Brokers With Synthetic Indices

Brokers with synthetic indices provide unique trading opportunities on products that emulate realistic market movements. Unlike a traditional index, a synthetic index often has no correlation to underlying assets and is not impacted by real events. This tutorial explains how trading synthetic indices work, alongside their pros and cons. Our team also list the best synthetic indices brokers.

The leader in synthetic indices is undisputedly Deriv, with multiple proprietary indices that can’t be found elsewhere. However, they don’t accept traders from a long list of countries, including the US, Canada, UK and several others. The list of brokers with synthetic indices below will only show those that accept your location.

Best Synthetic Index Brokers 2024

We tested multiple brokers and found that these 10 platforms offer the best synthetic index trading products:

Click a broker for details
  1. 1
    AvaTrade

    Ratings
    4.8 / 5
    4.3 / 5
    4.5 / 5
    3.8 / 5
    4.3 / 5
    4.3 / 5
    4.3 / 5
    4.5 / 5
    4.3 / 5
    4 / 5

    0.01 Lots
    1:30 (Retail) 1:400 (Pro)
    ASIC, CySEC, FSCA, ISA, CBI, FSA, FSRA, BVI, ADGM
    CFDs, Forex, Stocks, Indices, Commodities, ETFs, Bonds, Crypto, Spread Betting, Futures
    WebTrader, AvaTradeGO, AvaOptions, AvaFutures, MT4, MT5, AlgoTrader, TradingCentral, DupliTrade
    Skrill, Wire Transfer, FasaPay, Mastercard, Perfect Money, Swift, MoneyGram, Credit Card, WebMoney, JCB Card, Debit Card, Neteller, Boleto
    USD, EUR, GBP, CAD, AUD
  2. 2
    Deriv.com

    Ratings
    3.5 / 5
    4.5 / 5
    4.5 / 5
    4 / 5
    4 / 5
    4.1 / 5
    2.5 / 5
    3 / 5
    4.2 / 5
    4.5 / 5

    $5
    0.01 Lots
    1:1000
    MFSA, LFSA, VFSC, BFSC
    CFDs, Multipliers, Forex, Stocks, Indices, Commodities
    Deriv Trader, MT5
    Neteller, Visa, Skrill, WebMoney, FasaPay, Perfect Money, Diners Club, Banxa, Paytrust, Wire Transfer, Mastercard, Credit Card, JCB Card, Sticpay, Trustly, Volet, Paysafecard, AstroPay, Maestro, Airtm, Boleto, JetonCash
    USD, EUR, GBP, AUD
  3. 3
    Pepperstone
    CFDs and FX are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs.

    Ratings
    4.6 / 5
    4 / 5
    3.8 / 5
    4.4 / 5
    4.4 / 5
    4.6 / 5
    4.3 / 5
    4 / 5
    4.4 / 5
    4.1 / 5

    $0
    0.01 Lots
    1:30 (Retail), 1:500 (Pro)
    FCA, ASIC, CySEC, DFSA, CMA, BaFin, SCB
    CFDs, Forex, Currency Indices, Stocks, Indices, Commodities, ETFs, Crypto, Spread Betting
    MT4, MT5, cTrader, TradingView, AutoChartist, DupliTrade
    Visa, Mastercard, Credit Card, Debit Card, PayPal, Wire Transfer, POLi, UnionPay, BPAY, Neteller, Skrill
    USD, EUR, GBP, CAD, AUD, NZD, JPY, CHF, HKD, SGD
  4. 4
    XM

    Ratings
    4.3 / 5
    4.5 / 5
    4.3 / 5
    4.3 / 5
    4 / 5
    4.5 / 5
    4.5 / 5
    4.5 / 5
    4.7 / 5
    3.9 / 5

    $5
    0.01 Lots
    ASIC, CySEC, DFSA, FSC, FSCA
    Forex, Stock CFDs, Turbo Stocks, Indices, Commodities, Precious Metals, Energies, Shares, Crypto, Futures
    MT4, MT5
    Credit Card, Debit Card, Skrill, Neteller, Wire Transfer, Perfect Money, Apple Pay, Google Wallet, TransferWise, Visa, M-Pesa
    USD, EUR, GBP, AUD, JPY, ZAR, CHF, SGD, PLN, HUF
  5. 5
    IC Markets

    Ratings
    4.6 / 5
    4 / 5
    3.5 / 5
    4.6 / 5
    4 / 5
    4.5 / 5
    4 / 5
    3.5 / 5
    3.1 / 5
    4.2 / 5

