Best Volatility 75 Index Brokers in South Africa
We've listed the CFD brokers that offer trading on VIX Index. Our comparison is based on their regulations, fees & more factors to list the best forex broker for SA traders.
The Volatility 75 index, popularly known as VIX, is a volatility index. It measures the volatility of the S&P 500 stock index options. Commonly known as VIX, Volatility 75 gauges the behaviour of market participants.
Depending on its value, you can tell if market sentiments are fearful or complacent. If the VIX value is above 30, it indicates high volatility and fear in the near future in the market. When the VIX is below 20, it depicts that there is less volatility and complacency.
Traders can trade on the Volatility Index through CFDs. Index CFD trading is about predicting the price movements of market indices (like the S&P 500) without owning the actual assets. It’s flexible, offering opportunities in both rising and falling markets. CFDs use leverage, allowing control of larger positions with less capital, but this magnifies risks. It’s important to manage risk and stay informed about market events.
Comparison Table of Best Volatility 75 Brokers South Africa
| Spread Betting Platform | Typical VIX Spread | Minimum Deposit | Max. Leverage | |
|---|---|---|---|---|
| HotForex |
0.14 pips
|
R70
|
1:100
|
Visit Broker |
| AvaTrade |
0.21 pips
|
$100
|
1:20
|
Visit Broker |
| Plus500 |
0.23 pips
|
$100
|
1:10
|
Visit Broker |
| Pepperstone |
0.16 pips
|
$0
|
1:10
|
Visit Broker |
| FXCM |
0.6 pips
|
$50
|
1:20
|
Visit Broker |
5 Best Volatility 75 Index Brokers in South Africa
As a trader in South Africa, you can trade VIX as Spot or Futures CFD. Since VIX measures S&P 500 volatility, you can make an educated prediction whether volatility will increase or decrease in the future. All you need to do is register with a regulated broker that offers VIX CFD, and you are good to go. Your money is not safe with unregulated brokers.
Never forget that trading CFDs is risky and you can lose your trading capital
Best Volatility 75 Index Brokers in South Africa
#1 HF Markets – Best Overall VIX CFD Broker in South Africa
HF Markets or HotForex is regulated by the Financial Sector Conduct Authority (FSCA) with license number 46632. VIX can be traded as Futures CFD at HotForex with an average typical spread of 0.14 pips and maximum leverage of 1:100
They offer the instrument across four accounts – Premium, Zero, Micro, and Auto accounts. The typical spread for VIX.F is 0.14 across all accounts. HotForex also requires a 1% margin from you to trade the instrument. This means you get maximum leverage of 100:1.
VIX symbol on HF Markets trading platforms is VIX.F. Vix can be traded at HotForex at a much lower cost compared to other CFD brokers that offer VIX in SA. The availability of ZAR-based accounts and free local bank deposits further reduces the cost of deposit and currency conversion. HotForex is one of the best brokers in South Africa to trade Volatility 75 CFD.
#2 AvaTrade – Best VIX CFD Broker with Multiple Platforms
AvaTrade is regulated with the FSCA so it is safe to trade with them. Their FSCA license number is 45984. VIX is named on their website as S&P 500 VIX Short-Term Futures ETN – Series B. On their trading platform, it is symbolized as #VXXB.
AvaTrade allows traders to trade VIX index as a spot CFD. AvaTrade’s typical spread for the instrument is 0.21. They also require a 5% margin from you. This puts your maximum leverage at 20:1.
The minimum deposit amount at AvaTrade is $100 which is slightly higher than other brokers in South Africa. Clients cannot open ZAR based account as it is not supported by AvaTrade. They allow trading through MT4, MT5, along with their proprietary trading platform.
#3 Plus500 – VIX CFD Broker with Proprietary Platform
Plus500 trading platform is regulated with the FSCA, with 47546 as their license number.
VIX Volatility Index is the name on their website with VIX as a trading symbol. We also discovered that their typical spread is 0.23 with a 10% margin requirement. Plus 500 offers maximum leverage of 10:1 for VIX.
Plus500 allows trading VIX through spot CFD. Plus500 does not support any other third party trading platform. Clients can only trade through their proprietary trading platform. ZAR cannot be chosen as base currency of the account. All ZAR deposits are automatically converted to USD or base currency of the account.
#4 Pepperstone – VIX CFD Broker with MT4, MT5 and cTrader Platform
Pepperstone is licensed with the CMA in Kenya, ASIC in Australia, and FCA in the UK, Pepperstone is the only broker on our list not regulated by the FSCA.
