Best Synthetic Indices Brokers

Unique indices called synthetic indices simulate real market activity but with a key difference: real-world events have no impact on them. These indices are free from market and liquidity risks, feature constant volatility, and are generated by a cryptographically secure random number generator. Types of synthetic indices include volatility indices, crash and boom indices, step indices, range break indices, daily reset indices, and jump indices.

The Volatility 75 index, often known as the Vix 75, is the most actively traded synthetic index. The VIX, or Volatility Index, is a real-time market index that measures the expected volatility in the U.S. stock market over the next 30 days. Often referred to as the "fear gauge," the VIX is derived from the prices of S&P 500 options, reflecting investor sentiment and uncertainty in the market. High VIX values indicate increased market volatility and investor concern, while low values suggest a stable or bullish market outlook.

Below are some of the best synthetic indices brokers in the market today.

Pepperstone

Pepperstone is one of the top brokers for volatility index products in general. It offers trading opportunities for more than 1,200  instruments across forex, indices, equities, energy, and commodities markets. These trading opportunities are available on four robust, free platforms: cTrader, TradingView, MetaTrader 4, and MetaTrader 5. It is authorized and regulated by the Cyprus Securities and Exchange Commission (CySEC), and Financial Conduct Authority (FCA).

There are more than 20 CFD indices available on Pepperstone including the volatility index VIX and other significant indexes from the UK, US, and Europe. Pepperstone offers a 99.62% fill rate with average execution speeds of either 30ms or 60ms, depending on the branch you trade with, making it one of the fastest retail forex brokers in the world.

76.3% of retail CFD accounts lose money

FP Markets

FP Markets is an international organization regulated by the Cyprus Securities and Exchange Commission (CySEC). FP Markets has over 10,000 tradeable products from various asset markets like the forex, stocks, commodities, indices, and cryptocurrencies. Through index CFDs, FP Markets offers exposure to the main global stock indexes on top-notch trading platforms. Regarding synthetic indices, FP Markets features CFDs on the VIX index (VIX Index Cash vs US Dollar Future) with as low spreads as 0.15. FP Markets also offers more than a dozen CFD indexes from countries including the US, UK, Australia, and Europe.

There are two main accounts on FP Markets, the Standard account and the Raw account. The Standard account allows clients to trade with spreads as low as 1.0 pips on major currencies with no commissions. On the other hand, the Raw account features spreads as low as 0.0 pips and a commission of $3 per side per lot. Hence, FP Markets accommodates all kinds of traders. Clients have a choice between four main trading platforms. These include MetaTrader 4, MetaTrader 5, TradingView and cTrader. Each of these platforms excels in compatibility and user experience, ensuring access for traders on any device.

72.92% of retail CFD accounts lose money

XM

Trading Point of Financial Instruments Ltd, founded in 2009 and governed by the Cyprus Securities and Exchange Commission, owns and operates XM. Additionally, XM is regulated by the ASIC and the FSC. XM offers trading assets across multiple markets, including forex, stocks, commodities, precious metals, energies, and equity indices. These are some of the features that attracted over 5 million users to XM, making it one of the largest forex brokers in the world.

XM offers over 13 indices as CFDs in both spot and futures markets, including synthetic indices like the VIX index, available on MetaTrader 5.  The spread on the VIX, Volatility Index Futures (S&P500) starts at 0.08. 

74.12% of retail investor accounts lose money when trading CFDs with this provider.

XTB

XTB is a well-known and regulated broker by the Cyprus Securities and Exchange Commission and the Financial Conduct Authority. This broker offers nearly 2,000 CFDs on Forex, indices, commodities, cryptocurrencies, stocks, and ETFs. Clients have access to 35 different indexes globally. These include significant indexes from the US, Australia, and EU member states and some synthetic indices such as the volatility index VIX. The VIX spreads can be as low as 0.1.

XTB has built a strong reputation and has attracted over 1 million clients with its proprietary xStation platform, offering traders an intuitive experience with fast execution times, making it suitable for traders of all types. 

74-76% of retail investor accounts lose money when trading CFDs with this provider.

eToro

One of the most well-known brokers in the market, especially regarding social and copy trading, is eToro. eToro (Europe) Ltd. is authorized and subject to regulation by the Cyprus Securities Exchange Commission (CySEC) and It is also regulated by the Financial Conduct Authority (FCA). It is further regulated by the Australian Securities & Investments Commission (ASIC) for the provision of financial services and products, and the Financial Services Authority Seychelles (FSAS) for the provision of broker-dealer services.