    $200
    0.01 Lots
    1:30 (ASIC & CySEC), 1:500 (FSA), 1:1000 (Global)
    ASIC, CySEC, FSA
    CFDs, Forex, Stocks, Indices, Commodities, Bonds, Futures, Crypto
    MT4, MT5, cTrader, TradingView, TradingCentral, DupliTrade
    PayPal, Skrill, Neteller, Visa, UnionPay, Wire Transfer, Rapid Transfer, Mastercard, POLi, BPAY, Credit Card, Klarna, Swift, SafeCharge
    USD, EUR, GBP, CAD, AUD, NZD, JPY, CHF, HKD, SGD
  6. 6
    Eightcap

    Ratings
    4.3 / 5
    4 / 5
    3.6 / 5
    3.8 / 5
    4.3 / 5
    4 / 5
    3.5 / 5
    3 / 5
    4.8 / 5
    4.4 / 5

    $100
    0.01 Lots
    ASIC, FCA, CySEC, SCB
    CFDs, Forex, Stocks, Indices, Commodities
    MT4, MT5, TradingView
    Neteller, Skrill, Visa, UnionPay, Credit Card, Debit Card, Bitcoin Payments, Wire Transfer, FasaPay, BPAY, PayPal, Dragonpay, PIX Payment
    USD, EUR, GBP, CAD, AUD, NZD, SGD
  7. 7
    CityIndex

    $0
    0.01 Lots
    1:30 (Retail), 1:50 (Accredited Investor), 1:200 (Sophisticated Investor), 1:300 (Wholesale Investor), 1:400 (Professional Trader). Varies with jurisdiction.
    ASIC, FCA, MAS
    CFDs, Forex, Stocks, Cryptos, Options, Commodities, Bonds
    MT4, TradingView, TradingCentral
    PayNow, Wire Transfer, Mastercard, BPAY, Credit Card, PayID, Debit Card, Visa, PayPal
    USD, EUR, GBP, AUD, CZK
  8. 8
    DNA Markets

    Ratings
    3 / 5
    4 / 5
    4 / 5
    3.9 / 5
    3.5 / 5
    3.6 / 5
    1.8 / 5
    1.6 / 5
    4.8 / 5
    4.4 / 5

    $100
    0.01 Lots
    ASIC
    CFDs, Forex, Indices, Commodities, Stocks, Crypto
    MT4, MT5
    Credit Card, Debit Card, Wire Transfer, BPAY, Skrill, Neteller, Bitcoin Payments, Bitwallet, AstroPay, Mastercard
    USD, EUR, GBP, CAD, AUD, NZD, SGD
  9. 9
    eToro

    Ratings
    4.8 / 5
    4 / 5
    4.5 / 5
    3 / 5
    4 / 5
    3.5 / 5
    4.5 / 5
    4.5 / 5
    4.8 / 5
    4 / 5

    $50
    $10
    FCA, ASIC, CySEC, FSA, FSRA, MFSA
    CFDs, Forex, Stocks, ETFs, Cryptos, Futures, Commodities, Bonds
    eToro Web, CopyTrader, TradingCentral
    Visa, Skrill, Neteller, Wire Transfer, Rapid Transfer, Swift, Debit Card, iDeal, Klarna, Sofort, PayPal, Trustly, Przelewy24
    USD
  10. 10
    InstaForex

    Ratings
    4 / 5
    3.9 / 5
    4.2 / 5
    4 / 5
    3.9 / 5
    3.7 / 5
    3.5 / 5
    3.6 / 5
    3.6 / 5
    3.6 / 5

    CFDs, Forex, Stocks, ETFs, Cryptos, Futures, Commodities
    MT4, MT5
    Skrill, Mastercard, Visa, Neteller, Wire Transfer, Przelewy24, Giropay, Rapid Transfer
    USD, EUR, GBP, PLN, CZK

Here is a summary of why we recommend these brokers:

