Comprehensive Guide To Jump Indices Trading (2024)
- Learn how to trade jump indices from Deriv which are popular worldwide
- Get to know the best jump indices brokers
- Learn about profitable strategies that you can use in jump indices trading
What Are Jump Indices From Deriv?
Deriv's jump indices are designed to mimic markets with constant volatilities of 10%, 25%, 50%, 75%, and 100%. These synthetic indices exhibit equal probabilities for upward or downward jumps approximately every 20 minutes, with the average jump size being around 30 times the normal price movement.
What Are The Types Of Jump Indices Offered By Deriv?
There are 5 jump indices namely;
- Jump 10 Index
- Jump 25 Index
- Jump 50 Index
- Jump 75 Index
- Jump 100 index
.
What Do The Numbers On The Jump Indices Represent?
The numbers on the jump indices represent the volatility level of each index. For example, Jump 10 indicates a 10% volatility, Jump 25 indicates a 25% volatility, and so on up to Jump 100, which indicates 100% volatility.
These percentages reflect the consistency and magnitude of price movements within each index.
This means that the jump 10 index is the least volatile and the jump 100 index is the most volatile.
Which Broker Offers Jump Indices?
Deriv is the only jump indices broker. This is because Deriv created the algorithm that controls the movement of the jump index. No other broker has access to this algorithm.
In other words, Deriv is the only:
- Jump 10 index broker
- Jump 25 index broker
- Jump 50 index broker
- Jump 75 index broker
- Jump 100 index broker
Jump Indices Minimum Lot Sizes
Lot sizes determine the trade size you can place. Below are the minimum jump indices lot sizes.
Jump Index |
Smallest lot size |
| jump 10 Index | 0.01 |
| Jump 25 Index | 0.01 |
| Jump 50 Index | 0.01 |
| Jump 75 Index | 0.01 |
| Jump 100 Index | 0.01 |
Jump Indices Minimum Deposit & Margin Requirements
You can deposit as little as $1 to your synthetic indices account. However, you will not be able to trade Jump indices with such a low account balance.
The margin requirements and the minimum lot sizes needed will not allow you to place trades with such a low balance.
Below are the margin requirements and the minimum account deposit needed to trade the different Jump indices.
| Jump Index | Margin requirements minimum lot size | Minimum advisable account balance required |
| Jump 10 Index | $ 0.39 | $5 |
| Jump 25 Index | $ 0.64 | $7 |
| Jump 50 Index | $ 0.62 | $7 |
| Jump 75 Index | $ 0.34 | $5 |
| Jump 100 Index | $ 0.06 | $5 |
How To Open an Account
Opening a synthetic indices trading account for trading Jump indices 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 synthetic indices. Access the trading platform, select your preferred synthetic index, and begin trading.
You can get step by step instructions on how to open a synthetic indices account here.
Pros of Trading Jump Indices:
- High Volatility: Offers potential for significant profits due to frequent and large price movements.
- 24/7 Availability: Can be traded any time, providing flexibility.
- Predictable Patterns: Simulated volatility ensures consistent trading conditions.
- Equal Probability: Balanced chance of upward and downward movements.
Cons of Trading Jump Indices:
- High Risk: Large price jumps can lead to substantial losses.
- Requires Skill: Effective trading demands understanding of market patterns and risk management.
- Risk of overtrading: 24/7 availability can lead to overtrading and increased risk taking
- No Real Market Connection: Being synthetic, they may not reflect actual market conditions.
Developing a Jump Index Trading Strategy
Here are some key elements to consider when formulating your Jump Index trading strategy:
- Technical Analysis: Mastering technical indicators like Bollinger Bands, RSI, and MACD can help identify potential entry and exit points.
- Risk Management: Employing stop-loss orders is crucial to limit potential losses in the event of an unexpected price movement.
- Start Small: Begin with a small investment amount, especially when starting. This allows you to develop your skills and gain experience without risking significant capital.
- Demo Account: Deriv's demo account lets you experiment with Jump Indices and refine your strategy without risking real money.
Frequently Asked Questions On Trading Jump Indices
What are Jump Indices?
Jump Indices are synthetic instruments offered by Deriv that simulate volatile price movements. They don't track underlying assets but rather offer random price jumps in either direction at regular intervals.
What are the different Jump Indices offered?
Deriv offers five Jump Indices: Jump 10, 25, 50, 75, and 100. The numbers represent the theoretical average percentage price movement over a specific timeframe.