VIX is named US Volatility Index at Pepperstone. It can be traded through MT4, MT5, as well as cTrader trading platform. Its symbol on their platform is VIX. The typical spread here is 0.16 with a maximum leverage of 10:1.
#5 FXCM
FXCM is regulated with the FSCA. Your funds are safe with them.
Volatility 75 is symbolized as VOLX on their trading platform. FXCM’s typical spread is for VOLX is 0.6 which is the highest of all our brokers. The maximum leverage is 20:1.
What is Volatility 75?
Knowing what the VIX stands for is important for you as a trader. Historically, a research paper by two financial economists (Menachem Brenner and Dan Galai) suggested the creation of a series of volatility indices. The VIX was one of the indices proposed.
In 1993, the Chicago Board Options Exchange (CBOE) introduced the VIX. 13 years later, it began trading on CBOE.
Volatility talks about the pace at which the price of a financial instrument changes. Volatility also shows the behaviour of market participants whether they are fearful or complacent.
You can detect volatility in any financial instrument by looking at its chart. However, you cannot predict future volatility this way. You can only access historical volatilities. Another issue with this is you can only check one instrument at a time.
This is why the VIX or Volatility 75 is important as a gauge for market performance. Have you heard of the S&P 500? The Standard and Poor’s 500 is a combination of the largest 500 US companies by market capitalization. Volatility 75 measures the volatility of the S&P 500 index options (SPX 500) and not just that.
The Volatility 75 is forward-looking. This means it gives the market’s expectation of future volatility over a 30-day period. Because it is connected to the companies in the US, the VIX is a major leading indicator of how the US stock markets are performing.
Finally, you can detect the behaviour of market participants based on the value of the VIX. A VIX value of 12 or lower shows low volatility and complacency among market participants. When the VIX is at 20, the volatility is seen as abnormally high. Above 30, the market is deemed extremely volatile and market participants are fearful.
Volatility 75 can spike to extreme levels when certain events occur. These events usually make investors fearful and send the market into a frenzy. The highlighted areas in the charts illustrate the effects of these events. In 1990, we had a great depression, the 9/11 bombing in 2001, the housing crisis in 2008, and the pandemic in 2020.
How you can trade Volatility 75?
Volatility 75 is just like any other index. It cannot be bought but is a tradable asset. It is available as a CFD instrument for South African traders. Trading VIX as CFD allows you to trade with leverage.
CFD, short for contract for difference, allows you to trade a contract on the VIX. You make money from the difference between the opening and closing value of the VIX points if your speculative bet is correct.
You can begin your CFD trading journey by registering with a regulated broker. Not all brokers offer the VIX as an instrument. Go through the list of instruments on the broker’s website to be sure they offer VIX.
Trading CFDs is risky so apply proper risk management as you trade. If you are not careful, you can lose all of your money.
How to choose the best Volatility 75 index Broker?
1) Regulation: The safety of your funds is very important. This is why it is advisable that you only trade with regulated brokers. Volatility 75 CFD brokers that you are looking to trade with should be regulated by the FSCA.
To verify a broker’s license with the FSCA, you can go to the footnote of the broker’s website. Here is a screenshot of what it looks like
If your preferred broker is not regulated by the FSCA, or any other Top-tier regulation, then you should avoid such a broker. ASIC and the FCA are other top-tier regulators. It is safe to trade with a broker regulated by one of them or both.
More on Regulations
CFDs are leveraged instruments. Leverage can amplify your profit and losses. ASIC and FCA have restrictions on leverage offered to traders. FSCA does not have these strict leverage caps for brokers. This can tempt you to want to overleverage your account and cost you your trading capital. You should exercise constraints when choosing your leverage.
Trading with a regulated broker guarantees the safety of your funds. Your discipline determines if you will be successful trading Volatility 75. Here is how our brokers compare by regulation:
| Broker | FSCA Regulated | Other Regulations |
|---|---|---|
| HotForex | Yes | FCA |
| AvaTrade | Yes | ASIC |
| Plus500 | Yes | ASIC,FCA |
| Pepperstone | No | ASIC, FCA, CMA |
| FXCM | Yes | ASIC, FCA |
2) Fees: Fees charged by brokers impact your profits greatly. Before choosing a broker, you have to factor in trading fees such as spreads, swaps, and commissions. There could also be non-trading fees such as deposit/withdrawal charges and inactivity fees.