The minimal deposit amount varies between $10 and $200 depending on the nation of residence. eToro does not charge commissions on any trades, and its spreads on the S&P 500 often average 0.75 pips. This is regarded as cheap when compared to those offered by other international trading brokers. eToro provides access to 15 distinct indices through CFDs across various markets. This includes the China 50, Hong Kong 50, and the EURO STOXX 50, which measures 50 large-cap firms from the European Union. The platform also supports volatility indices, such as the VIX.

Other than synthetic indices eToro offers other trading assets such as stocks, CFDs on forex, cryptocurrencies, stocks, currencies and commodities. Traders trade these assets on the revolutionary eToro platform that comes with the CopyTrader technology.

51% of retail CFD accounts lose money

eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs (such as forex, commodities and stocks).

AvaTrade

AvaTrade is another reputable and well-regulated broker by the Cyprus Securities and Exchange Commission. AvaTrade allows clients to trade on more than 30 indices from the US, Europe, and other regions via CFDs. One synthetic Index is available on Avatrade - the VIX (MT4 Symbol: VXXB).

At AvaTrade, spreads for trading VIX range from 0.15% to 0.21%. There is only one account type offered to retail traders at AvaTrade, and trading costs for the Volatility 75 Index are industry standard. AvaTrade spreads on the US500 begin at a fixed 0.25%. AvaTrade offers online trading on various CFDs such as forex, commodities, stocks, ETFs, bonds and cryptocurrencies.

On AvaTrade, clients have access to top-notch trading platforms, MetaTrader 4 and MetaTrader 5. They also have access to AvaTrade’s suite of platforms, AvaTradeGO, AvaOptions, DupliTrade and ZuluTrade. DupliTrade and ZuluTrade allow clients to copy the trades of top-performing traders automatically. 

76% of retail CFD accounts lose money

Axi

Axi is a global broker that provides trading brokerage for CFDs on forex, cryptocurrencies, gold, shares, and other commodities. It is regulated by the Australian Securities & Investments Commission (ASIC), AFSL number 318232. With Axi, traders have access to more than 15 global indexes, including those from Europe, Asia, and Australia. There are index futures CFDs as well as index cash CFDs available. These assets, including the volatility index VIX, can be traded through the trading platforms MT4, Axi Psyquation, and AxiOne. At Axi, spreads on indices begin at 0.2, and there are no further commissions.

OANDA

OANDA is another popular forex and CFD broker where clients from a wide range of countries can trade indices as CFDs (not permitted in the US). The broker offers 16 different indexes that can be traded including synthetic indices like the volatility index VIX. Major indices from the US, Australia, Singapore, Hong Kong, and Europe are available to trade on OANDA via CFDs. OANDA spreads on indices begin at 0.6 on the S&P 500. However, individuals registered in the OANDA Advanced Trader Program receive additional perks, including lower spreads based on tier. This covers indicators and other assets.

The minimum balance for the first tier is $10,000, and the minimum monthly trade volume is $10 million. The minimum balance for the fourth tier is above $250,000, and the minimum monthly trade volume is over $500 million. The fourth tier offers a $15 rebate or commission cut for every million dollars earned.

Trading services on OANDA are delivered through state-of-the-art platforms, including the fxTrade app, MetaTrader 4, and MetaTrader 5. The MetaTrader platforms come with great charting tools to support traders in their activities. On the other hand, the fxTrade app is OANDA’s premier mobile app that works with MetaTrader 4 and MetaTrader 5.

Final thoughts

If you trade synthetic indices correctly, it is possible to make significant profits. Nonetheless, this market is just as dangerous as all other financial markets. You must be aware of the hazards involved and keep an eye out for them to avoid losing your hard-earned money. Moreover, CFDs trading carries a lot of risks. Over 70% of investors end up losing their funds. Consider all the risks involved before putting your money on the line.

One key factor in the current market for synthetic indices brokers is to make a careful selection of the broker. The number of indices offered, the brokers' general reputation for reliability, the fees associated, and the regulatory status of a broker should all be taken into account when selecting the best synthetic brokers. Here, we presented some brokers that met our criteria for the best synthetic indices brokers. Note that this is our own criteria and this is not an exhaustive list. Some of these brokers might not satisfy your trading needs. We encourage you to do your own research before you invest. The brokers on this list are a good place to start with your research.