Does XM Offer Volatility 75 Index?

At first glance, the short answer is: No, XM does not directly offer the Volatility 75 Index. But, just as in trading, things aren’t as black and white as they seem. For those familiar with XM, you know it’s a global player with a diverse range of financial instruments. From forex to CFDs, XM is well-known for its user-friendly interface, competitive spreads, and impressive leverage options. The absence of the VIX 75 might surprise some, but XM compensates by offering a broad array of other indices, which can still fuel the volatility appetite of ambitious traders. To understand the underlying dynamics of why XM may not offer this index, and how you can still gain exposure to volatility without leaving XM, we need to dig deeper into the broader landscape of trading and risk management.

Let’s face it: Volatility 75 isn’t your average index. It’s a synthetic instrument, designed to mirror the volatility of the global markets, primarily originating from brokers that specialize in high-risk derivatives. The index measures the expected volatility of the markets over the next 30 days, often fluctuating wildly. As a result, it’s become popular in niche trading circles, especially among those who love to trade spikes and dips. XM, however, has built its brand on offering regulated, safer financial products, appealing to a broad spectrum of retail and institutional clients. This leads us to a broader conversation on regulation, risk, and market demand.

Why doesn’t XM offer the Volatility 75 Index?

1. Regulation and Risk Management: XM is heavily regulated in multiple jurisdictions. With licenses from top-tier regulatory bodies like the Cyprus Securities and Exchange Commission (CySEC), the Australian Securities and Investments Commission (ASIC), and the Financial Conduct Authority (FCA) in the UK, XM operates under stringent guidelines. Offering highly volatile instruments such as the VIX 75 could expose their clients to increased risk, potentially clashing with regulatory requirements. Offering products that are safer, more transparent, and tightly regulated aligns with XM's brand ethos of being a safe and reliable broker.

2. Product Offering: XM already boasts an extensive catalog of financial instruments, including more than 1000 CFDs, covering forex, commodities, indices, and cryptocurrencies. The absence of the VIX 75 doesn’t mean a lack of opportunity. In fact, other indices like the S&P 500, NASDAQ, and Dow Jones offer significant volatility during periods of economic uncertainty or major news events. Traders can exploit these movements, applying the same strategies they would on the VIX 75.

3. Synthetic Nature of Volatility 75: The VIX 75 is often categorized under synthetic indices, which are not directly linked to real-world financial markets but instead are artificially generated. These instruments are offered primarily by brokers who specialize in synthetic markets, such as Deriv.com. The absence of direct exposure to a real market means that the trading environment for synthetic indices can be more opaque, something that regulatory bodies tend to avoid for consumer protection. XM, by contrast, prioritizes transparency and real-market assets, making the exclusion of such products logical.

How to Trade Volatility at XM Without the VIX 75

If you’re intent on trading volatility but prefer to stay within the XM platform, there are still multiple ways to capitalize on market turbulence:

1. Indices With High Volatility: As mentioned, major global indices like the S&P 500, FTSE 100, and DAX 30 experience high volatility during certain periods, such as after Federal Reserve meetings, major economic data releases, or geopolitical events. These indices offer a similar "rollercoaster" experience to the VIX 75, without the synthetic risk attached.

2. Forex Market: XM is primarily known for its comprehensive forex offerings. Currencies like the GBP/USD, EUR/USD, and USD/JPY are subject to wild swings based on interest rate decisions, political instability, or even unexpected natural disasters. Forex trading offers the volatility-driven trader a chance to profit from extreme market movements, especially when employing technical analysis and leverage.

3. Commodities Market: Commodities like oil, gold, and silver often experience sharp price changes in response to global events. For instance, gold tends to surge during periods of market uncertainty, making it a valuable asset for those looking to hedge against volatility.

4. Cryptocurrencies: Cryptos like Bitcoin, Ethereum, and Ripple have been notoriously volatile, with price swings of 10% or more in a single day not being uncommon. XM offers cryptocurrency CFDs, allowing traders to speculate on the price movements without owning the underlying assets. Cryptocurrency markets are particularly suited for those who thrive on volatility, making them a potential alternative for VIX 75 enthusiasts.

5. Leverage: While leverage amplifies both gains and losses, it also introduces an element of volatility. XM offers flexible leverage options, which means you can adjust your positions to reflect market conditions, taking advantage of both small and large price movements.

Comparison with Other Brokers

You might be wondering: if XM doesn’t offer VIX 75, should you look elsewhere? While other brokers like Deriv and Binary.com specialize in synthetic indices like the Volatility 75, the broader question is whether you value regulated, transparent markets or prefer the wild west of synthetic trading.

When comparing brokers, you must weigh several factors:

1. Regulation and Security: XM operates under a multi-regulatory framework, ensuring a level of protection that synthetic index brokers often lack. For traders concerned with security, XM's offering is attractive.

2. Range of Assets: XM offers over 1000 financial instruments. This variety provides access to a plethora of markets, from equities to forex, without stepping outside regulated environments. If you want to trade synthetic indices exclusively, then niche brokers are your best bet. However, for a more diverse portfolio, XM might be the more strategic choice.

3. Spreads and Fees: XM is known for its tight spreads, starting from 0.6 pips on major currency pairs and competitive pricing across other assets. In contrast, brokers offering synthetic indices may charge higher spreads or hidden fees, reducing overall profitability.

Final Thoughts: Is the Volatility 75 Index Necessary for Success?

The absence of the VIX 75 on XM doesn’t spell disaster for volatility-loving traders. In fact, XM provides ample alternatives for those looking to profit from market fluctuations. While niche brokers offer the allure of synthetic indices, these come with increased risks, lack of transparency, and potential pitfalls for the unwary trader.

If you’re a risk-averse trader or simply value regulated, clear-cut financial instruments, XM’s extensive product offering—coupled with a stellar reputation in the trading world—makes it a prime choice. However, if your heart is set on trading the Volatility 75, other brokers may scratch that itch, albeit at the expense of safety and regulation.

In the end, successful trading is not about chasing the highest volatility. It’s about understanding risk, managing it wisely, and selecting the right instruments. Whether you choose to ride the waves of the VIX 75 elsewhere or stick to XM’s more diversified, stable offerings, the key to long-term success remains the same: discipline, strategy, and adaptability.