AA Global What Are Synthetic Indices? A Beginner's Guide (2026)
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
Keep learning
New to trading entirely? Start with the free beginner course — 20 short lessons from zero to your first demo trade.