IQOption Review 2022

Trust

IQ Option Regulation

In our reviews, we examine the licences and regulations of each entity operated by a broker. This allows us to compare each entity’s different levels of protection. We rank licences by various regulatory bodies on a three-tier system, where tier-1 licencing indicates the highest level of regulation.

This is what we found concerning IQ Option’s two entities and their licences and regulations:

• IQOption Europe Ltd. is licenced by the Cyprus Securities and Exchange Commission (CySEC) under licence number 274/14. CySEC ranks as a tier-1 regulator on our system.
• Digital Invest Ltd. is licenced by the Financial Services Authority (FSA) in Seychelles under licence number SD085. The FSA is a tier-3 regulator.

We have summarised the most essential aspects of IQ Option’s entities in terms of regulation and safety in the table below:

Why is it Important to Know Where Your Broker is Regulated?

The criteria a broker may be required to meet in order to get authorised differs from regulator to regulator, subject to differences in the legislature. Some offshore regulators are concerned with attracting foreign capital, which is why they may have much more relaxed requirements for brokers, which may ultimately increase retail traders’ risks.

Here is a list of what traders need to be looking for in a safe broker:

• Segregation of client funds. In order to mitigate the risk of accounting errors, brokers keep their clients’ funds in separate bank accounts from the ones they use for their own corporate funds. Both of IQ Option’s entities comply with this requirement.
• Negative balance protection. Negative balance protection ensures that a trader’s losses may never exceed the total funds available in their account. Both entities ensure this.
• Compensation scheme. If the broker becomes insolvent, a client of the company may be reimbursed for losses incurred due to the broker’s credit risk. IQOption Europe Ltd. is a member of the Investor Compensation Fund (ICF), and retail traders with the entity may be compensated for losses of up to 20,000 EUR. Digital Invest Ltd.’s clients are not liable for such a compensation scheme.
• Maximum leverage. The leverage increases a trader’s market exposure. It multiplies the potential profits and losses of a trade, depending on where the market goes. IQ Option’s European entity has a maximum leverage of 1:30 for retail traders, effectively capping the risk from adverse fluctuations. However, the maximum leverage all traders may choose with the broker’s other entity is 1:1000. The problem with such a massive leverage is that even very small fluctuations in the price may result in huge losses, diminishing the total control a trader may exercise over their positions.

Is IQ Option Safe to Trade With?

IQ Option’s two entities are both safe, though there are discrepancies between the two. IQOption Europe Ltd is safer because the entity is licensed by a top-tier regulator, has negative balance protection, segregated funds, and an investor compensation scheme. Its leverages are also quite reasonable, meeting the requirements of the MiFID II directive.

What we found particularly evocative of the high level of safety of the entity is that before you can set up an account with IQOption Europe Ltd., you are asked to state your level of risk-aversion. Almost all brokers are required to place risk warnings on their websites, but IQ Option is a lot more unambiguous in that regard than others. Traders who want to trade with funds they cannot afford to lose will not be permitted to open an account.

Regarding IQ Option’s other entity, traders should remember that Digital Invest Ltd does not have a compensation scheme, and its maximum leverage is way above the industry standard.

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, the company’s size, and how transparent they are in terms of readily available information. We found IQ Option’s T&Cs section to be very detailed and informative.

A distinction between IQ Option’s two entities should be drawn in relation to their transparency levels. While the European entity is very transparent, with clear risk warnings and regulation information, the overseas entity is somewhat less so.

While there is a ‘Regulation’ section on the European entity’s website affording quick access to its CySEC licencing, the overseas entity does not have such a component on its website. Also, we discovered a discrepancy between Digital Invest Ltd.’s address information as presented on the website and what is stated in FSA’s register.

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

• At least one of its entities is licenced by a top-tier regulator
• Both entities ensure negative balance protection and segregation of client funds
• The European entity’s website is very transparent

Fees

The broker’s spreads on most FX pairs are low to medium, while its spreads on commodities are medium to high, the same as for stocks. IQ Option’s overnight charges are also reasonable. Regarding its non-trading costs, there is an inactivity fee charged on dormant accounts. Deposits are free of charge, while withdrawals via wire transfer may be liable for a commission of $31.

Traders do not have to pay commissions or financing fees for trading CFDs or options. However, there is a premium payable for executing FX options. Additional information is available here.

IQ Option Trading Fees

IQ Option Spreads

We tested IQOption Europe Ltd.’s spreads during the London open at 8am UK time and just after the U.S. open at 2.45pm UK time. These are the most actively traded times. The test was conducted on the 1st of July 2022.

