Deriv Review 2023

Trust

Deriv Regulations

Deriv operates under five entities:

• Deriv (V) Ltd is regulated by the Vanuatu Financial Services Commission. We rate VFSC as a Tier 3 regulator.
• Deriv (BVI) Ltd is regulated by the British Virgin Islands Financial Services Commission. We Rate BVI FSC as a Tier 3 regulator.
• Deriv (FX) Ltd is regulated by the Labuan Financial Services Authority (Malaysia). We rate LFSA as a Tier 2 regulator.
• Deriv Investments (Europe) Limited is regulated by the Malta Financial Services Authority. We rate MFSA as a Tier 2 regulator.
• Deriv (SVG) LLC is an unregulated entity incorporated in St. Vincent and the Grenadines.

Why is It Important to Know Where Your Broker Subsidiary Is Regulated?

Each regulator has its requirements for brokers, which may differ materially. Such requirements include leverage levels and specific protections offered to investors, including negative balance protection, segregated accounts, and investor compensation funds. Traders must understand the differences between regulations to evaluate whether the broker suits their needs.

With Deriv, traders can open an account with five entities. The choice depends on the client’s location and on the instruments the client wants to deal with.

Deriv (SVG) LLC is a St. Vincent and the Grenadines entity which is not subject to regulatory oversight. Clients from the rest of the world except the EU and restricted countries such as the U.S., Canada, and Hong Kong can open accounts with this entity.

Deriv (V) Ltd is regulated by VFSC, a Tier 3 regulator. Clients in the rest of the world who wish to trade CFDs and derived indices can open accounts with this entity.

Deriv (BVI) is regulated by the BVI FSC, a Tier 3 regulator. Clients in the rest of the world who wish to trade CFDs and derived indices can open accounts with this entity.

Deriv (FX) Ltd is regulated by LFSA, a Tier 3 regulator. Clients in the rest of the world who wish to trade CFDs on forex and cryptocurrencies can open accounts with this entity.

Deriv Investments (Europe) is regulated by MFSA, a Tier 2 regulator. Clients in the European Union can open accounts with this entity.

The broker holds clients’ funds in segregated accounts, which means that clients’ money is not used for the broker’s business purposes. The use of segregated accounts boosts the safety of clients’ funds in case the broker has financial problems.

According to the General Terms of Use, negative balance protection applies according to local regulations. Negative balance protection ensures that clients cannot lose more money than they have in their accounts. The MFSA-regulated entity provides negative balance protection.

We have summarized key aspects of the broker’s entities in terms of regulation and safety in the table below:

Is Deriv Safe to Trade With?

Deriv has entities regulated by Tier 2 and Tier 3 regulators, as well as one entity that is not subject to regulatory oversight. The choice of the entity depends on the client’s location and the instruments the client wants to deal with. The entities hold clients’ funds separately from the firm’s funds. Negative balance protection is ensured by the MFSA-regulated entity.

Stability and Transparency

In our tests for the Trust category, we also cover factors relating to stability and transparency. Here, we focused on how long the broker has been in business, how big the company is, and how transparent it is in terms of information being readily available.

Founded in 1999, Deriv is not publicly traded and does not have a bank parent, which is a usual case for a broker. Deriv received a decent score for fee structure transparency, regulation protection transparency, and general transparency.

The important documents can be found in the terms and conditions section of the broker’s website. These documents include General terms of use, Trading terms, Funds & transfers, Security & privacy, Risk disclosure, as well as Additional terms for certain entities.

In order to get a complete picture of the accounts offered by the broker, the potential client should open a demo account, which contains the account information in an easy-to-grasp form. While the process of the demo account opening is very easy, the absence of an easy-to-use account comparison table on the broker’s website led to a medium score in the fees structure transparency category in our rating.

In summary, our findings indicate that Deriv can be regarded as having a decent level of trust and stability due to the following factors:

• Regulated by Tier 2 and Tier 3 regulators.
• More than 24 years in business.
• High general transparency and regulation protection transparency.

Fees

Trading Fees

For this review, we tested the Deriv Financial account, where the broker charges spreads and swap/rollover fees but has no commissions. Spreads are variable and depend on the liquidity situation in each instrument at a certain point in time.

Deriv Spreads

We tested the spread on the Deriv Financial Account during the London open at 8:00 a.m. UK time and just after the US open at 2:45 p.m. UK time. These are the most actively traded times.

Deriv offers low spreads for EUR/USD, GBP/JPY, and Gold. The spreads for Apple, Dax, Dow, and Bitcoin are medium, while the spreads for WTI oil and Tesla are high.

Swap Fees

My tests showed that EUR/USD swap fees were moderate, while GBP/JPY tests were high compared to the industry average.

Non-Trading Fees

Deriv has a dormant account fee of $25 after 12 months of inactivity. The fee will be charged for every six-month period when your account remains dormant.

Additionally, Deriv MT5 real account may be archived if inactive for 30 days. To reactivate the account, you can reach out to its Help Center. Any funds pending in your Deriv MT5 account will be transferred to your Deriv account.

Are Deriv Trading Fees Good?

