TRADING BINARY OPTIONS WITH IQ OPTION
When it comes to binary options trading, IQ Option is a well-known and established broker. With a solid options trading platform and other essential features, IQ gives you the best opportunity to stay ahead of the pack. Continue reading to find out what binary options are, how to trade it with IQ Option, and which features you can enjoy with this broker.
This material is not intended for viewers from EEA countries. Binary options are not promoted or sold to retail EEA traders.
- Min. Deposit $10
- Min. Investment $1
- Profit up to 95%*
- Free Demo account
*Amount is credited to account in case of successful investment
What are Binary Options?
A binary option enables traders to speculate on the price movement of a particular asset and invest a certain amount of money:
- which is either lost completely in the case of a losing trade,
- or is multiplied by a certain profit factor in the case of a winning trade.
Let’s use a EUR/USD forex binary option contract with a payout of 90% as an example. A trader can either speculate on a rise in the price of this currency pair, or on the price to fall. The trader needs to decide on the following:
- Whether the price is likely to rise or fall.
- When to enter the trade.The strike price (price at which to enter the trade).
- How much to invest in the trade.
- The expiration time of the option.
When the trader has determined all of these points, he or she can enter the trade and simply wait until expiration to know what the result is. (IQ Option’s binary options can also be sold up to a certain point before the expiration time, though). If the trader believes that the price will rise, he buys a call option and in case a lower price is anticipated, a put option can be bought. In IQ Option’s trading terminal, the call option button is green and reads ‘Higher’ while the put option button is red and reads ‘Lower’. Look at this screenshot:
Let’s examine a particular scenario to better grasp the technical details of how a binary option can be traded. In this example of an option trade on the EUR/USD, we will use the following parameters:
- Strike price at 1.16500.
- Expiration time: 5 minutes after the option contract is entered.
- Payout: 90% of the invested amount.
- A call option is bought by a trader who expects the price of the EUR/USD to rise and be above 1.16500 (the strike price) at the time when the option expires.
- An investment of $10 is made in this trade.
So when the trader buys this call option one of the following will happen:
- If the price is at 1.16500 when the option expires, the trader will neither lose his investment of $10 or gain anything, because the price at the time of expiration is the same as the strike price.
- If the price trades above 1.16500 when the expiration time is reached, the trader will gain 90% ($9) on top of the amount ($10) he invested. So when the option expires, the trader will still have his initial investment of $10 plus an extra $9, which means he has made a profit of $9.
- If the price trades below 1.16500 when the expiration time is reached, the trader will lose his initial investment of $10.
- The trader may, for whatever reason, choose to exit the options trade prematurely. This will limit his profit potential on the particular trade, as the payout (in case a profit is realized) at that time will be less than the maximum payout which may be achieved in case the price is above the strike price at the time of expiration. Of course, in the case that a premature exit from a binary option results in a loss, the loss may in certain cases be less than the maximum loss which could be incurred if the option expired out of the money (below the strike price).
Now that we’ve covered some basics of trading binary options, let’s look at how to trade it with IQ Option, specifically.
How to Trade Binary Options With IQ Option
Trading binary options with IQ Option can be done by doing the following:
1. After opening a live or demo account with IQ Option, open the web or desktop version of IQ Option’s trading platform:
2. Click on the ‘plus’ button next to the current trading instrument to open a new chart. This brings you to a list of instruments in which binary options are available:
3. From the list of binary options, open charts for those instruments you want to trade.
4. On the right side of the platform, choose the investment amount and expiration time, and then click on the ‘HIGHER’ or ‘LOWER’ button to confirm a ‘call’ or ‘put’ option, respectively. Look at this screenshot:
The profitability percentage is the percentage of the invested amount which will be credited to your account for a successful trade. The percentage in this screenshot is *71%, which means that a trader who invests $10 in a successful trade will retain this $10 and gain an additional $7.10 as soon as the binary option expires. If the trader loses the trade, he will lose the $10 he invested.
*Amount to be credited to the account for a successful trade.
Binary Option Instruments Offered by IQ Option
With IQ Option, clients can trade binary options from the following asset classes: forex (about 34 pairs), stocks and stock indices (about 24), and commodities (gold and silver). Traders can also enjoy weekend trading with OTC (over the counter) binary options which are available when the markets for regular binary options are closed. Only a few forex pairs are available to trade with OTC binary options.
Minimum Deposit and Trade Size
The minimum deposit at IQ Option is $10 and the minimum deal size is $1.