IQ Option’s floating spreads vary throughout the day, subject to changing market volatility. We found that they tend to be lower during the London session but surge later in the day. What should be mentioned is that the spreads were measured on a Friday. Typically, liquidity drops after the U.S. market open on Fridays, which naturally leads to heightened spreads. But in IQ Option’s case, this upsurge was not very dramatic.

Overall, IQ Option’s spreads on some of the more commonly traded instruments can be quite competitive when trading activity peaks, though at other times, they can be medium to average compared to the broader industry. You can get some general idea about IQ Option’s spreads here.

IQ Option’s Swap Rates

A swap fee is a trader’s cost for holding an open position overnight because of changing interest rates. Swap long refers to the charge deductible or credit receivable for holding a buy position open overnight. In turn, swap short relates to the charges/credits deductible or receivable for holding a selling position open overnight.

The values listed below are for one full contract (100,000 units) of the base currency.

IQ Option’s Non-Trading Fees

An inactivity fee is charged on dormant accounts that have not registered any activity for at least 90 consecutive calendar days. After that period, the inactive account will be charged 10 EUR monthly until activity resumes or the account balance drops to zero. Any dormant account on which no activity has been registered for a period of 12 months may be deactivated. Additional information is available here.

While deposits are free of charge, traders will not be compensated by the broker for any banking transfer fees. For withdrawals via wire transfers, traders may be required to pay a commission of $31 or an equivalent in another currency, depending on the country. Withdrawals via credit/debit cards or e-wallets are free of charge.

Are IQ Option’s Fees Competitive?

IQ Option’s fees can be competitive in certain cases. The lack of commissions on CFDs coupled with the typically lower spreads on assets after the UK open mean that traders are likely to get the most reasonable conditions then. They can also avoid most of IQ Option’s non-trading costs by staying active and choosing the most cost-effective payment methods.

Platforms and Tools

IQ Option’s web trader platform, desktop, and mobile app versions have a very easy-to-use interface, allowing traders to switch between charts and other accessories quickly. Different types of traders – scalpers, hedgers, intraday, day, and position traders – are provided all the tools they may require to conduct thorough technical analyses.

The platform can accommodate automated trading, but social trading – also known as copy trading – is not permitted.

IQ Option’s Web Trader Platform

General Ease of Use

In addition to all of the standard industry features, such as watch lists, account information, and available tools, IQ Option’s platform has several very useful customisable features. Traders can modify the chart’s layout, which is handy when conducting multi-timeframe analysis. As shown in the above image, traders can select the number of charts on the main screen and the order in which they appear.

Traders can use this feature to open several charts with different periods on the same instrument. This allows them to quickly observe the behaviour of the underlying price action in the short and long terms. They can thus examine the broader market sentiment while looking for a good entry level to place an order.

Charts

The functionality of IQ Option’s charts is great because traders can spot discrepancies in the price action very easily, allowing them to filter out misleading movements. For instance, as shown above, the 4H-chart on the top-left corner underpins a Hammer candlestick near the bottom of the last downtrend – a bullish signal.

The hourly chart on the right reveals a Bullish Engulfing followed by several Doji candles, signalling a mostly neutral bias. Meanwhile, the 30-Min chart below underscores a currently emerging consolidation range.

Another great feature is the possibility of modifying not only the timeframe of the chart itself but also of each separate candlestick. The three charts above all have the same timeframe – 1 day – however, the individual candlesticks differ. Traders can thus scale up or down the price action from two different angles, changing the charts’ level of detail. In other words, traders can determine how much information they want to view at any given time.

Here is a breakdown of the features of IQ Option’s charts in numbers:

• Trading indicators. The platform incorporates 100 trading indicators, which is above the industry average. IQ Option has separated them into different categories – volume, momentum, trend, volatility, and moving averages – so traders can quickly pick the particular type they need depending on the prevailing market sentiment. And when you mouse over a particular indicator, a bubble appears with information about its applicability. The platform thus serves also as an educational tool.
• Drawing tools. There are only 5 drawing tools available on the platform, which is arguably its weakest aspect. This lack of variety means that traders have limited ways in which they can outline specific formations in the price action. Nevertheless, they may choose from the most essential ones, such as various lines and the Fibonacci retracement levels. Traders can use those to underscore the direction of an existing trend, potential breakout or breakdown points, and the most important support and resistance levels.
• Timeframes. There are 18 candle time periods and 7 chart timeframes, amounting to a total of 126 different combinations in which price action can be scaled up or down.
• Chart types. Price action can be represented in 4 different ways – as a line, with candlesticks (hollow or full), bars, or Heikin-Ashi.

