ETF TRADING WITH IQ OPTION - REVIEW AND GUIDE 2020
Perhaps you know something about forex trading, binary options, commodity trading, and even cryptocurrencies. But are you familiar with exchange-traded funds(ETFs)?
IQ Option has a grand range of financial assets you can choose from. Binary options, digital options, FX options, forex pairs, commodity CFDs, stock CFDs, equity index CFDs, cryptocurrency CFDs… and also a wide selection of ETFs. Join us for a walk through IQ Option’s award-winning trading platform, and how to trade a wide range of ETFs with this top-notch broker.
- Minimum deal size of $1
- Up to 1:100 leverage available
- Conveniently invest in specific market sectors
- Go long(buy) or short(sell)
- Enjoy super-tight spreads as low as 0.01%
What are ETFs?
ETFs are investment funds which can be traded on stock exchanges, much like individual stocks are traded. A single ETF can hold numerous assets like a selection of commodities, interest rate instruments, bonds, currencies, stocks, etc. An ETF is basically just a basket of securities that can be traded as one single financial instrument.
For the purpose of this article, we will not cover all the technical details on how ETFs are balanced, priced, etc. The most important ETF features you need to be aware of are the following:
- Shares of ETFs, unlike the shares of mutual funds, can be bought at any time during trading hours because the net asset value(NAV) is calculated throughout the day.
- ETFs are passively (and inexpensively) managed and are not intended to outperform a certain benchmark index or basket of securities. The objective is to track an index or basket of securities.
- IQ Option’s ETF instruments are actually contracts for difference (CFDs) for which different ETFs are the underlying financial instruments. These ETF CFDs can be bought (long positions) or sold (short positions).
Trading ETFs on IQ Option’s Platform
Different Apps for Trading ETFs
IQ Option’s multi-asset trading platform can be accessed via desktop, web, iOS(mobile), and Android(mobile) applications. This makes ETF trading really convenient because not only can you trade it with a pc, but also with your favourite mobile device.
IQ Option’s Range of ETFs
IQ Option has 25 different ETFs available on its trading platform, although more ETF instruments are likely to be added soon. These ETFs cover various market sectors and financial instruments, including metals, semiconductors, energy, futures volatility, utilities, emerging markets, technology, global stock indices, and more.
SOME OF THE ETFS YOU CAN TRADE WITH IQ OPTION
Why Trade ETFs? What are the Advantages?
One of the most important advantages of trading ETFs is that traders can gain exposure to a specific market sector or group of assets by means of a single ETF instrument. For example, if a trader believes that a boom might take place in the semiconductor industry, he may take a long position in IQ Option’s VanEck Vectors Semiconductor ETF which tracks the performance results of some of the largest and most liquid U.S. listed companies which are active in the semiconductor industry.
Likewise, an investor who would like to gain broad exposure to the technology industry need not purchase many different technology stocks and be troubled with the technicalities of how to ‘weight’ his technology portfolio. By simply buying IQ Option’s Technology Select Sector Fund, the investor can achieve his goal with great convenience and simplicity.
IQ Option’s ETFs also enable small investors and traders to gain access to a basket of financial instruments with a minimal investment amount of only $1, which is remarkable.
IQ Option’s ETF spreads are pretty tight. These are floating spreads, which means that they can change several times during one trading session. Here is a screenshot of some of the lowest ETF spreads you may encounter:
A COUPLE OF IQ OPTION ETFS WITH SPREADS BELOW 0.05%
Different Leverage Settings for ETF Trading
Traders from outside the European Union and pro-EU traders can trade IQ Option’s ETF instruments with leverage of up to 1:100. Retail traders from the European Union (EU) are limited by ESMA (the European Securities and Markets Authority) regulation to a maximum leverage of 1:5.
ETF Market Hours
IQ Option’s ETFs are ‘based’ in the United States and the times during which they can be traded are aligned with the market hours of the New York Stock Exchange (NYSE), which are 09:30 EST to 16:00 EST. However, most of IQ Option’s ETFs can be traded between 09:33 EST and 16:00 EST, with some being available from 09:30.
MOST OF IQ OPTION’S ETFS ARE TRADABLE BETWEEN 09:33 AND 16:00 EST (15:33-22:00 GMT+2).
*Please note that daylight saving times may cause differences, depending on your location.
With only $10, you can open a real money account with IQ Option!
How to Execute ETF trades on IQ Option’s Platform
1. Choose the ETF you would like to trade by clicking the plus (+) button at the top of the platform, click on “ETFs” and then select the ETF you need:
2. Choose the amount you would like to invest.
3. Choose the amount of leverage you require.
4. Pre-set your stop loss and take profit orders with the “Auto Closing” function (these can also be set after the position has been opened).
5. For pending orders, enter the price at which you would like to enter the market.
6. For a long (buy) position click “Buy”.
7. For a short (sell) position click “Sell”.
About Trading Tools, Indicators, Charts, and Other Platform Features…
With ETF trading, trading tools and technical indicators and can be pretty handy. On IQ Option’s trading platform, you will find the following features:
- Special widgets like Other Traders’ Deals, Traders’ Mood, trading volume, news, and High and Low Values:
- Different chart types, including Heikin-Ashi, candlestick charts, line charts, and bar charts.
- Different time intervals for bars and candles
- Graphical tools:
- Market analysis:
- Video tutorials
- Chats and support
- Technical indicators (oscillators, different moving averages, momentum indicators, etc.):
Free Demo Account - Practice Your ETF Trading Skills
As you may know, demo trading comes first, only to be followed by real money trading when consistent results are achieved. Access to a good demo account is a great advantage, not only for beginners but also for seasoned traders who need to test out a new trading strategy or simply practice a specific skill.
IQ Option’s demo account has all the features and tradable instruments of a real money trading account. This demo account doesn’t expire and traders can switch between their demo and live accounts with ease. An appealing feature of IQ Option’s demo account is that traders can top up this account to its original value at any time, as you can see in this screenshot:
IQ OPTION’S DEMO ACCOUNT IS A GREAT TOOL FOR BOTH BEGINNERS AND EXPERIENCED TRADERS.
If you’re looking for instruments to trade with really low spreads, IQ Option’s ETFs could be a great option for you. ETF trades can be conveniently executed on IQ Option’s trading platform with preset stop loss and take profit parameters if desired. Of course, these trade parameters can easily be modified after trade execution.
With IQ Option’s multi-asset trading platform, traders who desire broad portfolio diversification can effectively combine ETFs with other assets like forex pairs, stocks, equity indices, commodities, and cryptocurrencies. IQ Option’s trading tools, technical indicators, widgets, and other platform features are there to give you a headstart with your ETF trading!