What are Synthetic Shares?

Synthetic shares are the unleveraged CFD derivative product with specific shares as the underlying asset. The execution of Synthetic shares doesn't require Direct Market Access (DMA) to the electronic facilities and order books of exchanges.

Similar to ordinary CFDs on shares, synthetic shares have their price pegged to real assets such as TSLA or AAPL. Also referred to as “synthetics,” these derivative products track price changes of traditional assets without requiring access to the underlying markets.

Since synthetic shares are derivatives, their value is derived from an underlying asset tradable on a real exchange. Brokers purchase underlying assets based on their clients’ orders book.

Why invest in Synthetic Shares?

You pay NO commissions when investing in unleveraged BUY positions on Synthetic Shares. This benefit does not apply to investing in leveraged CFDs on stocks.

Having almost the same features as ordinary stock CFDs, synthetic shares allow you to trade with*:
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No markup fees
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No management fees
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No rollover fees (swaps)
*Other fees may apply. Kindly refer to our Cost and Charges to see the detailed information about commissions charged.

Another feature of synthetic shares is that they are available as fractional shares, i.e. you can trade micro lots.

How to invest in Synthetic Shares?


1
Register
2
Pass verification
3
Open MT5 trading account
4
Make a deposit
5
Choose Synthetic shares you wish to invest in

Frequently Asked Questions

No, you cannot. Only BUY positions are available for synthetic shares. To open a short position, you need to choose leveraged CFDs on shares.

As the name suggests, it is a direct access to the electronic facilities of financial market exchanges which allows final execution of transactions.
A fractional share is a portion of a full stock, i.e. you own less than one full share

When you buy a synthetic share, you invest in the underlying asset which is a physical share. Your broker purchases the share in your favor on a stock exchange.

Yes, you can receive dividends as soon as the Company gets them from the counterparty where the cash equity is custodied.

All synthetic shares are available on the MT5 platform. You can find them in the Synthetic Shares tab of the Contract Specification menu.

InstaForex uses the MT5 platform that is not an exchange or a market. This means that you can buy or sell stocks on this platform only. However, you cannot move open positions out of your InstaForex account to another broker or to another person. At the same time, you are free to close positions and withdraw your funds should you choose to. If you open a position on synthetic shares or CFDs on shares on the company's platform, the company will hold the stocks on your behalf in a segregated omnibus brokerage account. If it is CFD, the company will either hedge the position on a liquidity provider's side or deal on its own account.