Synthetic indicesUpdated 3 min readBy the FXNOD team
Volatility 75 Index: what it is and how it behaves
The Volatility 75 Index is a synthetic index from Deriv built to hold a constant volatility of 75%. Its price comes from a random number generator, it trades around the clock, and it ticks every two seconds, or every second on the (1s) version. It is among the more volatile of the volatility indices, so prices move further per tick.
What 75% volatility means
Volatility is quoted per year. As a rule of thumb, the typical move over a shorter period is the annual figure multiplied by the square root of that fraction of a year. For 75% that works out to roughly 4% in a day and about 0.1% in a minute. The figures are an illustration of scale from that rule, not a specification from Deriv.
| Index | Designed volatility | Typical daily move by the same rule |
|---|---|---|
| Volatility 10 | 10% | About 0.5% |
| Volatility 25 | 25% | About 1.3% |
| Volatility 50 | 50% | About 2.6% |
| Volatility 75 | 75% | About 3.9% |
| Volatility 100 | 100% | About 5.2% |
Why it is so popular
- Large moves make it attractive for leveraged CFD trading, where a move is magnified.
- It has been widely promoted in strategy videos, signal groups and paid courses.
- It is always open.
What that popularity hides
More volatility is not more opportunity. On a random index a bigger move is as likely to be against you as for you. With leverage, the distance to losing the whole position is shorter. With barrier options, a more volatile index makes touching a barrier more likely and the payout is adjusted to match. Nothing about the 75 makes it easier to profit from than the 10.
Predictions, signals and strategies
Searches for Volatility 75 predictions and strategy PDFs are common. Deriv describes the index as generated by a cryptographically secure random number generator with no order book, and calls historical patterns coincidental. A prediction for a random series is a guess, and anyone selling one is selling the guess.
Trading it sensibly
- Learn on a lower volatility index or on the demo account first.
- With options, the stake is the most a trade can lose. Keep it small against your session limit.
- With CFDs, size the position from the stop distance and use far less leverage than is offered.
- Test any bot again when you move it to this index from another.
In FXNOD
Volatility 75 and Volatility 75 (1s) are among the markets Auto Hub bots suggest, and both can be chosen in Trade Pilot and Bot Forge where your Deriv account offers them.
Questions people ask
- What is the Volatility 75 Index based on?
- Nothing in the real world. It is a simulated price generated by an algorithm to hold a volatility of 75%.
- What is the difference between Volatility 75 and Volatility 75 (1s)?
- Tick speed. Deriv says volatility indices tick every two seconds on the normal versions and every second on the faster ones.
- Is there a best strategy for Volatility 75?
- No strategy predicts its direction. What you control is the stake, the contract and the limits.
- Can I trade Volatility 75 on MT5?
- Deriv lists CFDs on synthetic indices on Deriv MT5, Deriv cTrader and TradingView, and options on Deriv Trader and Deriv Bot.
Trade a synthetic index on demo
Pick any index your Deriv account offers in Trade Pilot, or let a bot trade it at a flat stake with a required stop loss. Virtual funds first.
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