You should compare brokers to know the total charges you might incur by trading with them. Doing this helps you choose a broker that suits you. You will find all fees on the broker’s website. Here is how our brokers compare by trading fees for Volatility 75:
| Broker | Spread | Swap |
|---|---|---|
| HotForex | 0.14 | N/A |
| AvaTrade | 0.21 | 0.0166% (Buy) 0.0111% (Sell) |
| Plus500 | 0.23 | 0.0139% (Buy) 0.0135 %(Sell) |
| Pepperstone | 0.16 | N/A |
| FXCM | 0.6 | N/A |
3. Trading Platform: The trading positions are opened, modified, and closed through electronic trading platforms. MT4 and MT5 are the most popular CFD trading platforms but each broker may offer different platforms with different trading conditions. Traders must ensure that they are comfortable with the trading platform offered by the broker.
4. Customer Support: Customer support services can be reached whenever traders face any query or issue. Most brokers offer live chat and email support, however, phone support is the best method to connect with the support staff of any broker. A good quality customer support service can be highly advantageous for traders. Clients in South Africa can raise a random query to check the quality of available support services at a broker.
5. Deposit and Withdrawal: Traders must be convenient with the deposit and withdrawal methods to have a pleasant trading experience. Slow deposit processing might delay the transaction and traders can miss an opportunity. Before choosing any CFD broker in South Africa, traders must ensure that the broker supports their preferred method for deposit and withdrawal. They must also check the associated fees and processing time with comparisons from other brokers.
Expert Insights on Trading Volatility 75 Index
Understand the Index: Before trading, ensure you understand what the Volatility 75 Index is and what it represents. The VIX 75 measures the market’s expectation of volatility over the coming 30 days. It’s often known as the “fear gauge” because it typically rises when investors expect significant price swings.
Risk Management: Given the high volatility, it’s crucial to have a solid risk management strategy. This includes setting stop-loss orders to limit potential losses and deciding on the amount of capital you’re willing to risk on each trade.
Technical Analysis: Use technical analysis tools like moving averages, Bollinger Bands, and the Relative Strength Index (RSI) to identify potential entry and exit points. Volatility indices often have sharp price movements, so technical indicators can help in making informed decisions.
Fundamental Analysis: Stay informed about events that could impact market volatility, such as economic announcements, geopolitical events, or changes in monetary policy. These can all have a significant impact on the VIX 75.
Trading Psychology: Maintain discipline and don’t let emotions drive your trading decisions. Volatile markets can be stressful, and it’s important to stick to your trading plan.
Diversification: Don’t put all your capital into one asset or market. Diversifying your portfolio can help mitigate risks associated with the high volatility of the VIX 75.
Leverage: Be cautious with leverage. While it can amplify gains, it can also magnify losses, especially in a volatile market like the VIX 75.
Stay Updated: Keep up-to-date with financial news and global economic indicators. Market sentiment can change quickly, and staying informed helps you to adapt your strategy accordingly.
Simulated Trading: Consider starting with a demo account to familiarize yourself with the dynamics of the VIX 75 without risking real money.
Continuous Learning: The financial markets are always evolving. Engage in continuous learning and possibly seek advice from experienced traders or financial advisors.
Remember, trading in highly volatile instruments like the Volatility 75 Index carries a high level of risk and is not suitable for all investors. It’s important to trade within your risk tolerance and seek professional advice if necessary.
Risk Involved in Trading Volatility 75 Index as CFD
Market Risk: The volatility index predicts the volatility in the American stock market in future. Hence, the index itself is quite volatile. It can be more volatile than the NASDAQ or Dow Jones Indices. The index moves due to numerous reasons throughout the trading hour and can be difficult to predict. Hence, trading on the CFD of the Volatility 75 index involves significant risk.
Third-Party Risk: This is the risk of trading with an unregulated or fake broker that may scam you. A fake broker may offer lucrative or unrealistic offers to clients to get their deposit. To mitigate this risk, traders must always trade with a regulated broker. In South Africa, traders must always trade with an FSCA-regulated broker.
Leverage Risk: Leverage allows opening bigger positions with small deposits. However, high leverage also increases the amount of loss the trader may face. The risk of losing significant account equity due to high leverage is called leverage risk. Traders must always use safe leverage to trade on CFDs.