  1. AvaTrade - AvaTrade is a leading forex and CFD broker, established in 2006 and regulated across 9 jurisdictions. Over 400,000 users have signed up with the broker which processes over 2 million trades each month. The firm offers multiple trading platforms, including MT4, MT5, and a proprietary WebTrader. 1250+ financial instruments are available for day trading, from CFDs to AvaOptions and now AvaFutures, alongside a comprehensive education center and multilingual customer support.
  2. Deriv.com - Deriv.com is a low cost, multi-asset broker with over 2.5 million global clients. With just a $5 minimum deposit, the firm offers CFDs, multipliers and more recently accumulators, alongside proprietary synthetic products which can't be found elsewhere. Deriv provides both its own in-house charting software and the hugely popular MetaTrader 5.
  3. Pepperstone - Established in Australia in 2010, Pepperstone is a top-rated forex and CFD broker with over 400,000 clients worldwide. It offers access to 1,300+ instruments on leading platforms MT4, MT5, cTrader and TradingView, maintaining low, transparent fees. Pepperstone is also regulated by trusted authorities like the FCA, ASIC, and CySEC, ensuring a secure environment for day traders at all levels.
  4. XM - XM is a globally recognized forex and CFD broker with 10+ million clients in 190+ countries. Since 2009, this trusted broker has been known for its low fees on 1000+ instruments. XM is regulated by multiple financial bodies, including the ASIC and CySEC.
  5. IC Markets - IC Markets is a globally recognized forex and CFD broker known for its excellent pricing, comprehensive range of trading instruments, and premium trading technology. Founded in 2007 and headquartered in Australia, the brokerage is regulated by the ASIC, CySEC and FSA, and has attracted more than 180,000 clients from over 200 countries.
  6. Eightcap -
  7. CityIndex - City Index is an established and award-winning forex, CFD and spread betting broker with top-tier global regulation, including in the UK (FCA) and Australia (ASIC). With 30+ years in the industry, 13,500+ instruments and 24/5 customer support, City Index is a solid pick for aspiring traders.
  8. DNA Markets - DNA Markets is a forex and CFD broker established in 2020. The broker operates two entities in Australia and the offshore jurisdiction, St Vincent and the Grenadines. Traders can access 800+ markets, with a Standard account for beginners and a Raw account for experienced traders. The reliable MetaTrader 4 and MetaTrader 5 platforms are available, alongside Signal Start.
  9. eToro - eToro is a top-rated multi-asset platform which offers trading services in thousands of CFDs, stocks and cryptoassets. Launched in 2007, the brand has millions of active traders globally and is authorized by tier one regulators, including the FCA and CySEC. The brand is particularly popular for its comprehensive social trading platform. Cryptoasset investing is highly volatile and unregulated in the UK and some EU countries. No consumer protection. Tax on profits may apply. 76% of retail accounts lose money.
  10. InstaForex - InstaForex is a forex and CFD broker founded in . The broker offers diverse market coverage to millions of clients, spanning traditional assets like currencies and shares, as well as other interesting opportunities such as IPOs.

Brokers With Synthetic Indices Comparison

Brokers With Synthetic Indices Comparison
Broker Minimum Deposit Minimum Trade Platforms Regulator
AvaTrade logo - 0.01 Lots WebTrader, AvaTradeGO, AvaOptions, AvaFutures, MT4, MT5, AlgoTrader, TradingCentral, DupliTrade ASIC, CySEC, FSCA, ISA, CBI, FSA, FSRA, BVI, ADGM
Deriv.com logo $5 0.01 Lots Deriv Trader, MT5 MFSA, LFSA, VFSC, BFSC
Pepperstone logo $0 0.01 Lots MT4, MT5, cTrader, TradingView, AutoChartist, DupliTrade FCA, ASIC, CySEC, DFSA, CMA, BaFin, SCB
XM logo $5 0.01 Lots MT4, MT5 ASIC, CySEC, DFSA, FSC, FSCA
IC Markets logo $200 0.01 Lots MT4, MT5, cTrader, TradingView, TradingCentral, DupliTrade ASIC, CySEC, FSA
Eightcap logo $100 0.01 Lots MT4, MT5, TradingView ASIC, FCA, CySEC, SCB
CityIndex logo $0 0.01 Lots MT4, TradingView, TradingCentral ASIC, FCA, MAS
DNA Markets logo $100 0.01 Lots MT4, MT5 ASIC
eToro logo $50 $10 eToro Web, CopyTrader, TradingCentral FCA, ASIC, CySEC, FSA, FSRA, MFSA
InstaForex logo - - MT4, MT5 -

AvaTrade

"AvaTrade offers the full package for short-term traders. There is powerful charting software, reliable execution, transparent fees, and fast account opening with a low minimum deposit."

