Help Center

Deriv Terminologies

10 min. readlast update: 11.24.2023

DESCRIPTION: You may have inquiries on a certain terminologies that is used on our platform or when you come across our website. This article covers different commonly used terminologies related to our company products or operations.

POSSIBLE REASON: 

The Deriv Terminologies are categorized into 2 areas:

  • Product
  • Process

RESOLUTION STEPS:

Please go through the following terminologies for further understanding on the terminologies that may be used on our website.

>> PRODUCT

  1. A Brand: A brand is a distinguishing symbol, mark, logo, name, word, sentence, or a combination of these items that companies use to distinguish their product from others in the market. Brands represent white label concept in our system. Each brand has its own configuration, templates, etc. There were some brand names like Champion which have been retired.
  2. Landing company: A landing company is the specific company that a client will be assigned to, based on their country of residence. For example, a client from Indonesia can be assigned to the Deriv SVG Ltd.
  3. Broker code: A short prefix that is added to a client's account ID, which indicates which landing company they are assigned to. For example, a client from Indonesia that's assigned to the Deriv SVG Ltd would be assigned with the CR prefix to their account ID, such as CR12345. 
  4. Synthetic Indices: Deriv's proprietary indices that are available for trading 24/7, backed by a cryptographically secure random generator. These indices are not influenced by the real-world market (no liquidity risks, not influenced by news events). For example, volatility indices, crash/boom indices. 
  5. Options: A type of Options that either pay a fixed full payout or nothing at all depending on your prediction.
  6. Multipliers: Deriv Multipliers is a derivative product on a specific underlying asset that enables a trader to achieve a leveraged profit while limiting the maximum loss to the invested amount. When the market moves in your favour, you'll multiply your potential profits. If the market moves against your prediction, your losses are limited only to your stake.
  7. Contract for Difference (CFD): A contract for differences (CFD) is a contract that pays the difference between the value of an asset at the time of opening a trade and its value at closing the trade. It allows you to trade on the price movement of an asset, without the need of owning it. 
  8. Counterparty: The counterparty is the other party that participates in the trade with the clients. For example, if clients trade CFDs via Deriv, the client's counterparty will be Deriv. 
  9. A-Book: There are 3 counterparties for A-Book, which are the client, Liquidity Provider & Deriv. Under A-Book, Deriv replicates client’s trade in an account opened with a Liquidity Provider. Deriv makes money via the markup on the spreads of every CFD trade a client makes, thus doesn’t depend on clients’ trading result and bears less risks. 
  10. B-Book: There are 2 counterparties for B-Book, whereby the client & Deriv trade directly with each other. Currently we B-book all our options trades. 
  11. Stake: The cost for purchasing a contract. 
  12. Payout: The amount of money to be received at the end of the contract. 
  13. Major Pairs: Currency pairs that are more liquid such as EUR/USD, USD/JPY, GBP/USD, and USD/CHF. 
  14. Minor pairs: Currency pairs that are less liquid such as EUR/CHF, CAD/JPY, GBP/AUD, etc. 
  15. Basket Indices: Measures the value of a particular currency against a basket of five global currencies (EUR, GBP, JPY, AUD, USD), each weighted by 20%. 
  16. Exotic Pairs: Exotic Pairs are established by 1 major currency being paired with a currency from a developing or emerging market, such as EUR/TRY and CHF/JPY 
  17. Cashier: A feature on client accounts which shows all the deposit and withdrawal methods available to clients. Clients will have to access this page to make deposits and withdrawals requests, to and from their account balances respectively. 
  18. Take Profit: A feature that allows clients to set the level of profit that they target to maximize in the event the market moves in their favour. When the market value reaches the set amount, the trade will be closed automatically and the earnings will be deposited into their account. 
  19. Stop Loss: A feature that allows clients to set the maximum level of loss that they are able to bear in the event the market moves against their favour. When the market value falls to the set amount, the trade will be closed automatically. 
  20. Deal Cancellation: A feature offerred for Multipliers contracts that allows clients to cancel their contract within a chosen time-frame, from the point of purchasing the contract, without losing their stake amount. A small fee will be charged for this feature. 
  21. Deriv Peer to Peer (DP2P): Service provided by Deriv where buyers and sellers are allowed to exchange their Deriv credits for local currency with other traders, without interference by a third party. The Deriv credit can be used for trading on Deriv's platform. Example client A places a sell advertisements to sell his USD Deriv Credit in exchange of Naira at rate of 425. Client B from Nigeria can place an order to exchange Naira with client A through the DP2P platform, and start trading in Deriv using the USD credit received from Client A. 
  22. Smart Trader: Deriv’s popular user-friendly platform used for Options trading. The platform is accessible via deriv.com on desktop and mobile browsers. 
  23. DTrader: Deriv’s flagship platform for trading Digital Options and Multipliers. The platform is accessible via deriv.com on desktop and mobile browsers. 
  24. Deriv Go: Deriv’s flagship native mobile app. Currently, the app is only used for trading Multipliers on forex, synthetic indices, and cryptocurrencies. 
  25. Deriv X: A third party platform developed by DevExperts team, which allows clients to trade CFDs, other than the MT5 platform. Deriv X is a white-labelled version of Devexperts DXtrade platform. 
  26. Binary Bot & DBot (Deriv): Product that provides a platform for users to build their own automated trading bot using drag-and-drop “blocks”, without any need of programming knowledge. Each block contains instructions that determine the bot's behaviour. 
  27. Deriv MetaTrader 5 (DMT5): MT5 is a third-party multi-asset platform, developed by MetaQuotes, that is integrated with Deriv to provide CFD trading for clients. Deriv runs the server component for its MT5 product offering. 
  28. Escrow Account: A feature of the DP2P product, whereby this is an account where funds are held in trust whilst two or more parties complete a DP2P buy / sell transaction. 
  29. Lookback: A type of Option trade which allows clients to earn a payout depending on the optimum high or low achieved by the market during the duration of a contract. For example, in the event a client places a multiplier of USD5 in a High-Close Lookback option for the next 1 minute, the proceeds the client will receive would be: (Highest Value - Close Value)*Multiplier amount set by client. 
  30. Crash/Boom: A type of synthetic indices, where there is an average of one drop (crash) or one spike (boom) in prices that occur in a series of X ticks. Example Crash/boom 1000 index will have an average of one drop (crash) or one spike (boom) in prices in series of 1000 ticks. 
  31. Range Break: A type of synthetic Indices, whereby these indices fluctuate between two price points (borders), occasionally breaking through the borders to create a new range on average once every X times that they hit the borders. Example Range break 100 index will have the break through with new range on average once every 100 times. 
  32. Step Indices: A type of synthetic indices, whereby there is an equal probability of up/down movement in a price series with a fixed step size of 0.1. 
  33. Volatility Indices: A type of synthetic indices, which corresponds to simulated markets with constant volatilities of 10%, 25%, 50%, 75%, 100%, 200% & 300%. 
  34. Swap charges: A fee applied on certain trades that are rolled over to the next day (not closed within the same day) in DMT5 platform.
  35. Deriv API: An API available for clients to build their own trading application, signals or other integrations with Deriv platform, using their programming language of choice.
  36. Call/Put Spreads: A type of option trade which allows clients to earn up to the specified payout depending on the position of the exit spot relative to the two defined barriers.
  37. Leverage: The use of smaller amount of capital to take larger positions in the DMT5 platform. As such, clients would not need to pay the full value of the share upfront or take ownership of the asset. For example, a leverage of 10:1 means that the client needs one tenth of the transaction size to open a position in the DMT5 platform. 
  38. Liquidity Provider: A market maker who provide exchange rate quotations to others, by taking positions in currency pairs which can either be offset with another market maker or added to the market maker’s book to be liquidated at a later time. CFD trades that are A-Booked will be passed on by Deriv to the Liquidity Provider, upon which the trade will be executed.