Overnight Financing Costs: Holding positions in indices CFDs overnight may incur financing costs. These costs can eat into profits if the trading strategy involves long-term positions. Traders should consider these costs when planning their trades and managing their risk.
Technical Issues: Technical glitches, system failures, or disruptions in the trading platform can occur, potentially leading to execution delays, order rejections, or other trading-related issues. Traders should be prepared for such contingencies and have alternative plans in place.
Misalignment with Underlying Index: CFD prices may not always perfectly track the underlying index due to factors such as spreads, fees, and other market conditions. This disparity can affect the profitability of trades, especially for short-term or scalping strategies.
Tips to Trade on Volatility 75 Index
- Know the Index: Understand its behavior and extreme volatility.
- Manage Risk: Use only a small portion of capital you can afford to lose.
- Demo Account: Practice on a demo account before real trading.
- Strategy: Develop and test a clear trading strategy.
- Short-Term Focus: Suitable for short-term trading due to rapid movements.
- Technical Analysis: Use charts and indicators for informed decisions.
- Stay Informed: Monitor news and events that impact sentiment.
- Mind Leverage: Use leverage cautiously, with proper risk management.
- Diversify: Don’t concentrate all trades on Volatility 75.
- Stay Disciplined: Control emotions and stick to your plan.
- Adapt Strategy: Adjust as market conditions change.
- Continuous Learning: Keep learning to stay updated.
Comparison Table of Best Volatility 75 Brokers South Africa
| Spread Betting Platform | Typical VIX Spread | Minimum Deposit | Max. Leverage | |
|---|---|---|---|---|
| HotForex |
0.14 pips
|
R70
|
1:100
|
Visit Broker |
| AvaTrade |
0.21 pips
|
$100
|
1:20
|
Visit Broker |
| Plus500 |
0.23 pips
|
$100
|
1:10
|
Visit Broker |
| Pepperstone |
0.16 pips
|
$0
|
1:10
|
Visit Broker |
| FXCM |
0.6 pips
|
$50
|
1:20
|
Visit Broker |
FAQs on Best Volatility 75 Brokers South Africa
How do Trade with VIX in South Africa?
VIX can be traded as CFD through FSCA regulated CFD brokers in South Africa. The movements in VIX can be speculated to books profit or loss in short tenure. Each broker can incur different spread and provide different leverage to trade VIX.
Can you Buy VIX as Stocks?
TNo, VIX cannot be bought and possessed as stocks. Its price movement can be speculated to book profits in short term through Contract for Difference (CFD).
How do you Read VIX?
VIX depicts the expected volatility in the S&P 500 Index in near future. The value of VIX can range from 0 to 100. If the value of VIX is less than 20, it means the S&P 500 Index is likely to remain stable or less volatile in near future. If the value of VIX is above 30, it means that the S&P 500 Index is likely to be volatile in the near future.
Can I trade VIX 75 on MT4?
Yes, VIX or Volatility 75 Index can be traded on the MetaTrader 4 trading platform as a CFD. The spreads, leverage, and other trading conditions on trading VIX 75 CFD would depend on the broker chosen by the trader.
Which broker is best for the volatility index?
According to our analysis, HotForex and Pepperstone are among the best CFD brokers to trade on Volatility Index. HotForex allows trading on VIX CFD with high leverage low minimum deposit and low spreads.
Can you trade volatility index directly?
No, the Volatility 75 index is mainly traded as a Contract for Deposit (CFD). Several CFD brokers allow trading on Volatility 75 and several other indices with leverage. It is better to trade Volatility 75 Index through an FSCA regulated broker in South Africa.
Which platform is best for trade indices?
MetaTrader 5 is considered as the best trading platform to trade CFDs on indices. MetaTrader 4 is the most preferred CFD trading platform globally but most indices cannot be traded on MT4 trading platform.
Which time frame is best for the volatility 75 index?
Volatility can dramatically change within a day several times. The best time frame to trade on the Volatility 75 index is 5 minutes to 4 hours. This depends on the time for which traders prefer to trade. For short-term trades, 5-minute time frame is useful while longer-term traders may find a 4-hour time frame to be useful.
What is the best time to trade the volatility 75 index?
The Volatility 75 index measures the volatility on S&P 500 Stock Index. Hence, the best time to trade on CFD of Volatility 75 index is when the stocks under S&P 500 index are actively traded on the stock exchange.
Review Summary
These are the top 3 brokers
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70% of retails CFD lose money
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