Rebecca Holden, Reviewer

AvaTrade Quick Facts

Demo AccountYes
InstrumentsCFDs, Forex, Stocks, Indices, Commodities, ETFs, Bonds, Crypto, Spread Betting, Futures
RegulatorASIC, CySEC, FSCA, ISA, CBI, FSA, FSRA, BVI, ADGM
PlatformsWebTrader, AvaTradeGO, AvaOptions, AvaFutures, MT4, MT5, AlgoTrader, TradingCentral, DupliTrade
Minimum Trade0.01 Lots
Leverage1:30 (Retail) 1:400 (Pro)
Account CurrenciesUSD, EUR, GBP, CAD, AUD

Pros

  • WebTrader is well-suited to beginners and features a strong suite of technical analysis tools and market research for day traders
  • AvaTrade is a heavily regulated and trustworthy broker with licenses from the ASIC, CySEC and more
  • Day traders can access stable spreads and zero commissions with no hidden fees

Cons

  • Traders from the US are not accepted
  • There is no ECN account with raw spreads
  • It’s a shame that there are no rebate schemes for serious traders looking for additional perks - CMC Markets would be a better choice here

Deriv.com

"Deriv.com will suit day traders looking to make fast-paced trades using CFDs and multipliers with high leverage up to 1:1000. The broker is also the industry leader in synthetic indices, which simulate real market movements and are available around the clock. "

Rebecca Holden, Reviewer

Deriv.com Quick Facts

Demo AccountYes
InstrumentsCFDs, Multipliers, Forex, Stocks, Indices, Commodities
RegulatorMFSA, LFSA, VFSC, BFSC
PlatformsDeriv Trader, MT5
Minimum Deposit$5
Minimum Trade0.01 Lots
Leverage1:1000
Account CurrenciesUSD, EUR, GBP, AUD

Pros

  • The low $5 minimum initial deposit suits those on a lower budget
  • There's a good range of fast deposit and withdrawal methods with zero payment fees and low minimum deposits
  • Beginners and experienced day traders can access a good range of 20+ technical indicators in Deriv Trader vs 30+ in MT5

Cons

  • There are limited copy trading tools and analysis features compared to alternatives like IQ Cent
  • The range of 100+ assets trails some competitors such as Quotex which offers 400+
  • There's no loyalty program or rebate scheme for high volume traders

Pepperstone

"Pepperstone stands out as a top choice for day trading, offering razor-sharp spreads, ultra-fast execution, and advanced charting platforms for experienced traders. New traders are also welcomed with no minimum deposit, extensive educational resources, and exceptional 24/7 support."

Christian Harris, Reviewer

Pepperstone Quick Facts

Demo AccountYes
InstrumentsCFDs, Forex, Currency Indices, Stocks, Indices, Commodities, ETFs, Crypto, Spread Betting
RegulatorFCA, ASIC, CySEC, DFSA, CMA, BaFin, SCB
PlatformsMT4, MT5, cTrader, TradingView, AutoChartist, DupliTrade
Minimum Deposit$0
Minimum Trade0.01 Lots
Leverage1:30 (Retail), 1:500 (Pro)
Account CurrenciesUSD, EUR, GBP, CAD, AUD, NZD, JPY, CHF, HKD, SGD

Pros

  • There’s support for a range of industry-leading charting platforms including MT4, MT5, TradingView, and cTrader, catering to various short-term trading styles, including algo trading.
  • Pepperstone boasts impressive execution speeds, averaging around 30ms, facilitating fast order processing and execution that’s ideal for day trading.
  • Pepperstone emerges as a low-cost broker, especially for serious day traders with spreads from 0.0 in the Razor account and rebates of 25%+ through the Active Trader program.

Cons

  • Despite enhancements to its range of markets, crypto offerings are relatively limited compared to other brokers such as eToro, with no option to invest in real coins.
  • There’s no simplified proprietary trading platform, nor are there any social trading features, which could be a disadvantage if you are new to day trading.
  • Pepperstone’s demo accounts are active for only 30 days, which may not be not long enough to familiarize yourself with the different platforms and test trading strategies.

XM

"XM is one of the best forex and CFD brokers we have tested. The flexible account types will suit a variety of short-term trading styles while the $5 minimum deposit and smooth sign-up process make it easy to start trading."