Orders

Traders can also choose the type of market exposure they want to gain from the following order types:

• Market orders. They are used for immediate entry at the best possible price. Market orders guarantee volume filling though there could be a discrepancy between the requested price and the price where the order actually gets filled.
• Limit orders. They are placed at a price level different from the current spot price. Limit orders guarantee exact price execution, though there is no guarantee of volume filling.
• Stop orders. Stop orders are usually used in support of a primary position. For instance, stop-loss orders are placed at a distance from the initial entry of a primary position in order to cap the potential loss that would be incurred if the price action goes against the primary position. Once the price action reaches a stop order’s execution price level, it transforms into a market order and then gets filled at the best possible price.
• Expiry orders. Traders can use expiry orders to set a date on which the underlying trade is to be closed automatically if it already hasn’t been filled or cancelled by that date.

IQ Option’s Mobile App

IQ Option’s mobile app is probably as flexible as apps can be, given that technical analysis is best carried out on large-resolution devices. The app retains the functionality of the web trader version of the platform, consisting of the same amount of indicators, drawing tools, and other supporting features. It is best suited for monitoring and managing open positions, particularly on the go.

General Ease of Use

IQ Option has recognised the problem of running complex charts on small-screened devices since its app is built with a very efficient design. The platform’s layout is in landscape rather than portrait, which is an inventive way of maximising the amount of information that can be telegraphed without making it hard to read.

Charts

Here is a rundown of the most significant features of the mobile app:

• Trading indicators. The app incorporates 100 indicators, allowing traders to examine different aspects of price action under varying conditions.
• Drawing tools. There are 5 drawing tools, including trend lines and Fibonacci retracement levels, which can be used to determine vital support and resistance levels, as well as potential breakout or breakdown areas.
• Timeframes. There are 18 different candle time periods and 7 chart timeframes, amounting to a total of 126 different combinations in which price action can be scaled up or down.
• Chart types. Traders can choose how to represent price action from 4 options – as a line, using bars, candlesticks, or Heikin-Ashi.

Orders

IQ Option’s mobile app affords some of the most popular order types:

• Market orders. They guarantee volume filling at the best possible price (the closest to the requested price), depending on the underlying liquidity levels.
• Limit orders. Limit orders guarantee precise price execution, though the order itself may not get filled if the spot price does not reach the limit order’s execution price. Unlike market orders, which are filled around the spot price, limit orders are placed either above or below the spot.
• Stop orders. Stop orders are triggered when the price moves to a predetermined level, in which case they get transformed into market orders and filled at the best possible price. They are typically used to support a primary position. For instance, stop-loss orders can effectively close an existing trade if the market goes against it by a certain margin.
• Expiry orders. Traders can use expiry orders to set a date on which the underlying trade is to be closed automatically if it already hasn’t been filled or cancelled by that date.

Tradable Instruments

IQ Option offers over 120 instruments from different asset classes, including cryptocurrencies and ETFs. Those can be traded as CFDs, FX options, binary and digital options. However, the variety is not great. There is a reasonable amount of currency pairs and stocks, but there are only 3 commodities and no indices. And given that IQ Option’s spreads on most stocks are medium to high compared to the industry, this leaves traders even more limited in their choice.

On the other hand, we found IQ Option’s ‘Industries’ section especially useful. Traders wanting to trade the shares of a particular company can learn how the industry it belongs to performs as a whole. Moreover, they get important information about the company, like its market capitalisation and its latest share price change. All of this information can be very helpful when looking for an instrument to trade next.

What are CFDs?

Contracts for difference (CFDs) are derivatives used to speculate on the price of an underlying without physical delivery. For example, a long position on gold would generate a profit as the price rises or incur a loss as it falls. This is achieved without having to purchase actual bars of gold. One of the biggest advantages of trading CFDs is that traders can get in and out of the market almost instantaneously, thereby catching even minute changes in the price of the derivative.

What Can You Trade With IQ Option?

