Synthetic indices replicate real-world market dynamics using a cryptographically secure random number generator. Tradable 24/7, they are immune to regular market hours, global events, and liquidity risks, offering traders unique opportunities for continuous engagement. These indices are offered by Deriv broker.
The Popularity of Volatility 75 Index
The Volatility 75 Index, often referred to as VIX 75 or the fear index is a benchmark for market fear, stress, and risks. A high VIX indicates elevated market fear, typically following a market crash, and correlates with a drop in the S&P 500. Conversely, a low VIX suggests reduced fear and an upward trend in the S&P 500. This makes VIX 75 a valuable tool for gauging market sentiment.
Understanding Market Volatility
Market volatility reflects the rapid price fluctuations of stocks. High volatility, indicating significant price changes, can lead to uncertainty but also offers the potential for substantial profits. Analyzing the Volatility Index chart helps traders understand a stock’s volatility, crucial for portfolio decisions and assessing the Cboe VIX, a key market volatility indicator.
Common Synthetic Indices
Synthetic indices include:
- Volatility 10 Index
- Volatility 25 Index
- Volatility 50 Index
- Volatility 75 Index
- Volatility 100 Index
Deriv’s synthetic indices act like virtual playgrounds, each offering a distinct level of volatility – from the gentle ripples of a 10% market to the exhilarating whitewater rapids of a 100% volatility zone. This spectrum of simulated environments empowers you to tailor your trading experience and experiment with different strategies.
Benefits of Trading Synthetic Indices
- Fixed Risk Exposure: Traders know potential risks upfront without surprise margin calls.
- Low Capital Requirement: Start trading without needing significant capital.
- Fast Order Execution and Liquidity: Enjoy seamless trading with deep liquidity.
- 24/7 Trading: Trade anytime, including weekends and holidays.
Tailored Trading Strategies
Smart Money Trading Course For traders looking to maximize the potential of synthetic indices, GhostTraders’ smart money course offers a comprehensive approach. The course teaches effective strategies that can be applied across various markets, including Deriv’s synthetic indices, empowering traders to make informed and profitable trading decisions.