Deriv received an average score in the Fees category in our rating. The broker offers low spreads for EUR/USD, GBP/JPY, and Gold.

Platforms and Tools

Deriv Desktop and Web Platforms

In our review, we tested the MetaTrader 5 platform analyzing charts, indicators, drawing tools, orders, and the general ease of use of the platform.

Traders should note that while Deriv provides MT5, it also has other platforms including Deriv X, Deriv EZ, SmartTrader, DTrader, Deriv GO, and DBot. The broker intends to soon introduce a copy trading tool for their clients, offering them the chance to replicate the trading strategies of successful traders.

General Ease of Use

MT5 is an advanced trading platform that could be tailored to traders’ needs. The interface is rather intuitive, although some traders may want to search for tutorials to take a deep dive into MT5’s capabilities. In general, advanced traders would have no problems with MT5, while beginners have to spend some time learning the basics of this platform.

Beginner traders should go through various chart options, indicators, drawing tools, and orders. Also, they may need to learn how to create their watchlists and manage their trading positions. Nevertheless, this work requires some time and effort, traders who invest in that ultimately receive a powerful tool that helps achieve better trading results.

Charts

MT5 offers 97 indicators and 21 timeframes, which is more than enough to customize your charts and adjust them to your needs.

Trend indicators, oscillators, volumes, Bill Williams indicators, and custom indicators help to design the chart you need.

Available timeframes range from 1 minute to 1 month so they provide the trader with an opportunity to take a look at short-term developments and significant multi-month trends.

MT5 also supports objects:

• lines
• channels
• Gann tools
• Fibonacci tools
• Elliott tools
• shapes

Many traders use these popular tools to make decisions, so their presence is a must for any reputable trading platform.

Each chart could be displayed as a bar, a candlestick, and a line. Candlesticks are generally the most popular among traders as they suggest plenty of various patterns that are used for making trading decisions. Although, other types of charts also have their fans.

MT5 charts are accessible even to novice traders but they also offer enough options for experts.

Orders

MT5 offers all main order types including:

• Market order. This order is used to buy or sell the instrument at the current market price. It is used when the trader needs to establish a position in the fastest possible way. The main downside of the market order is the necessity to pay a spread, which is a difference between the bid price and the ask price.
• Limit orders. This order is used to buy or sell the instrument at a pre-set price or better. A limit order is used when the trader wants to get a specific entry point and is unwilling to pay the current market prices.
• Stop-loss orders. Stop-loss orders are used to get you out of the position when the price is moving in the wrong way. The order is triggered when the price reaches a specified point.
• Stop limit orders. This is a stop-loss order which puts a limit order instead of a market order when it is triggered. This is a dangerous way to get out of the position and it should be used only by experienced traders.
• Trailing stop orders. This order allows you to set a stop order that will move if your open position trends in the right direction. This order is used to protect your profits in case the market direction reverses.

Different expiration types are available for all pending orders, including GTC (good-till-cancel), Today, Specified, and Specified Day.

Deriv MT5 Mobile App

In this review, we have tested the Deriv MetaTrader 5 Mobile App for Android.

General Ease of Use

The MT5 mobile app for Android is rather easy to use. It provides charts, quotes, account balance info, economic calendar, news, and other tools giving traders an opportunity to make informed trading decisions.

Charts

MT5 mobile app offers:

• 30 technical indicators
• 24 drawing tools
• 9 timeframes
• 3 chart types

This selection of options is sufficient for mobile-based trading. Typically, the mobile app is used when the trader does not have access to the desktop platform but needs to monitor the market and open positions. While the app is helpful in certain circumstances, it is not as efficient as the desktop platform, which remains the primary solution for traders who require fast and active trading capabilities.

Orders

In an MT5 mobile app, you can set market orders, limit orders, and stop orders. Trailing stops are not available on mobile trading terminals.

Tradable Instruments

In its Financial Account Deriv provides access to 38 forex pairs, 13 commodities, 60 stocks, 31 ETFs, 11 indices and 43 cryptocurrencies. Traders should note that Deriv also offers options and multipliers in other accounts.

The number of available indices, commodities, and cryptocurrencies is high. The number of available forex pairs is medium, while the number of stocks is low.

What are CFDs?

CFDs (Contracts for Differences) are financial instruments that enable traders to speculate on securities without possessing the underlying assets. The key advantage of CFDs is the access to significant leverage, which is typically not available when trading other instruments. In this light, CFDs are very popular in short-term trading.

What Can You Trade with Deriv?

• 38 forex pairs. The list includes popular forex pairs like EUR/USD, GBP/USD, and USD/CAD.
• 13 commodities. WTI Oil, Brent Oil, Gold, Silver, and other commodities are available for trading.
• 60 stocks. Traders can speculate on the popular stocks from the U.S. and Europe.
• 31 ETFs. The list includes popular names like ARKK, DIA, and GLD.
• 11 indices. Dow Jones, DAX, Nikkei 225, and other major indices are available for trading.
• 43 cryptocurrencies. Bitcoin, Ethereum, Binance Coin, and other cryptos are on the list.

