Volatility indices are the backbone of Deriv's synthetic markets. "V75" is probably the most searched synthetic index in Pakistan — but many traders open it without knowing what the 75 actually means. Let's fix that.
What is a volatility index?
A volatility index on Deriv is a synthetic market that moves randomly with a constant level of volatility. Unlike real markets, it does not get quieter at night or wilder during news. The behaviour stays consistent around the clock, every day of the week.
What the number means
The number is the volatility percentage the index is designed to maintain:
- Volatility 10 (V10) — 10% volatility, the calmest.
- Volatility 25 (V25) — 25% volatility.
- Volatility 50 (V50) — 50% volatility.
- Volatility 75 (V75) — 75% volatility, fast and aggressive.
- Volatility 100 (V100) — 100% volatility, the most active of the classic set.
Higher volatility means bigger average price moves in the same amount of time — bigger opportunities and bigger losses if your stop is too tight or your lot too large.
Regular vs 1-second indices
The classic volatility indices update their price every two seconds. Deriv also offers 1-second (1s) versions, such as Volatility 75 (1s), which update every second. Some additional 1s indices exist with other volatility levels. Faster ticks mean faster candles, which suits scalpers but punishes hesitation.
How to choose the right index
| Trader profile | Suitable starting point | Why |
|---|---|---|
| Complete beginner | V10 or V25 on demo | Slower moves, easier to read structure |
| Learning price action | V25 or V50 | Clean swings with manageable range |
| Experienced, strict risk | V75 or V100 | Large moves; requires wider stops and smaller lots |
Practical tips for trading volatility indices
- Use the same chart routine every time. Start on H1 to find the direction, then refine entries on M5 or M15.
- Adjust your stop to the index. A 50-point stop that is fine on V25 may get hit instantly on V75.
- Size by risk, not by habit. Calculate your lot from the stop distance and your fixed risk percentage.
- Do not jump between indices. Each one has its own rhythm. Stick to one or two until your journal shows consistency.
Volatility indices vs Boom and Crash
Volatility indices move in both directions without the sudden one-way spikes of Boom and Crash. That makes them a better classroom for learning trend, support, resistance and candlestick behaviour — skills that also transfer to forex and gold.
Frequently Asked Questions
Risk warning: trading derivatives carries a high level of risk. This article is for educational purposes only and is not financial advice.
