Unique indices called synthetic indices imitate actual market activity, but they have a catch: real-world events have no bearing on them. These indices are free of market and liquidity hazards, have constant volatility, and are based on a cryptographically safe random number generator. They are different types of synthetic indices which 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. There is also an automated trading option that you may use to trade options given by the broker that you can customize to fit your approach. All of them are computer generated, therefore they operate round-the-clock, every day of the week. They never close, they never consolidate, and they never run out of price action. They are perpetual motion machines, and if one could successfully and consistently harness that motion, it could be worthwhile to investigate.
Below are some of the best synthetic indices brokers in the market today.
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. Access to 15 distinct indexes from numerous markets is available through eToro. This includes the China 50 and Hong Kong 50, both of which are excellent ways to learn about the Asian economies. This site now supports the EURO STOXX 50, an index that measures 50 large-cap firms from the European Union. Other indices supported on the site include Volatility indices, Crash and Boom indices, and daily reset indices. These indices have low spreads, often averaging 0.75 pips.
Other than synthetic indices eToro offers other trading assets such as crypto, currencies, stocks and commodities. Traders trade these assets on the revolutionary eToro platform that comes with the CopyTrader technology.
79% 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 is another reputable and well-regulated broker by Cyprus Securities and Exchange Commission. AvaTrade allows clients to trade on more than 30 indices from the US, Europe, and other regions. Synthetic Indices are also available on Avatrade including those for gaming esports, the Dollar Index, FAANG, and the Cannabis Index. The MT5 platform enables the trading of a large number of these.
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 in forex, commodities, stocks, ETFs, bonds and cryptocurrencies, not only indices.
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. This is best suited for clients lacking the experience and time to trade financial markets.
71% of retail CFD accounts lose money
FP Markets is an international organization regulated by the Cyprus Securities and Exchange Commission (CySEC). FP Markets has over 10,000 tradeable products, including forex, stocks, commodities, indices, and cryptocurrencies. Through index CFDs, FP Markets offers exposure to the main global stock indexes on top-notch trading platforms. Some of the synthetic indices available include volatility indices, Crash and Boom indices and daily reset indices. FP Markets offers more than a dozen CFD indexes from countries including the US, UK, Australia, and Europe. AUS200 cash indices can be traded for AU$ 1 per point.
There are two main accounts on FP Markets, the Standard account and the Raw account. The Standard account allows clients to trade on spreads as low as 1.0 pips 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 three main trading platforms. These include MetaTrader 4, MetaTrader 5, and WebTrader. All these platforms are excellent and accommodate traders on all kinds of devices.
75.3% of retail CFD accounts lose money
OANDA Corporation is a Forex Dealer Member (FDM) of the National Futures Association and a Retail Foreign Exchange Dealer (RFED) with the U.S. Commodity Futures Trading Commission (CFTC). This is one of the best forex brokers in the USA. It is also one of the best brokers in the UK, with regulations from the Financial Conduct Authority (FCA). OANDA offers forex, metals, commodities, bonds and indices as trading instruments.
Clients can trade indices as CFDs on OANDA. They can take a stake in the UK 100 at 1 point and in Germany 30 at 1.1 points. The broker offers 16 different indexes that can be traded including synthetic indices like volatility index and daily reset indices. Major indices from the US, Australia, Singapore, Hong Kong, and Europe are available to trade on OANDA. OANDA spreads on indices begin at 0.6 pip 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.
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 several trading assets such as Trade Forex, Individual 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.
More than 13 indices are offered as CFDs at XM, both in the spot and futures markets including synthetic indices offered such as Crash and Boom indices which are offered on the MetaTrader 5. The spread, which starts at 0.4 pip on the spot market and 0.8 pip on the futures market, is the major cost charged by this broker. XM cash index CFDs are adjusted for interest and dividends to match the underlying index’s cash price. CFDs for index futures have an expiration date and are settled in cash on that day.
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 Volatility indices, Crash and Boom, and jump indices. Spreads on XTB can start from 0.3 pip, making it one of the lowest spreads brokers in the market.
The trading platform that XTB offers to traders gives it a good reputation. Clients have access to the xTrader 5 platform that is built by XTB itself. This is an intuitive platform with fast execution times. Hence, it is suitable for all kinds of traders, whether experienced or inexperienced.
81% of retail investor accounts lose money when trading CFDs with this provider.
Exness is authorized and regulated by the Cyprus Securities and Exchange Commission (CySEC) and Financial Conduct Authority (FCA). Exness has a wide range of trading instruments including CFDs on forex, metals, crypto, energies, stocks, and indices. Synthetic indices are traded as CFDs and Exness. An example is volatility indices which can only be traded on the MetaTrader 5 platform. The FTSE 100, S&P 500, Dow Jones Industrial Average and many other popular indices in the world are available to trade on Exness. Spreads on the platform are floating, which means traders must stay updated on the spreads before they place trades.
There are three main trading platforms offered by Exness to its clients. These include the Exness Trader, the MetaTrader 4, and the MetaTrader 5. These are some of the best trading platforms in the industry. They allow clients to place orders within mere seconds.
Pepperstone is one of the top brokers for volatility index products in general. It offers trading opportunities for more than 800 CFD instruments across forex, indices, equities, energy, and commodities, among others. These trading opportunities are available on three robust, free platforms: cTrader, 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 volatility indices and other significant indexes from the UK, US, and Europe. The platform provides traders with a spread betting service where indices can be traded without paying any additional commission fees. The spread for trading indices at Pepperstone is based on the time and the index being traded.
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 Volatility indices and Crash and Boom indices, can be traded through the trading platforms MT4, Axi Psyquation, and AxiOne. At Axi, spreads on indices begin at 0.2 pip, and there are no further commissions.
IC Markets is registered in Cyprus, authorized and regulated by the Cyprus Securities and Exchange Commission. Clients can trade currencies, stocks, and CFDs on commodities, futures, bonds, and digital assets using IC Markets. These products are available on three main platforms. These include the cTrader, MetaTrader 4, and MetaTrader 5. More than 20 indices are available for trading on IC Markets (CFDs). IC Markers also offers synthetic indices for example volatility indices and Crash 500 Index. The Standard account has no commissions, but its liquidity providers apply a markup to the spread of 1 pip above the interbank rate. Comparing this fee to other brokers who offer volatility indices, it is competitive.
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.