Rebecca Holden, Reviewer

XM Quick Facts

Bonus Offer$30 No Deposit Bonus When You Register A Real Account
Demo AccountYes
InstrumentsForex, Stock CFDs, Turbo Stocks, Indices, Commodities, Precious Metals, Energies, Shares, Crypto, Futures
RegulatorASIC, CySEC, DFSA, FSC, FSCA
PlatformsMT4, MT5
Minimum Deposit$5
Minimum Trade0.01 Lots
Account CurrenciesUSD, EUR, GBP, AUD, JPY, ZAR, CHF, SGD, PLN, HUF

Pros

  • 1000+ instruments are available, including recently added thematic indices, providing exposure to emerging industries
  • Accessible trading accounts with a $5 minimum deposit and fast account opening
  • The broker offers premium research including market sentiment, fundamental insights and strategy builders

Cons

  • There is weak regulatory oversight through the global entity
  • There's $5 inactivity fee after only 3 months, though this won't affect active traders
  • PayPal deposits are not supported

IC Markets

"IC Markets offers superior pricing, exceptionally fast execution and seamless deposits. The introduction of advanced charting platforms, notably TradingView, and the Raw Trader Plus account, ensures it remains a top choice for intermediate to advanced day traders."

Christian Harris, Reviewer

IC Markets Quick Facts

Demo AccountYes
InstrumentsCFDs, Forex, Stocks, Indices, Commodities, Bonds, Futures, Crypto
RegulatorASIC, CySEC, FSA
PlatformsMT4, MT5, cTrader, TradingView, TradingCentral, DupliTrade
Minimum Deposit$200
Minimum Trade0.01 Lots
Leverage1:30 (ASIC & CySEC), 1:500 (FSA), 1:1000 (Global)
Account CurrenciesUSD, EUR, GBP, CAD, AUD, NZD, JPY, CHF, HKD, SGD

Pros

  • You have access to over 2,250 CFDs across various markets, including forex, commodities, indices, stocks, bonds, and cryptocurrencies, allowing for diversified trading strategies.
  • IC Markets offers among the tightest spreads in the industry, with 0.0-pip spreads on major currency pairs, making it especially cost-effective for day traders.
  • IC Markets offers fast and dependable 24/5 support based on firsthand experience, particularly when it comes to accounts and funding issues.

Cons

  • While IC Markets offers a selection of metals and cryptos for trading via CFDs, the range is not as extensive as brokers like eToro, limiting opportunities for traders interested in these asset classes.
  • Despite four industry-leading third-party platforms, there is no proprietary software or trading app built with new traders in mind.
  • Interest isn't paid on unused cash, an increasingly popular feature found at alternatives like Interactive Brokers.

Eightcap

"Eightcap delivers in every area for day traders with a growing selection of charting platforms and AI-powered tools. Now sporting 250+ crypto CFDs and the Crypto Crusher market scanner, it's also become a stand-out choice for crypto trading, winning our 'Best Crypto Broker' award two years in a row."

Christian Harris, Reviewer

Eightcap Quick Facts

Demo AccountYes
InstrumentsCFDs, Forex, Stocks, Indices, Commodities
RegulatorASIC, FCA, CySEC, SCB
PlatformsMT4, MT5, TradingView
Minimum Deposit$100
Minimum Trade0.01 Lots
Account CurrenciesUSD, EUR, GBP, CAD, AUD, NZD, SGD

Pros

  • After bolstering its roster in 2021, Eightcap offers one of the most extensive selections of cryptocurrency CFDs in the market, with crypto/fiat pairs, crypto/crypto pairs, plus crypto indices for broader exposure to the market.
  • With tight spreads from 0 pips, low commission fees, and high leverage up to 1:500 for certain clients, Eightcap provides cost-effective and flexible trading conditions that can accommodate an array of strategies, including day trading and scalping.
  • Having excelled across all key areas for day traders, Eightcap outperformed more than 490 competitors to win our 'Best Overall Broker' award for 2024, also securing our 'Best Crypto Broker' title.

Cons

  • Despite a useful library of educational guides and e-books, Eightcap still trails IG’s comprehensive toolkit for aspiring traders with its dedicated IG Academy app and 18 course categories.
  • In spite of an increasing variety of tools, Eightcap doesn't offer industry favorites like Autochartist or Trading Central, which offer cutting-edge charting analytics, live news, and market insights for short-term traders.
  • Eightcap needs to continue bolstering its suite of instruments to match category leaders like Blackbull Markets with its 26,000+ assets, featuring a particularly weak selection of commodities.

CityIndex

"City Index is best for new and intermediate traders looking for a wide selection of assets on user-friendly platforms."

