What Are Synthetic Indices? A Beginner's Guide (2026)

Illustration of a candlestick chart driven by a random number engine, running 24/7

Key takeaways

Synthetic indices are simulated markets exclusive to Deriv, driven by an audited random-number engine
They trade 24/7/365 and are unaffected by news events
Volatility indices (V75, V100) move constantly; Boom/Crash grind one way and spike the other
The same chart-reading and risk skills from real markets apply
They are volatile, small lot sizes and the 1% rule are non-negotiable

The idea

A synthetic index is a market generated by computer to behave like a real one, it trends, ranges, and spikes, but its price comes from a cryptographically secure random-number generator with a fixed, published volatility, not from world events. Deriv (the only broker offering them) cannot see or influence the next tick, and the engine is independently audited.

The families you'll meet

Volatility indices (V10 → V100)

The number is the volatility level: Volatility 75 moves with 75% annualised volatility, Volatility 100 with 100%. Higher number = wilder movement. They tick every 2 seconds (the "(1s)" versions tick every second and move roughly twice as hard). These trade like a fast, news-free forex pair.

Boom and Crash

These have a personality: Crash 500 grinds upward and periodically drops in a sudden spike (on average once every 500 ticks); Boom 500 grinds downward and spikes up. The spikes are the danger and the opportunity, trading against the spike direction is how beginners get hurt here.

Why traders across Africa like them

Open 24/7, 365 days, trade after work, on weekends, on holidays
No news risk, no central bank announcement can gap your position
Small accounts work, minimum lot sizes let you trade properly with $20–$50
Consistent behaviour, volatility is constant by design, so what you practise is what you get

The honest cons

One broker only. Synthetics exist only on Deriv, there's no shopping around on spreads.
Volatility cuts both ways. V75 can move against you very fast; oversized lots die quickly here.
No fundamental edge. There's no news to analyse, technical reading and risk discipline are the entire game.
Myths everywhere. "Spike is overdue", secret bots, guaranteed strategies, the random engine is memoryless, and anyone selling certainty is selling to you, not for you.

How to start (the sane way)

Open a free demo, $10,000 virtual, no deposit
Learn to read the chart and size positions, our free course covers exactly this
Practise 20 journaled demo trades before any real money
Go real with a small amount and the 1% rule

Try trading free, $10,000 virtual demo →

Frequently asked questions

Are synthetic indices real markets?

No. Synthetic indices are simulated markets available only on Deriv. Their prices come from a cryptographically secure random-number generator with a fixed, published volatility, not from real-world supply and demand. They are designed to behave like real markets, they trend, range and spike, but no bank, news event or economy affects them.

Can you make money trading synthetic indices?

Yes, but it is difficult and around 70% of retail traders lose money. There is no fundamental edge because there is no news to analyse; success comes entirely from technical chart reading and strict risk management. Realistically, you learn on a free demo account until consistent, then trade small with real money using the 1% risk rule.

Are synthetic indices rigged or fixed?

No. The random-number engine that generates the prices is independently audited, and Deriv cannot see or influence the next price tick. Because the engine is memoryless, myths like "a spike is overdue" are false, each moment is statistically independent of the last.

What is the best synthetic index for a beginner?

Volatility 75 (V75) and Volatility 100 are the most common starting points because they move steadily and predictably. Boom and Crash indices are harder for beginners because they grind slowly in one direction then spike sharply in the other, trading against the spike direction is the main way beginners lose on them.

Do synthetic indices trade 24/7?

Yes. Synthetic indices trade 24 hours a day, every day of the year, including weekends and holidays, because they are not tied to any real exchange or market session.

Can you lose more than your deposit trading synthetic indices?

It depends on the product. On Deriv Trader multipliers and options, no, your maximum loss is capped at your stake and shown before you trade, plus there is negative balance protection. On leveraged CFD positions, a fast move can wipe a position very quickly, which is why small lot sizes and the 1% rule are essential. Never risk money you can't afford to lose.

Written by Tony: AA Global FX
Tony runs a live trading desk on Deriv synthetic indices and index CFDs and has published 116+ free trading tutorials on YouTube since 2022. About · YouTube
Last updated: 2026-07-30

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