The payout percentages of the different binary options vary, depending on the time of the day, the expiration time, the spread and transaction costs of the underlying instrument, the instrument’s liquidity (which may also impact it’s spread), and some other factors. The maximum payout percentage (on certain instruments) is about 90% to 95%, but this may vary from time to time.
IQ Option’s Trading Platform
Although IQ Option offers numerous other tradable instruments besides different option contracts, it is actually well-known for offering excellent infrastructure for trading options, including binary options, of course.
An integral part of a great option broker’s infrastructure, is its trading platform. The platform needs to be reliable and robust. Besides this, it also needs to be easy-to-use and responsive enough to process orders in a timely fashion. Then, of course, the platform needs to have the necessary charts, technical indicators, and other features which make trading as convenient and accurate as possible. Let’s take a closer look at some of the features available in IQ Option’s trading platform:
1. Charts and Technical Indicators
Technical analysis on different trading instruments can be done accurately and efficiently with IQ Option’s charting package. Whether you like to use moving averages, oscillators, or even Ichimoku Cloud, these indicators (and many others) are freely available in the trading platform itself.
A FEW OF THE INDICATORS AVAILABLE IN IQ OPTION’S TRADING PLATFORM.
2. Other Platform Features (On the left side of the platform)
Other items in IQ Option’s platform include the following:
- Total Portfolio (Here you can see a list of all your open positions).
- Trading History (A list of all closed trades)
- Chats and Support (Chat with fellow traders or IQ Option support representatives).
- Leaderboard (See how other traders are faring. This is based on winning trades only)
- Market Analysis (Get live news and market updates here).
- Tournaments (Get information about IQ Option’s trading tournaments here).
- Video Tutorials (Learn more about the markets here).
- Help (Ask a question or view frequently asked questions in this section).
3. More Platform Features
With IQ Option’s trading platform, traders can trade binary options (and other instruments) directly on the charts they’re looking at. There is no need to open a separate order entry box or anything like that. This makes trade execution really convenient.
Traders can also choose between different chart types (for example candlestick charts, Heikin-Ashi charts, line charts, bar charts, etc.), apply different timeframes, and use graphical tools to draw lines and other features on their charts.
IQ Option’s Mobile App
Traders who would like to specifically trade binary options, on mobile devices, can do it on Android and iOS devices with the IQ Option progressive Web App (PWA).
Google Play and the App Store do not have apps available for trading binary options with IQ Option.
For more information about trading binary options with the mobile PWA App, please read our Article IQ Option PWA.
A great feature of IQ Option, is its free demo account which has all the features and tradable assets of a real money account. Also, traders with real money accounts can switch between their real and demo accounts by simply selecting the account they want (from the drop-down menu) at the top of the trading platform. Here is a screenshot:
TAP ON THE ARROW NEXT TO THE ACCOUNT BALANCE TO SWITCH BETWEEN LIVE AND DEMO ACCOUNTS.
IQ Option makes trading tournaments available to non-EU clients. With each tournament, only binary options can be traded. Each participant gets a tournament trading account with a virtual balance of, for example, $100; with an entry fee of $20 (also just an example). The initial virtual account balance, entry fee, prize pool and structure, and duration of the tournament vary.
Participants compete for a prize pool which is divided between the top traders (usually between 1 and 30) with the most money in their tournament accounts at the end of the tournament. Contestants can open binary option trades with any portion of the available funds in their tournament accounts. They can also use the ‘rebuy’ tool which allows them to top up their virtual tournament trading accounts with the value of the initial balance in case the balance falls below the value of the initial balance. This rebuy tool can be used an unlimited number of times during each tournament but each rebuy will cost the same amount as the initial entry fee.
IQ Option’s support team is on standby to assist clients 24 hours a day, 7 days a week, via live chat, telephone, or email.
It shouldn’t be surprising that IQ Option has received quite a number of awards. These have been awarded to IQ Option for its outstanding trading apps, its commitment to quality and excellence, its efficiency, impeccable design, and other attributes. Although IQ Option offers much more than just binary options, many of its awards have been for services and infrastructure related to binary options.
IQ OPTION HAS OFTEN RECEIVED AWARDS FOR ITS TRADING APPS, CUSTOMER SATISFACTION, AND OTHER GOOD ATTRIBUTES.
IQ Option is a solid broker with good trading apps, especially for trading binary options. It offers a wide range of binary option assets and also has digital options, forex pairs, stock CFDs, commodity CFDs, cryptocurrency CFDs, and ETFs available.
IQ Option’s trading app (desktop, online, or mobile) is equipped with all the tools that a trader may need, and to execute trades with this user-oriented app is a pleasure.