Christian Harris, Reviewer

CityIndex Quick Facts

Demo AccountYes
InstrumentsCFDs, Forex, Stocks, Cryptos, Options, Commodities, Bonds
RegulatorASIC, FCA, MAS
PlatformsMT4, TradingView, TradingCentral
Minimum Deposit$0
Minimum Trade0.01 Lots
Leverage1:30 (Retail), 1:50 (Accredited Investor), 1:200 (Sophisticated Investor), 1:300 (Wholesale Investor), 1:400 (Professional Trader). Varies with jurisdiction.
Account CurrenciesUSD, EUR, GBP, AUD, CZK

Pros

  • Extended hours trading on 70+ popular shares including Amazon and Tesla
  • A free demo account with unrestricted access to all markets and trading tools
  • No minimum deposit to get started

Cons

  • US traders not accepted
  • Cryptocurrency trading not available in all locations
  • $15 monthly inactivity fee

DNA Markets

"DNA Markets is an excellent choice for short-term traders familiar with the MetaTrader platforms. The smooth sign-up process also makes it easy to get started while the $100 minimum deposit is accessible. That said, DNA Markets trails the top brokers in education, research and mobile trading. "

Jemma Grist, Reviewer

DNA Markets Quick Facts

Demo AccountYes
InstrumentsCFDs, Forex, Indices, Commodities, Stocks, Crypto
RegulatorASIC
PlatformsMT4, MT5
Minimum Deposit$100
Minimum Trade0.01 Lots
Account CurrenciesUSD, EUR, GBP, CAD, AUD, NZD, SGD

Pros

  • After a recent upgrade, there are now over 800 assets available to trade via CFDs, with a particularly impressive range of 120+ cryptos
  • The broker provides 24/5 customer support with response times of <2 minutes during testing
  • Short-term trading strategies are permitted including scalping and automated trading using Expert Advisors (EAs)

Cons

  • Unlike many alternatives, there are limited educational and research tools for traders seeking an all-in-one solution
  • Although it continues to strengthen its client base and reputation, DNA Markets lacks the track record of top brokers like Vantage
  • Despite access to MT4 and MT5, there is no proprietary trading app for seamless account management whilst on the go

eToro

"eToro's social trading platform leads the pack with a terrific user experience and active community chat that can help beginners find opportunities. There are also competitive fees on thousands of CFDs and real stocks, plus excellent rewards for experienced strategy providers."

Christian Harris, Reviewer

eToro Quick Facts

Demo AccountYes
InstrumentsCFDs, Forex, Stocks, ETFs, Cryptos, Futures, Commodities, Bonds
RegulatorFCA, ASIC, CySEC, FSA, FSRA, MFSA
PlatformseToro Web, CopyTrader, TradingCentral
Minimum Deposit$50
Minimum Trade$10
Account CurrenciesUSD

Pros

  • eToro is a world-renowned brand with top-tier global regulation and a 25M+ user community
  • Top copy traders can receive annual payments up to 1.5% of assets under copy in the broker's Popular Investor Program
  • The broker's services are great for beginners, with commission-free stock trading, a low minimum deposit and an unlimited demo

Cons

  • The lack of additional charting platforms like MT4 will reduce the appeal for seasoned day traders accustomed to using third-party software
  • There are no guaranteed stop loss orders which would be a useful risk management feature for beginners
  • There is a $30 minimum withdrawal amount and a $5 fee, which will affect novices with low capital

InstaForex

"InstaForex maintains its position as a top forex broker, with more currency products than most rivals. The tight spreads and low minimum deposits make it accessible to all experience levels, especially those familiar with the MT4 and MT5 platforms."

Christian Harris, Reviewer

InstaForex Quick Facts

Demo AccountYes
InstrumentsCFDs, Forex, Stocks, ETFs, Cryptos, Futures, Commodities
PlatformsMT4, MT5
Account CurrenciesUSD, EUR, GBP, PLN, CZK

Pros

  • InstaForex has a strong industry reputation, with a 14+ year history and serving millions of clients
  • There’s a decent range of free and fast payment methods including local bank transfers, bank cards and e-wallets
  • The broker is a particularly good pick for serious forex traders, with over 100 currency pairs, tight spreads from 0.0 pips and a market-leading selection of curated forex market resources

Cons

  • Market coverage and account conditions vary between entities.
  • The broker’s various entities are regulated different, traders must be aware which entity they are joining.
  • The broker’s website and client cabinet feel outdated and difficult to navigate for newcomers

What Is A Synthetic Index?

Synthetic index is a term used to describe an index that is not comprised of underlying assets, such as stocks, instead using random number generators to provide a value.

Synthetic indices typically take two forms: asset-based, tracking the value of a specific market or element of a market, or they can be simulated, based on computer-generated data entirely separate from any actual markets but designed to imitate real-life price movements.

Understanding these different products can be confusing due to the interchangeability of the synthetic index label. This can also make it difficult for traders to discover which brokers offer synthetic indices trading.