We have broken down IQ Option’s tradable instruments by type:

• 33 Currency Pairs
  • Majors, Minors, Exotic
• 3 Commodities
  • Gold, Crude Oil WTI, Crude Oil Brent
• 192 Stocks
  • Financials, Energy, Retail, and Others.
• 14 FX Options
  • Majors, Minors
• 12 Cryptocurrencies
  • Majors, Minors
• 23 ETFs
  • Various

A similar categorization can be found on IQ Option’s platform. For instance, traders can opt to sort their lists of instruments from different asset classes by popularity. The selection process for what instrument to trade is thus enhanced, which is important in such a dynamic environment.

In addition to CFDs trading, clients of IQ Option can also trade the available instruments using options. The broker offers three types of options trading – FX options, binary and digital options. FX Options are available to retail traders and resemble vanilla options. They give the trader the right but not the obligation to be exercised at a pre-determined exchange rate (of the underlying currency pair) at a future date. Options are purchased by paying a premium.

Binary and digital options are available only to professional traders. The former are exotic derivatives instruments with a fixed potential payoff and a single strike price (the spot price). Traders either get that fixed amount or nothing at all. Digital options, in contrast, can have multiple strike prices.

Binary options are extremely risky instruments because they give traders little control once placed. They are nevertheless very popular amongst high-risk takers and gamblers because they can generate huge returns in a very short time. Additional information can be accessed here.

Customer Support

IQ Option’s Customer Support Test

When we test a broker’s customer support team, we evaluate the agent’s knowledge of their website, how long it takes them to respond to questions, and how detailed their answers are. IQ Option’s support performed very well in all components.

We conducted our test on the 29th of June at around 3 pm via the live chat feature available in the main page’s bottom-right corner. Once you open the chat box, you are asked about the nature of your inquiry. If you have a more general question you may be redirected to the FAQ section. If not, you may request to be connected to an operator.

An agent connected almost instantaneously after our request was made. She was very polite and attentive, trying to understand our question about the two timeframe features available on IQ Option’s platform. She was very diligent and asked about a screenshot. She then provided a detailed answer with supporting information and a screenshot of her own.

Deposit and Withdrawal

IQ Option Deposit Methods

IQ Option Withdrawals

IQ Option affords some of the most popular payment methods in the industry. It does not charge any fees on deposits but will not compensate traders for any banking fees incurred from third parties. Withdrawals are also free of charge except for wire transfers, which may be liable for a $31 commission. Withdrawal processing times are also slightly higher than the industry average.

Account Types and Terms

IQ Option offers a one-size-fits-all account type to all retail traders with no limit on the available base currencies and no minimum deposit requirement. The lack of diversity is compensated by a combination of commission-free trading and floating spreads. Professional traders can gain access to higher-risk/higher-yield assets, such as direct and binary options, but they may lose some of the advantages of the standard retail account. You can find additional information here.

Swap-free trading is not permitted on IQOption Europe Ltd.; however, traders may open Islamic accounts with the broker’s other entity – Digital Invest Ltd.

Why is Choosing the Right Account Type Important?

In most cases, choosing the right account type boils down to a choice between low spreads/high commissions account types or vice versa. In IQ Option’s case, however, there is no such trade-off. High-frequency traders with large account balances and sufficient experience should instead consider whether to apply for a ‘professional’ status, granting them access to IQ Option’s exotic instruments.

When looking for the right account type, traders need to consider not only the costs but also the risks and benefits entailed by each possibility; it is, therefore, a question of means, trading goals, and risk-aversion. The proper account type should ultimately match a trader’s personal trading style.

What Account Types Does IQ Option Offer?

There are significant discrepancies between the two account types. The accessibility of the standard retail account is a lot greater since there is no minimum deposit requirement, while professional traders should have portfolios with massive sizes. One additional benefit of IQ Option’s retail account is that it is covered under the investor compensation fund (ICF). Professional traders, in contrast, can opt for bigger leverages. They are also charged with lower spreads and have access to high-risk instruments.

What is CFD Leverage?

The leverage determines a trader’s overall market exposure. When trading Contracts for Difference (CFDs), positions can be opened for a fraction of their value because of the leverage. Essentially, the broker lends the trader money so that the latter can open bigger-sized positions. The leverage multiplies the profits a trader generates from winning positions and losses incurred from failed trades.