In its Financial Account, Deriv offers forex pairs, commodities, indices, stocks, ETFs, and cryptocurrencies. The number of available commodities, indices, and cryptocurrencies is high. The number of available forex pairs is medium, while the number of stocks is low.

Customer Support

However, during our test, the customer support team didn’t answer one of the requested questions.

Deriv Customer Support Test

We have contacted customer support via online chat asking about account types and swap rates. The support team responded quickly and provided the necessary info on the types of accounts available at Deriv. However, the question on swap rates was not answered after many rounds of back-and-forth conversations between us and various support team members, which had a negative impact on the score.

Deposit and Withdrawal

Deriv clients can deposit and withdraw money via credit/debit cards, e-wallets, and online banking systems.

Deriv Deposits

Deriv provides a high number of deposit options in multiple currencies, including cryptocurrencies.

Deriv Withdrawals

Deriv does not charge fees for withdrawals. Most withdrawal methods take 1 working day to process, while crypto withdrawals are subject to internal checks.

Account Types and Terms

The broker provides three CFD accounts (Derived, Financial, Deriv X). Deriv also offers several in-house platforms to trade options and multipliers. To test the broker’s services without risk, traders can open a demo account. The account opening process is simple – click on the “create free demo account” link on the front page of the website and open an account within minutes.

Why is Choosing the Right Account Type Important?

The account you choose must suit your needs. Typically, the trader should focus on base currency options, contract size, commission, fees, the number of pending orders/positions, and the minimum deposit size.

What Account Types does Deriv Offer?

Derived account and Financial account are available on the MT5 platform. Derived Account offers access to Synthetics, Baskets, and Derived FX. Financial Account provides access to Forex, Stocks, Stock Indices, Commodities, ETFs, and Cryptocurrencies.

Deriv X Account is available on the Deriv X platform and offers access to Synthetics, Baskets, Derived FX, Forex, Stocks, Stock Indices, Commodities, ETFs, and Cryptocurrencies.

Swap-Free Account

Deriv offers a swap-free account on the MT5 platform with no rollover fees. The swap-free MT5 account includes instruments from both account types (Derived and Financial), such as synthetics, forex, stocks, stock indices, cryptocurrencies, and ETFs.

What is CFD leverage?

CFD Leverage allows you to avoid paying the full value of the position. Instead, you pay a deposit, which is called margin, while the remaining funds are borrowed.

In the Deriv case, the maximum leverage is up to 1:1000 for traders who open accounts with Deriv (SVG) LLC, Deriv (V) Ltd, and Deriv (BVI) Ltd. This is an extremely high level of leverage so traders should use appropriate risk management techniques when using this type of leverage. Traders who open an account with Deriv (FX) Ltd have access to leverage of up to 1:100, while traders who open an account with Deriv Investments (Europe) Limited have access to leverage of up to 1:30.

Deriv Account Opening Process

The account opening process is simple and straightforward. Traders need to register with Deriv and get access to the client portal, where they can finish the account opening process.

To open an account with Deriv:

• Step 1: Register with Deriv by clicking on the “create free demo account” on the front page of the website.
• Step 2: Choose the “real” option in the Trader’s hub.
• Step 3: Click on “get” Deriv account.
• Step 4: Choose your account currency.
• Step 5: Provide your personal details.
• Step 6: Provide your address.
• Step 7: Provide your identity information.
• Step 8: Agree to the terms of use.

What is a demo account?

A demo account is an account that allows you to test the broker’s services and your trading skills without risking your money.

Please note that your trading experience will differ when you use a demo account compared to a real-money account due to human psychology, as traders find themselves under pressure when real money is at stake.

It’s a good idea to use the demo account for practicing and learning the trading platform, but do not spend too much time on the demo. In the Deriv case, click on “create free demo account” to open a demo account.

Research

Deriv has a dedicated blog that contains market reports. These reports discuss the developments in popular markets like stocks, commodities, forex, and cryptocurrencies.

The broker also provides access to several trader tools, including margin calculator, swap calculator, pip calculator, PnL for margin calculator, and multipliers calculator.

Deriv also provides access to Deriv MT5 signals for copy trading.

Education

The above-mentioned blog also contains educational articles covering various topics, like Forex, Commodities, or Strategies and Tips. The content is focused on the needs of beginner traders.

The Bottom Line

Deriv has been in business for more than 24 years. The broker operates under five entities: Deriv (SVG) LLC (unregulated, St. Vincent & the Grenadines), Deriv (V) Ltd (VFSC, a Tier 3 regulator), Deriv (BVI) Ltd (BVI FSC, a Tier 3 regulator), Deriv (FX) Ltd (LFSA, a Tier 3 regulator), Deriv Investments (Europe) Limited (MFSA, a Tier 2 regulator).

Traders can choose between MT5 accounts and in-house platform accounts. Demo accounts are available for practice before risking real money.

Deriv provides access to forex, stocks, commodities, indices, ETFs, cryptocurrencies, options, and multipliers. Deposits start at just $5. Traders can use multiple deposit and withdrawal options available in various currencies, including cryptocurrencies.

FAQ