Here, we break down both types of synthetic indices, listing their differences, respective merits and supporting brokers.

Simulated Synthetic Indices

Commonly offered by forex brokers and binary options brokers, simulated synthetic indices use complex algorithms designed to mirror realistic price movements. In contrast to asset-based products, simulated synthetic indices are markets with no correlation to any underlying asset.

Simulated synthetic index brokers often provide traders with several options for their preferred trading vehicle and simulated market conditions. In addition, these markets can normally be traded 24/7.

However, some investors are understandably wary of these products due to the opacity of these over-the-counter products. Some traders believe that for these products to be viable, the algorithms must be broker-favored, and therefore abstain from these artificial markets.

Asset-Based Synthetic Indices

Asset-based synthetic indices track the value of specific market sectors or market values. Popular examples of asset-based synthetic indices are the S&P 500 Volatility Index (VIX) and the US Dollar Index (USDX).

With synthetic indices based on spot assets, such as currency indices or market sector instruments, many of these products are hedged with real assets by the firm that provides the index.

A combination of swaps, futures, options and spot assets can also be used to back more sophisticated synthetic indices, though some of these products may not be fully hedged due to their complexity.

This measure attempts to secure the values of synthetic indices, though collapses have happened in the past – more on this later.

Simulated Vs Asset-Based Synthetic Indices

To help you decide which type of synthetic index is best for your goals and trading style, we have compared simulated and asset-based indices across several key categories:

Trading Vehicles

Simulated

With simulated synthetic indices brokers, trading instruments are more limited, often via binary options or CFDs. There are fewer forex brokers with simulated synthetic indices, with products mainly offered by binary options brokers.

While these products are different in terms of leverage, fees and payouts, strategies are more limited than with asset-based synthetic indices. Binary options are typically traded in the short term by investors with an all-or-nothing strategy.

Asset-Based

With asset-based synthetic indices, traders can use a variety of trading vehicles. Synthetic index brokers may offer contracts for difference (CFDs), exchange-traded funds (ETFs), futures, and options.

This gives traders more choice, opening up possibilities in terms of strategies and timeframes. The variety of vehicles available to trade asset-based synthetic indices also offers traders both high and low leverage options.

Payouts & Risk

Simulated

Simulated synthetic indices are typically traded through binary options or CFDs, and their payouts and capital risks vary depending on the vehicle used.

Binary options offer fixed payouts for a winning trade, with the best brokers for synthetic indices offering payouts of over 95% for a correct prediction. Traders cannot lose more than they invest in a position.

While CFDs offer leveraged profit potential, they also carry significant risks, including the possibility of losing more than the initial investment.

When trading at synthetic indices brokers using CFDs, ensure that your chosen brokerage offers features like stop losses and negative balance protection.

Asset-Based

Due to the wide range of vehicles available when trading asset-based synthetic indices, investors can choose a trading strategy suited to their personal risk/reward tolerance.

Products range from the highly leveraged CFD market down to the more stable ETF setup.

Safety & Security

Simulated

Brokers with simulated synthetic indices are not typically regulated by top-tier financial authorities such as the SEC or FCA. Synthetic index binary options and forex brokers may not store client finds in tier-one banks or provide access to investor compensation schemes.

In addition, the opacity of simulated trading algorithms may not sit well with some investors. There is limited evidence to suggest that synthetic index brokers skew their algorithms to disadvantage investors, but with no real market to base prices on, the opportunity to manipulate simulated prices is arguably there.

Asset-Based

Asset-based synthetic indices are typically traded through regulated exchanges and brokers, which offer a higher level of security and transparency.

For example, the best brokers with synthetic indices brokers are regulated by the FCA, SEC, ASIC or CySEC. This regulatory oversight provides traders with some level of protection against fraud, market manipulation, and other forms of misconduct.

However, this does not mean that asset-based synthetic index investments are safe. On 5 February 2018, VIX futures rose from their opening level of 16 into the low 30s by the afternoon. This caused two synthetic indices that offered an inverse VIX tracker to fall by over 95% each, wiping out the funds of traders.

Due to the nature of synthetic indices, such losses are often difficult to reverse.

Trading Hours

Simulated

One of the unique advantages of brokers with synthetic indices is the ability to trade a market with infinite liquidity that operates 24/7.

Other than scheduled maintenance and platform downtimes, the algorithms for simulated synthetic indices run constantly, giving traders around the world an equal chance to trade.

Asset-Based

The operating hours for asset-based synthetic indices usually follow the trading hours of the underlying assets that make up the index.

