Volatility Indices on Deriv.com are synthetic indices designed to mirror real-world financial markets with consistent volatility characteristics. This distinguishes them from forex pairs, which exhibit varying levels of volatility over time.
Financial market volatility refers to the degree of fluctuation in asset prices within a given period. High volatility signifies significant price changes occurring rapidly, whereas low volatility suggests minimal price movements over extended durations.
On Deriv, the volatility of these indices is quantified on a scale ranging from 1 to 100. A rating of 1 indicates minimal market volatility, while 100 denotes maximum possible volatility.
Deriv offers volatility indices at fixed volatility levels of 10%, 25%, 50%, 75%, and 100%. It stands out as the sole broker providing such a range of volatility indices.
Opening a volatility indices trading account with Deriv is a straightforward process. Follow these steps to get started:
Step 1: Visit the Deriv Website:
Go to the official Deriv MT5 sign-up page here.
Step 2: Sign Up
Click on the ‘Create free demo account' button on the page.
You can sign up using your email address, or you can use your Google or Facebook account for quicker registration.
Agree to the terms and conditions and click ‘Create free demo account‘.
Step 3: Verify Your Email:
After signing up, you will receive a verification email. Click on the link in the email to verify your address.
Step 4: Complete Your Profile:
Once your email is verified, log in to your new account and complete your profile by providing the required personal information, such as your name, date of birth, and address.
Also set your preffered account base currency.
Step 5: Verify Your Identity
For security purposes, Deriv requires you to upload documents to verify your identity and address. This could include a government-issued ID (like a passport or driver’s license) and a utility bill or bank statement. You can choose to verify the account later if you donty have the document at hand.
Get step by step instructions on how to verify a Deriv account here.
Step 6: Open a Synthetic Indices Account
Click on the (1) ”Trader's Hub option” on the top left of your dashboard. Then click (2) ‘Real‘ > (3) ‘CFD's‘.
Then choose the Deriv Standard Account. This account gives you access to synthetic indices and forex CFD's.
Choose the jurisdiction for your account.
Afterward, you will be prompted to set a password specifically for your real Deriv MT5 synthetic indices account. This password is exclusively for logging into your trading account on Deriv MT5 and is separate from your main Deriv account password.
After creating your account you will be prompted to transfer funds from your main Deriv account to your DMT5 synthetic indices account.
Step 7: Download MT5 & login
After completing Deriv real account registration mt5 you will now see the Deriv synthetic account listed with your login ID.
You will also get an email with your login ID that you will use to log in to the Deriv synthetic account.
Download the mt5 application for your device and log in.
Step 8: Start Trading
Once your account is funded, you can start trading volatility indices. Access the trading platform, select your preferred volatility index, and begin trading.
You can get step by step instructions on how to open a synthetic indices account here.
Deriv also offers another type of volatility indices called 1(s). The following 1(s) volatility indices are available for trading:
These indices update faster at the rate of one tick per second.
The Volatility 100 index (V100 index) has the highest volatility of all the indices that update at the rate of one tick every two seconds.
On the other hand, the Volatility 300 (1s) index has the most volatility of all the indices that update at the rate of one tick per second.
The volatility 10 index (v10) has the least volatility. It has only 10% of the volatility of v 100 index.
On the (1s) volatility indices V10 (1s) is the least volatile index with the slowest price changes over time.
Lot sizes determine the trade size you can place. Different volatility indices have different minimum lot sizes that you can trade. Below are the minimum volatility lot sizes.
Volatility Index |
Smallest lot size |
| Volatility 10 Index | 0.3 |
| Volatility 25 Index | 0.50 |
| Volatility 50 Index | 3 |
| Volatility 75 Index | 0.001 |
| Volatility 100 Index | 0.2 |
| Volatility 10 (1s) Index | 0.5 |
| Volatility 25 (1s) Index | 0.50 |
| Volatility 50 (1s) Index | 0.005 |
| Volatility 75 (1s) Index | 0.005 |
| Volatility 100 (1s) Index | 0.1 |
| Volatility 200 (1s) Index | 0.01 |
| Volatility 300 (1s) Index | 0.6 |
Determining lot sizes in volatility indices trading can be challenging due to each synthetic index having its own unique lot size, unlike forex where all pairs share a standardized lot size, typically starting from 0.01.
MT5 operates using a unit system known as points, which represents the smallest increment by which an instrument's price can change. The value of a point varies across symbols based on their price precision.
For instance, symbols with prices having 2 decimal places (e.g., 1014.76) set 1 point equal to 0.01. Therefore, 500 points on such symbols would amount to 5.00. Examples of synthetic indices with two decimal places include V10 (1s), V200 (1s), and V25 (1s).
Symbols with prices having 4 decimal places (e.g., 1.1213) set 1 point equal to 0.0001. Thus, 500 points on these symbols would equate to 0.0050. This applies to volatility indices like V50.
Choosing the best volatility index to trade on Deriv depends on your trading style, risk tolerance, and market strategy. Here are some considerations to help you decide:
Ultimately, the best volatility index to trade on Deriv is the one that aligns with your trading objectives, risk tolerance, and market understanding.
The V75 Scalping Trading Strategy focuses on the Volatility 75 Index and involves using Bollinger Bands, RSI, Stochastic Oscillator, and MACD across multiple timeframes to identify trade opportunities. Signals for buying or selling are confirmed through indicator thresholds and chart patterns, with strict rules for trade entry and exit to maximize profits and minimize risk.
Read the Strategy here
1. Consistent Volatility:
2. 24/7 Availability:
3. Diverse Trading Opportunities:
4. No Influence from Real-World Events:
5. High Leverage Options:
6. Practice Accounts:
1. High Risk with High Volatility:
2. Leverage Risks:
3. Lack of Real-World Market Correlation:
4. Potential for Overtrading:
5. Complexity in Lot Size Calculation:
6. Limited Information and Analysis Tools:
Volatility indices on Deriv are synthetic indices that simulate the behavior of real-world financial markets. They reflect market volatility and offer consistent volatility levels, allowing traders to speculate on market movements.
Volatility indices have fixed volatility levels, while forex pairs exhibit varying volatility over time. This makes volatility indices more predictable in terms of volatility, which can simplify trading strategies.
Deriv offers various volatility indices, including Volatility 10 (V10), Volatility 25 (V25), Volatility 50 (V50), Volatility 75 (V75), Volatility 100 (V100), and Volatility 300 (V300). Each index represents different levels of market volatility.
he best volatility index to trade depends on your trading experience, risk tolerance, and strategy. Beginners might prefer Volatility 10 (V10) or Volatility 25 (V25) for their lower risk, while experienced traders may opt for Volatility 75 (V75) or Volatility 100 (V100) for higher potential returns.
Trading volatility indices involves risks similar to other forms of trading, such as market risk, liquidity risk, and leverage risk. High-volatility indices carry higher risk due to larger price fluctuations.
Common strategies include trend following, scalping, and hedging. The choice of strategy depends on your risk appetite and market analysis.
Risk management techniques include setting stop-loss and take-profit orders, diversifying your portfolio, and using appropriate leverage levels. It's also important to have a solid trading plan and stick to it.
