Binary and digital options are prohibited in EEA.
Please be advised that certain products and/or multiplier levels may not be available for traders from EEA countries due to legal restrictions.

IQ Options Licensing

Your capital may be at risk. This material is not investment advice.

The popularity of IQ options as an investment method has grown exponentially over recent years. Also known as digital options, IQ options are a type of financial security that yield a fixed payout over a specific time period. The trader tries to predict whether the price of a chosen asset will increase or decrease beyond a predetermined price within a set time frame.

Trading in digital options has become quite prominent among traders. This is mostly due to traders becoming more educated in this relatively recent method of trading, as well as the infiltration of IQ option brokerage firms into the market. One can trade various assets through digital options, such as stocks, commodities, currency pairs and indices.

Explaining how IQ Options trading works

digital options trading is basically a ‘yes or no’ proposition, with each trade resulting in one of only two possible conclusions. This standardisation makes this type of trading uncommon because a trader is able to predict the loss or reward expected. It is a low risk, easy way for traders to start learning about markets and trading.

One starts by selecting the asset they would like to trade on. Taking into account extensive prior knowledge of how the asset performs in the market, the trader then makes a prediction on whether or not the asset’s price will go above or below a set price limit within a preset time frame.

If the trader’s wager is correct, they receive a payment comprising the amount they invested plus the value of the return rate. If not, they receive no payments and lose their initial investment.

In South Africa, online trading is legal but unregulated. Because of this, South African traders can only work with foreign brokerage companies to carry out IQ options trading. Traderss can find the whole process a little confusing, especially when choosing the right broker to work with.

IQ Options Licenses

The best way to do this work with brokers that are registered and licensed properly. The question then becomes, what types of license should a reliable broker have?

Different countries have various regulations to guide only IQ trading within their jurisdictions. Most online brokers today are based out of Europe, the U.S, Australia and the Middle East.

IQ Option Licenses in Europe

The Securities and Exchange Commission in Cyprus granted the first operating license to a digital options broker in 2012. Even today, the CySec license is a great indicator of whether or not a broker is reputable and properly regulated.

The CySec allows the licensed company to operate legally within any of the 27 countries within the European Union. Reports indicate that other EU states will soon follow suit. Some like Italy have already begun blocking the IPs of unregistered companies.

In the UK, digital options trading is fully licensed and regulated. To be licensed, brokers must already be operating duly licensed Forex bureaus and intend to open IQ trading divisions within them.

IQ Option Licenses in the United States
When digital options were approved for trade by the U.S Securities and Exchange Commission, they were first listed on the Chicago Board of Trade, CBOT.

Here, the practice is well-regulated but quite unaffordable to investors who are only able to trade with small amounts of money. These listed options are usually used by either banks or hedge funds in order to make their portfolios more diversified.

The Nadex is a much more affordable and uncomplicated option for traders who want to invest in the U.S market.

IQ Option Licenses in Australia
The Australian Securities and Investment Commission (ASIC) does not have any clear, defined licensing equations or requirements for digital options trading. Both local and offshore brokers can legally operate within the country.

IQ Option Licenses in other jurisdictions
digital options trading is not regulated in either Africa or the Middle East. South African traders should be aware of a new crop of brokers popping up claiming to be compliant with Shariah law or offering specialised options. These may include Hibbah, or a provision that allows for gifts to be given voluntarily without any expectation of receiving anything in return; or the no Riba policy, which allows a trader to hold a certain trade open for an undefined length of time.

Hong Kong, Singapore, and Japan have a defined regulatory framework in place to guide digital options trading.

Conclusion

IQ options trading is one of the easiest and most profitable methods of trading available today. A trader can use it to lay a proper foundation for future work in securities. However, its potential benefits should not cloud a traders mind: traders should work with properly licensed and registered brokers to ensure long-term success.

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The financial products offered by the company carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose.
Please be advised that certain products and/or multiplier levels may not be available for traders from EEA countries due to legal restrictions