire transfer, skrill, visa, master card, and much more. One of the key advantages of synthetic indices is that they allow traders to gain exposure to a particular market or index without having to buy the underlying assets. This means that traders can speculate on the performance of a market or index using a single financial instrument, rather than having to buy multiple assets. This can make trading more efficient and cost-effective, as traders do not have to pay multiple commissions or deal with the logistics of buying and selling multiple assets.

As a result, the process of buying a product at, perhaps, $50 when the options product is exercised or expires will be replicated. We’re dedicated to giving you the very best in investing education with a focus on detailed guides in complex financial topics, trading, economics and personal finance. Deriv GO is the company’s mobile app, and it’s designed specifically for trading while you’re on the move. This is wonderful news since, in all likelihood, no one can stay in bed all day long in the hope that a favorable deal will come along. DBot doesn’t require constant monitoring, allowing you to step away from your computer without missing opportunities. For example, you can open a Fall (sell) trade on the Volatility Index in 2 hours and a Rise (buy) trade on the same index in 2 minutes.

The Range Break 200 index is designed to successfully break the range on average once every 200 times it is attempted. Range break indices are used to simulate a range-bound market that, after a predetermined number of attempts, successfully breaks out of its trading range. The Range 100 index and the Range 200 index are the two range break indices that are used the most frequently. Mean reversion is based on the assumption that prices will eventually move back towards the mean or average. Traders look for setups in which prices have deviated significantly from a historical average, and trade on the expectation of a return to the average. Identifying and following the trend without worrying about upcoming fundamental news could offer a comfortable point for technical traders.

The position will be closed when the spike comes to an end, which is why many traders avoid trading against spikes; doing so might result in a substantial loss in a very short amount of time. One of the most important characteristics of these artificial indexes is that they are not influenced by fundamentals such as current events or news. The trading of synthetic indices is possible around the clock, 365 days a year. These indices also feature consistent volatility and regular generation intervals.

synthetic indices broker

We review and rate companies offering trading platforms for Forex, CFDs and other financial instruments. We do our best to warn people about scams and promote only companies we personally consider to be very good. For example, the best brokers with are regulated by the FCA, SEC, ASIC or CySEC. This regulatory oversight provides traders with some level of protection against fraud, market manipulation, and other forms of misconduct.

Clients have access to the xTrader 5 platform that is built by XTB itself. Hence, it is suitable for all kinds of traders, whether experienced or inexperienced. Trading Point of Financial Instruments Ltd, founded in 2009 and governed by the Cyprus Securities and Exchange Commission, owns and operates XM. XM offers several trading assets such as Trade Forex, Individual Stocks, Commodities, Precious Metals, Energies and Equity Indices.

The Good Money Guide is a UK-based guide to global trading, investment and currency accounts. We offer expert reviews, comparison, news,  analysis, interviews and guides so you can choose the best provider for your needs. IG have an impressive selection of 18,000+ instruments including Forex, Stocks, Cryptos and Commodities. You can trade via easy to use platforms for desktop and mobile apps, with low trading costs and the peace of mind that you are using one of the most well-known brokers in the industry. Trading services on OANDA are delivered through state-of-the-art platforms, including the fxTrade app, MetaTrader 4, and MetaTrader 5.

Synthetic indices are a type of financial instrument that mimics the behavior of real financial markets. Unlike traditional assets such as stocks or commodities, synthetic indices are generated by algorithms, combining various market components to create a simulated market environment. These indices are known for their continuous availability, offering trading opportunities 24/7, which is a stark contrast to traditional markets that operate during specific hours. Olymp Trade has established itself as a prominent online trading platform, offering a variety of financial instruments, including synthetic indices. The platform caters to traders globally and is known for its user-friendly interface and educational resources. Traders are involved in the financial markets with the goal of maximizing profit.

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