A Synthetic Indices product is one form of financial derivative that allows traders to bet on movements in the prices of several different markets without actually buying the underlying instrument. These are made by bundling several investment vehicles into a composite that imitates a true market benchmark. The best-known artificial indices are the boom and bang indices, which aim to imitate dramatic market situations.

Synthetic Indices- Boom and Crash Strategy

Traders in the synthetic indices market also use, among other strategies, the boom and crash strategy. It is necessary to trade with one of the Boom 500 or Crash indices on the Deriv MT5 Trading platform. Buy low and sell high in the boom market, and sell high but buy low in the crash market.

The “Boom and Crash” plan requires a minimum deposit of $100 and is available on the Deriv MT5 trading platform. Its risk management is very high, while its reward for success is equally great. Therefore, this strategy suits not only first-time but also experienced traders.

Synthetic Indices- Vix Index

Finally, the Vix index, commonly referred to as the “fear gauge”, indicates how volatile the market is. The indicator assists traders in measuring bullish or bearish feelings in the market. When the Vix index is high, there is a high sense of fear among investors. On the other hand, complacency is reflected in a lower Vix index.

The Vix Index can serve as a guide for how traders make their trades in the synthetic index market. For instance, a high Vix index could imply a favorable time to carry out trades on the Crash index, and a low one indicates a favorable period to carry out trades on the Boom index.

Broker for Synthetic Trading

The selection of a good broker for synthetic trading is equally vital to winning the game. A good broker should provide competitive spreads, reliable trading software, and top customer service. Deriv MT5 is one such broker that offers various synthesis indices for trade.

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Traders may be able to profit during extreme market conditions using synthetic indices. Given an appropriate plan and broker, traders have a chance of earning big profits despite spending little. So why wait? Synthetic trading starts now; join the Deriv MT5 platform.

Synthetic Indices

Note: Trading involves risk. Be sure to always trade with what you are willing to lose completely.