>> PROCESS

  1. Margin: A margin is the amount of funds (expressed in the trader's account currency) that is held by the broker for keeping a position open.  
  2. User: A customer, as identified by their email address. This is how customers log into the website currently. The customer will be assigned with a unique Deriv User ID when registering with Deriv. A User can have multiple account IDs, using the same email address, to trade on different products or currencies. 
  3. Funded User: Funded user is user with at least one time of successful deposit. One user (by Deriv user id) can have multiple real accounts, and at least one successful deposit is required in any of their real accounts to be a Funded User. 
  4. New Funded User: User with a first time successful deposit in any of their real account at a given time. If there are more deposit in the future, this user will not be considered as a New Funded User for the next time period, but rather just a Funded User. 
  5. Real User: A client with a Deriv User ID, that owns at least one real money account with the Company. 
  6. Virtual / Demo User: A client with a Deriv User ID, who owns at least one demo account with the Company. 
  7. Active Trader: An account or user is considered as an active trader, if they have placed at least one trade for a given period. 
  8. Net Deposit: Sum of all deposits and withdrawals the client has made during a period of time, which is calculated as total deposits - total withdrawals. 
  9. Affiliate: Partnership programme with outsiders, who introduces Deriv.com to potential new clients. Affiliates earn their commissions based on the relevant plans they have subscribed to. 
  10. Introducing Broker (IB): Deriv's business partner who brings in new clients to trade on the DMT5 platform. The business partner would earn commissions from the clients' trade in DMT5 platform. All IBs are affiliates, but not all affiliates are IBs. 

Broker Code Naming:

Landing Company >> Broker Code >> Regulator

  • Deriv Investments (Europe) Limited >> MF >> MFSA (Malta Financial Services Authority)
  • Deriv (SVG) LLC >> CR >> N/A
  • Deriv (FX) Ltd >> MTR Labuan >> LFSA
  • Deriv (BVI) Ltd >> MTR BVI >> BVI FSC
  • Deriv (V) Ltd >> MTR Vanuatu >> VFSC

Was this article helpful?