Meet Hybrid Indices: A new twist on synthetic trading

Hybrid Indices are Deriv-exclusive synthetic indices that combine the directional structure of Crash and Boom Indices with the variable price behaviour of Volatility Indices. They are designed to simulate more realistic market conditions by introducing unpredictable price movement before major upward or downward events, while maintaining a lower overall volatility level.

This combination creates synthetic markets that behave less mechanically and require more adaptive trading strategies. For traders who want synthetic instruments that better resemble real-world price action — without exposure to news events or economic data — Hybrid Indices represent a significant development in synthetic trading on Deriv.

Quick summary

• Hybrid Indices blend Crash/Boom directional behaviour with Volatility Index-style randomness
• Annualised volatility is approximately 20%, lower than traditional Crash/Boom Indices
• Signature spikes and drops remain, but lead-ups are less predictable
• Available only on Deriv via Deriv MT5 and Deriv cTrader
• Suitable for traders seeking more realistic synthetic price behaviour

What are Hybrid Indices?

Hybrid Indices are algorithm-generated synthetic indices created by Deriv. They are not influenced by economic news, geopolitical events, or market sentiment. Instead, their price movements are produced by a transparent mathematical model.

What makes Hybrid Indices distinct is how that model combines two established synthetic behaviours:

• Crash/Boom Indices provide structured directional movement followed by sudden spikes or drops
• Volatility Indices contribute continuous price fluctuation and randomness

The result is a synthetic asset that trends for extended periods, develops unstable or choppy movement, and then produces a sharp upward or downward price event. The timing and intensity of the lead-up phase vary from one occurrence to the next.

Hybrid Indices vs traditional synthetic indices

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Key takeaway: Hybrid Indices reduce overall volatility while increasing uncertainty in the period before major price moves, making timing and risk management more critical. To learn more about effective risk management, read our guide on managing volatility risks. 

How Hybrid Indices work

Crash and Boom foundations

Hybrid Indices retain the core structure of Crash and Boom Indices:

• Crash-based hybrids rise gradually before experiencing sudden downward moves
• Boom-based hybrids decline gradually before producing sharp upward moves

These directional tendencies remain consistent across all Hybrid Index variants.

Added micro-volatility

Before each major price event, Hybrid Indices introduce irregular short-term price fluctuations. This micro-volatility:

• Breaks up smooth price movement
• Creates false signals and temporary reversals
• Makes exact spike or drop timing harder to anticipate

Past price behaviour does not reliably predict when the next high-impact move will occur.

Real-world parallels

In live financial markets, prices often become unstable before major institutional trades or economic releases. Hybrid Indices replicate this behaviour synthetically by combining structured direction with controlled randomness, without relying on external data.

Key features and benefits

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Hybrid Indices in action

Deriv currently offers Hybrid Indices across multiple volatility tiers.

Boom-based Hybrid Indices

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Volatility over Boom 400

Volatility over Boom 550

Volatility over Boom 750

Crash-based Hybrid Indices

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Volatility over Crash 400

Volatility over Crash 550

Volatility over Crash 750

Hybrid Indices vs Crash/Boom Indices

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Key takeaway: Hybrid Indices reduce price magnitude but increase uncertainty in the lead-up to major moves, requiring more disciplined trade planning.

How to trade Hybrid Indices on Deriv

Step-by-step

1. Open a Deriv account
   Create a free account on Deriv.com and access a demo balance.
   
   
2. Choose a trading platform
   
   • Deriv MT5: advanced indicators, custom tools, multi-market environment
     
   • cTrader: cleaner interface, faster execution, simplified order management
     
3. Select a Hybrid Index
   Find Vol over Boom or Vol over Crash indices in the synthetic markets section.
   
   
4. Practise on demo
   Observe lead-up volatility, test entries, and evaluate stop placement.
   
   
5. Move to live trading
   Start with small position sizes and conservative leverage.

Trading and risk management considerations

Trading approach

• Expect false breakouts during volatile lead-ups
• Combine trend identification with confirmation tools
• Avoid relying solely on historical patterns

Risk management

• Use stop-loss orders that account for choppy price movement
• Limit position size despite lower volatility
• Avoid overtrading during consolidation phases

It is important to remember that lower volatility does not eliminate risk — sharp moves still occur.

Hybrid Indices offer a structured yet less predictable form of synthetic trading. By combining directional behaviour with variable lead-up volatility, they create markets that more closely resemble real-world price dynamics while remaining transparent and continuously available.

For traders who want greater realism without exposure to external events, Hybrid Indices provide a distinct alternative within Deriv’s synthetic markets. Try them out on a free demo account to get started.