Skew Step Indices: Introduction to asymmetrical trading

The launch of the new Skew Step Indices marks another evolution in synthetic trading at Deriv.

These indices build on the foundations of the Step and Multi-Step Indices by incorporating asymmetrical step sizes and probabilities, offering a more dynamic and potentially profitable trading opportunity.

Let’s delve into the details of these dynamic new instruments.

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What are Skew Step Indices?

The Skew Step Indices feature a range of predefined step sizes, which can be both positive and negative, each with its own probability. For example, some steps might be more likely to happen, while others are less common.

At each tick, a generated random number decides which step size to use. This creates a movement pattern that better reflects real market conditions, with more frequent small changes and occasional larger ones.

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Explore the Skew Step Indices lineup

Four new Skew Step Indices have launched, each designed to cater to different trading strategies and market conditions:

Skew Step Index 5 Up

• 90% probability of small upward movements
• 10% probability of sharp downward movements
• Volatility: 19.36%

Skew Step Index 5 Down

• 90% probability of small downward movements
• 10% probability of sharp upward movements
• Volatility: 19.36%

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Skew Step Index 4 Up

• 80% probability of small upward movements
• 20% probability of sharp downward movements
• Volatility: 14.30%

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Skew Step Index 4 Down

• 80% probability of small downward movements
• 20% probability of sharp upward movements
• Volatility: 14.30%

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Key differences between the Skew Step Indices and the Step/Multi-step Indices

Skew Step indices differ from the Step and Multi-Step Indices in both structure and behaviour. 

Step indices have a fixed step size and symmetrical probabilities, while Multi-Step Indices allow for multiple step sizes per index but maintain symmetrical probabilities. On the other hand, the Skew Step Indices incorporate multiple step sizes with asymmetrical probabilities. 

For example, the table below compares the Step 200 Index, Multi-Step 2, and Skew Step Index 4 Up:

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Understanding the volatility of these indices is also important. Skew Step Indices offer volatility levels that are intermediate between those of Step and Multi Step Indices. The volatility comparison plot below effectively illustrates this balance.

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Start trading Skew Step Indices today

Skew Step Indices are poised to push the boundaries of synthetic trading. Their asymmetrical design offers a more dynamic market experience compared to the Step and Multi-Step Indices, while maintaining predictability through clearly defined step sizes and probabilities. This combination of innovation and consistency enhances risk management, allowing traders to assess potential gains and losses more precisely.

Open your free practice trading account and explore the Skew Step Indices on Deriv MT5 and cTrader, or learn more about how to trade Synthetics Indices with our free courses on Deriv Academy.