FNG Exclusive Interview… FNG is pleased to speak today with Prakash Bhudia, Head of Product and Growth at Deriv, about how Deriv is revolutionizing online trading with groundbreaking tactical indices.

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FNG: Hi Prakash, and thanks for joining us today. Who are these indices designed for and what specific challenges do they address?

Prakash: With Tactical Indices, you simply express your market view through a single position. Consider, for instance, a scenario where you anticipate a correction in the rapidly rising price of silver. Deriv’s RSI Silver Pullback index gives you the opportunity to capitalise on this potential downturn without constantly monitoring RSI levels, timing your entries, or managing multiple positions.

Deriv’s Tactical Indices are designed to empower traders of all levels, particularly those who:

• Have busy schedules and can’t constantly monitor the markets.
• Recognise market opportunities but prefer a simplified approach to execution.
• Seek to implement technical strategies to minimise manual analysis.

It’s about making technical trading more accessible and helping traders focus on their market view whilst the index handles the strategy.

FNG: So what exactly are Tactical Indices and how do they work?

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Prakash: Think of each Tactical Index as being linked to a theoretical trading portfolio that follows a very specific strategy. When that specific strategy performs well, the portfolio grows and the index price rises. When it underperforms, the portfolio shrinks and the index falls. Traders simply take positions based on whether they believe the underlying strategy will succeed.

The indices are constructed to amplify the primary market view, often significantly outperforming the underlying market at times when the primary strategy is being exhibited in the underlying market.

We’re pairing popular financial indices with widely used technical indicators to create these specific indices, each following a very specific market view. We started with RSI, one of the most popular technical indicators used by traders, and combined it with silver to create our first set of indices.

FNG: What are the four indices you’ve created using RSI and silver?

Prakash: We’ve launched four distinct strategies:

Trend Up and Trend Down indices capture momentum in clear directional markets. For example, when silver dropped 5% after the US elections, our Trend Down index gained 15% by capitalising on the strong downward momentum outperforming the underlying silver move.

The Pullback index is designed for temporary reversals in uptrends, like when silver briefly declined 5.85% in October due to US employment data, Pullback increased its return by 16%.

The Rebound index works the opposite way, capturing bounces in downtrends. For example, when silver rebounded by around 3.5% from the previous day’s losses in early December, this index turned that recovery into a 12.7% gain.

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The examples I’ve mentioned illustrate the profit potential with Tactical Indices, but it’s essential to acknowledge that trading always involves inherent risks, and losses can still occur.

FNG: Why is expanding to other technical indicators significant?

Prakash: Each technical indicator captures different market dynamics in addition to the price level. For example, for our first release, RSI captures the strength of the move. MACD indices will identify trend changes by comparing moving averages potentially catching major market turns. Bollinger Bands strategies will focus on price volatility and mean reversion opportunities. With pairs trading, we’ll capture the relative strength between two correlated assets. And there will be many more.

FNG: What’s the bigger vision here?

Prakash: We’re building a comprehensive suite of strategy indices that combine different technical indicators with various assets, initially with a one-to-one relationship and maybe later to a many-to many relationship. Imagine being able to trade Momentum in Bitcoin, Mean Reversion in GBPUSD, or Pairs relationships in Gold/Silver, all through single instruments that automatically execute sophisticated strategies.

Deriv’s 25-year legacy in the online trading industry is a testament to our dedication to innovation. We’re consistently adapting to the evolving needs of traders, embracing emerging technologies and pioneering solutions that redefine the boundaries of what’s possible in the financial markets.

Disclaimer: Trading conditions, products, and platforms may differ depending on the client’s country of residence. For more information, visit www.deriv.com. Trading is risky. Traders should consider whether they understand how these products work and whether they can afford to take the high risk of losing their money.