Synthetic Indices

What Are Synthetic Indices?

Synthetic indices are a type of index created by Liquid Brokers to simulate market conditions, such as volatility, crashes, and booms, based on real-world market patterns. These instruments are only available on Demo accounts.

Synthetic indices offer 24/7 trading, with their prices powered by a randomly generated feed that follows specific parameters. Unlike traditional markets, synthetic indices aren’t influenced by external factors like global events or liquidity risks, thanks to their underlying technology.

How Do I Trade Synthetic Indices?

With Liquid Brokers, you can trade synthetic indices using leverage. This means you only need to pay a small portion of the contract’s total value. However, keep in mind that leverage can amplify both potential gains and losses.

• Each 1 lot is equivalent to 10 index contracts.

Additionally, we are excited to announce that a monthly competition will be held, giving participants the chance to trade synthetic indices and showcase their skills.

What Synthetic Indices Are Available to Trade?

You can locate the available synthetic indices by searching for their symbols in Liquid Charts or Liquid Charts Pro on your trading platform.

Here is a list of synthetic indices available for trading:

• BOOM1000 – An average of one boom tick every 1000 ticks

• BOOM500 – An average of one boom tick every 500 ticks

• BOOM300 – An average of one boom tick every 300 ticks

• CRASH1000 – An average of one crash tick every 1000 ticks

• CRASH500 – An average of one crash tick every 500 ticks

• CRASH300 – An average of one crash tick every 300 ticks

What Drives Movements in Synthetic Indices?

The Crash and Boom indices incorporate cyclical booms or crashes, along with upward or downward trends, respectively. The number in the index name indicates how frequently these movements occur (in ticks). For instance, the CRASH300 index experiences an average crash once every 300 ticks, and similarly, the BOOM300 index experiences a boom once every 300 ticks.

What Are the Commission and Swap Fees for Synthetic Indices?

• Demo Accounts: A commission of $7 per lot (charged at the opening), in addition to a spread that can vary from XX to YY pips.

• Swap Rates: A swap rate is applied for positions held overnight:

  • Long position: -0.00083%
  • Short position: -0.00056%

How Are Pending Orders Executed for Synthetic Indices?

Pending orders, including Take Profit (TP), Stop Loss (SL), Limit, and Stop orders, are executed based on the tick movements of BOOM and CRASH indices. The price doesn’t progress in a sequential order but follows a random directional pattern within the index’s set parameters.

When a pending order is triggered, it will be executed at the price of the tick that reaches it at the moment of activation. For example, if you set a stop-loss for a sell order on CRASH1000 at a price of 6900, but the tick that triggers the order has an ask price of 6901, your position will close at the price of that tick at the time the order is activated.