IQ Option Account Opening Process

We have summed up the steps of opening an account with IQ Option:

• Step 1 – To start the registration process, click the ‘Sign Up’ button in the top-right corner of the main page. You’ll first have to state your country of residence, email address, and enter a password. Alternatively, you can use one of your social accounts, such as Facebook or Google. After you click ‘Proceed,’ a live account and a demo account will be opened for you.
• Step 2 – Immediately afterwards, you will have to verify your email by clicking the link that has been sent to you. Next, you will have to fill in personal information, such as your name, address, and citizenship.
• Step 3 – You will then have to complete the ‘Background & Experience’ section, where you will be asked whether you are looking for short-term/high-risk/high-return products or for capital preservation and long-term investment products. This is IQ Option’s way of ensuring that traders are familiar with the risks.
• Step 4 – Then, you’ll have to complete the remaining sections: ‘Investment Appetite’, ‘Annual Income’, ‘Net Wealth’, ‘Anticipated Annual Investment Amount’, ‘Preferred Payment Method’, and ‘Main source of funds’, as per the KYC policy.
• Step 5 – Finally, you will have to provide information regarding your trading experience and answer some questions in order to demonstrate your knowledge level.

Why is a Demo Account Important?

Demo accounts are crucially important for two reasons. Firstly, they allow traders to test out the broker’s services in a safe environment before they move forward with funding a real account. Secondly, demo accounts allow traders to periodically test the performance of their strategies and tweak their parameters in order to adapt them to the ever-changing market conditions.

Traders signing up for a live account with IQ Option are automatically given a practice account as well.

IQ Option Supported Countries

IQOption Europe Ltd. accepts clients from the following countries: Austria, Bulgaria, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Saint Vincent and the Grenadines, Seychelles, Bahamas, and The Netherlands.

Digital Invest Ltd. does not accept clients from the following countries: Afghanistan, USA, Canada, Australia, Israel, Palestine, Japan, Syria, Iran, North Korea, the Russian Federation, the United Kingdom, Belarus, Gibraltar, Ukraine, Gibraltar, and any country of the European Economic Area.

Research

IQ Option’s news feed section contains a pool of third-party market breakdowns and analyses of current developments, which traders can use to screen the most important trading opportunities. The feed section is equally well-suited for newbies and seasoned traders.

IQ Option did not receive a higher grade because it no longer has research webinars, and its technical analyses do not say how much the price of a given asset could appreciate or depreciate next.

Research Tools

In addition to the news feed section, IQ Option’s research content falls into several other categories:

• Technical analyses. Traders can read about the prevailing market sentiment on a given instrument directly from the platform. IQ Option’s technical analyses do not explicitly suggest the likely future direction of the market; however, they show the underlying buying and selling pressures and the main pivot points. Traders can use the technical breakdowns to determine the key battlegrounds between bullish and bearish pressures on charts with different timeframes.
• Economic calendar. Also accessed directly from the platform, traders can use the calendar to inform themselves about the economic releases that are likely to move the market in the near future.
• Industries segment. The stocks offered by IQ Option are segregated by industry. When you pick a particular industry from the list, you will see the market cap of each company and the percentage change in its share price. This tool is important because it affords traders a quick look at the current performance of the individual companies, as well as a general idea about the industry’s current state as a whole.
• Stock collections. Traders can also pick stocks based on some other factor, such as ‘The Biggest U.S. Aerospace Companies’ or ‘Warren Buffett’s Favourites’, from the stock collections catalogue.

Education

IQ Option has multiple educational videos on its website and YouTube channel, covering the basics of trading and the proper use of the platform. The YouTube channel is also where you can access its webinars. There is also an excellent blog section on the website, containing hundreds of highly informative articles on different trading and investing topics. IQ Option’s articles include lots of supporting images and charts, making the materials more accessible to traders with varying levels of knowledge.

The Bottom Line

IQ Option is a derivatives broker offering CFDs and options trading to retail and professional traders from Europe and elsewhere. Its European entity is reputable owing to its CySEC licencing, while a tier-3 regulator authorises its other entity.

The broker has an excellent custom-built platform that can be used to carry out probing technical analyses. It incorporates multiple unique features that make the platform stand out with its flexibility and ease of use. IQ Option also has extensive research and education materials and excellent customer support; its trading costs are also reasonable.

Where the service of the broker does not impress is in regards to the tradable instruments it offers. There is not a great variety, and even though professional traders can trade with binary and digital options, retail traders are somewhat limited in their choices. There are no indices, only three commodities, and a moderate amount of FX pairs that can be traded as CFDs.

We found IQ Option suitable for both beginners and experienced traders, even though it does not offer social trading. Its comprehensive educational and research materials can cater to the needs of traders with varying degrees of experience, while the sophisticated platform provides a seamless trading experience.

FAQ

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money