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.

Types of trading options on IQ Option

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

IQ option is popular among South African traders because it has an unsophisticated user-friendly Smartphone app. Traders also receive comprehensive financial reports whose jargon has been laid out in simplistic definitions and graphs are presented in straightforward formats. For just $10 dollars, budding binary options traders will acquire demo trading accounts to sharpen their investment skills. In addition, the IQ option app provides top notch security features to protect users from online financial fraud and account hacking.

The inception of IQ Option

IQ option is a binary international brokerage company founded in 2012 by IQ Option Europe Ltd. It exists to offer a highly secure, simple to use and convenient trading platform for options traders worldwide. Traders require a minimum deposit of $10 dollars to purchase options. IQ Option offers traders with buyback options for all trades within their respective expiry periods. IQ option will offer a lower rate compared to what the trader invested however, it is much better in comparison to the foreseen losses.

IQ Option requires all traders to have attained 18 years of age before signing up on their website.

6 types of trading options in IQ option

1. Commodities binary Options
A commodity binary option is a trade whereby the expected future value of a commodity is projected on a fixed date. Gold and crude Oil are the main commodities traded in binary options market. Let’s assume the price of gold currently stands at $100 dollars an ounce and a trader anticipates a rise in value after 2 weeks. He or she can purchase 4 binary options contracts valued at $20 dollars each since each contract yields $100 dollars. In the event the price of gold increases after a fortnight, the trader will get a gross profit of $400 dollars.

All possible profits and losses are laid out in advance before the trade is made. Commodity binary options have short durations on returns on investments, usually in hours or days.

2. Pair Options

This is a trade whereby the trader selects the best performing company stock paired up against another company’s stock within the same industry. An example of stock pair options is Google/Yahoo because they are two rival firms competing in the Internet services industry. A trader may decide that Google’s stock price will perform better than Yahoo at the close of the week. The trader will receive anticipated profits if Yahoo outperforms Google at the end of the week. On the other hand, losses will be incurred if Yahoo’s stock price drops below Google’s share price at the end of the week.

3. High/Low Options
It is a trade whereby the trader predicts the value of an asset to either rise or fall below a specified figure after a fixed duration. A broker may present a high/low option for gold which he expects to fall below $200 dollars an ounce after a week. Traders who select high option will get a profit if the price of gold reaches or crosses the $ 200 dollar mark after one week.

High/Low options only depend on the rise or fall of prices hence ensuring that traders can receive high returns on investment, even in bear stock exchange markets. Returns on Investment can reach 90 percent and is ideal for short or long term investments.

4.Touch/No touch Options
A trader who opts to invest in touch options is required to predict the magnitude of a rise or fall in an asset’s price. For instance, a trader is certain the price of a barrel of crude oil currently selling at $110 dollars a barrel will rise by $5 dollars at the end of the week. He or she will reap profits if the new price of a barrel of crude oil hits $115 at the agreed time. Traders who purchase this option can reap profits whenever the asset’s price hits the predicted figure before the lapse of the expiry period.

Touch options are ideal for stock exchange markets with high volatility because dynamic external economic forces involved may push asset’s price to the desired level.

5. Range Options
A broker offering this option uses a graph to select parameters where the price of an asset is expected to hit within a specified duration. Let’s assume an investment broker predicts the price of Yahoo’s stock currently valued at $50 to rise by $2-$6 dollars at the end of the first financial year quarter. Any trader who buys this range option knows that he or she will make a profit only if the price of Yahoo’s stock ranges between $52-$56 dollars at the end of the first financial year quarter.

Range options yield a 70-85 percent return on investment. They are easier to predict compared to touch/no touch trading options since the trader is not expected to give the exact magnitude of price fluctuations. Range options are ideal for highly volatile markets where high fluctuations occur regularly.

6. Index Options
An index option is a financial security composed of more than five different companies’ stocks belonging to the same industry. The group’s performance is represented using an aggregated index derived from each company’s individual performance in the stock exchange market. Traders make profits by correctly predicting index movements in the stock exchange market.

Index options are stable because the group’s index is immune to fluctuations attributable to minor events such as a company’s quarterly reports. Purchasing an index option is significantly cheaper compared to purchasing a set number of shares from all individual companies belonging to the index group.

IQ Options’ solutions to challenges faced while trading options

  • Providing a jargon-free app that presents information in simple terms which novice traders can easily understand. Instructions and investment suggestions on IQ Options’ app are short, simple and precise.
  • The loss cap feature prevents a trader from incurring additional losses. It works by preventing purchases on trading options on a losing streak. A South African trader can also engage the buyback feature on trading options with lengthy expiry periods.
  • Provision of a personal binary manager for VIP account holders.
  • Provision of the autopilot trading feature that enables South African traders to make simultaneous trades. The autopilot feature helps South African traders generate passive income because it is active all day long.
Free Demo Account
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.

Conclusion

IQ Option is best suited for potential traders in South Africa because it’s rich in educational material. Regular trading in demo accounts fast tracks learning and is a great tool for enhancing a trader’s confidence.

Author info:
Kungawo
Author: Kungawo
Kungawo is from: South Africa, Cape Town
Please be advised that certain products and/or multiplier levels may not be available for traders from EEA countries due to legal restrictions