The longest trading hours can often be found via forex brokers with synthetic indices or futures brokers, with trading available up to 11 hours per day. However, even these extended market instruments do not typically trade on weekends.

Trading Fees

The fees and commissions paid when trading synthetic indices are often dependent on the vehicle and broker rather than the type of index. There are also other types of charges to consider when choosing the best brokers for synthetic indices, which we will get into later on.

Traders can opt for low or zero-commission brokers to trade ETFs and there are no commission fees when speculating with most binary options brokers. The highest fees will come when trading through forex brokers with synthetic indices CFDs, plus futures and options.

Comparing Brokers With Synthetic Indices

The list of synthetic indices brokers includes several top brands. To help you find which broker offers the best synthetic indices trading conditions, look for the following qualities:

Vehicles

The first step when choosing a trading platform is to establish the type of synthetic index available.

Binary options and forex brokers can sometimes support both asset-based synthetic indices and simulated synthetic indices.

However, traditional stocks, futures and options brokers typically shy away from the less transparent natures of simulated synthetic indices.

Markets & Customization

The next item to compare is which broker offers the synthetic index markets you favor.

When trading simulated synthetic indices, the best brokers offer a range of different products set up with various algorithms simulating different market conditions.

For asset-based synthetic indices, this can mean finding brokers that support products from a range of financial markets, such as stocks and forex.

Brokers with synthetic indices trading - Deriv.com
Synthetic Indices On Deriv.com

Fees & Payouts

Simulated synthetic indices are often traded as binary options or “multipliers”, although some forex brokers allow CFD trading with simulated synthetic indices.

With binary options, there are no trading fees, with profits dictated by payouts. While investors should shop around for the most competitive payouts, ensure that you are not enticed into a suspect broker by high payouts alone.

CFD profits are similar from broker to broker. Spreads and charges such as commissions and swap fees make the difference between trading firms.

With asset-based synthetic indices, payouts will often depend on the trading product, which is largely independent of a specific broker. However, fees and commissions can significantly influence how much profit is made by a successful trader.

Look for low spreads and commissions when trading CFDs, and low or zero commissions for ETF and futures trading. This said, some brokers with synthetic indices can draw investors in with low trading fees and add account or deposit charges, so do your due diligence before signing up.

Regulation & Security

The safety of funds and sensitive personal information is key when trading any product.

To give yourself the best chance at staying safe, favor brokers with regulation from reputable bodies such as the US CFTC or UK FCA.

The best brokers for synthetic indices will also offer additional measures, such as two-factor authentication (2FA) and fund insurance schemes.

Trading Platforms

Choosing brokers with synthetic indices that support stable, reliable and user-friendly platforms is a must. Some synthetic indices brokers use proprietary solutions so make use of a demo account to trial these terminals before committing money.

Alternatively, opt for a popular and well-supported platform such as MetaTrader 4 (MT4) or MetaTrader 5 (MT5). These platforms offer advantages such as customizable indicators and automated trading tools.

Payments

Choose brokers with synthetic indices that offer low-cost, high-speed deposit options. Ideally, these solutions will include choices with some protection, such as PayPal or credit cards. In addition, native support for your local currency will help you avoid conversion fees.

In the CFD and binary options space, there are also some synthetic indices brokers with bonus schemes. But while deposit bonuses can be attractive, ensure you understand any withdrawal terms before opting in.

Final Word On Synthetic Indices Brokers

When comparing brokers with synthetic indices, there are several considerations to keep in mind. Firstly, traders should favor synthetic index brokers with oversight from reputable regulators. Other considerations include market availability, trading platform support, accepted payment methods and fees.

Get started with our list of the best brokers with synthetic indices.

FAQ

What Are Synthetic Indices?

Synthetic indices are trading products that typically derive their value from random number generators and complex algorithms. They are designed to reflect realistic market movements. Synthetic indices can often be traded 24/7 at the top brokers.

Which Broker Has Synthetic Indices?

Various online brokers offer synthetic indices trading. Among the best brokers that trade synthetic indices are Deriv and Spectre-ai. Alternatively, use our list of top-rated synthetic index brokers.

What Are Synthetic Indices In Forex?

Synthetic indices in forex can refer to either the CFD trading of synthetic indices or the specific subtype of synthetic index that track currencies.

Can I Trade Synthetic Indices On MT4 & MT5?

Yes, some brokers with synthetic indices offer trading on MetaTrader 4 (MT4) and MetaTrader 5 (MT5). Among the top trading firms are Pepperstone and CMC Markets.