What synthetic indices actually are
Synthetic indices are markets created by Deriv using a random number generator, independently audited for fairness — not by real buyers and sellers trading a real asset.
That means no company earnings, no interest rate decisions, no news events push these prices around. They move purely on their own built-in statistical behavior, 24 hours a day, 7 days a week — including weekends, when forex and gold markets are closed.
This is genuinely different from anything else in this course so far. Everything in Modules 1-6 was about reading a real market shaped by real-world events. Synthetic indices are the opposite — a controlled, always-on market with no outside news to react to at all.
Because the algorithm is independently audited, the fairness claim is at least verifiable in principle — unlike some unregulated products elsewhere, this isn't a black box with no oversight. That doesn't make it risk-free, just genuinely different from a market someone could manipulate with insider information.
The always-on nature cuts both ways. It means no weekend gap risk from news breaking while markets are closed — but it also means there's no natural "closed" period forcing a pause, which can make it easier to overtrade if you're not deliberately building breaks into your own routine.
Key takeaway
Synthetic indices are algorithm-driven markets that never close and never react to real-world news — a different game with its own rules.
Example
Vol 75 can move sharply at 3am on a Sunday with zero news behind it — because there's no news driving it in the first place, just the algorithm doing its thing.
Try this
If you're curious, open a free Deriv demo and just watch a Volatility Index for 5 minutes. Notice how different it feels from watching Gold.
This lesson is part of the free TDWK Academy — 40 lessons from zero to funded trader, with progress tracking and a certificate exam.
Continue in the full Academy →