FX Options Versus Binary Options at IQ Option – What are the Differences?

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FX Options Versus Binary Options at IQ Option – What are the Differences? What are FX Options and why do you need to give them a try? In today’s article we take a closer look at the most recent addition to the palette of IQ Option broker trading instruments. FX Options combine features of regular options and Forex. Already interested?

IQ Option Broker Detailes:

  • Minimum Deposit is $10
  • $1 Minimum Trade Size for Binary Options & 30$ Minimum Trade Size for FX Options
  • Demo Account Without Deposit – Click Here To Open an Account
  • Great Trading Platform for Crypto, Forex, Stocks and ETFs along with Binary Options, Digital Options & FX Options!
  • up to 95% Profit (*) – Amount will be credited to account in case of successful binary options investment!
  • Great Trading Tournaments Every Month – (*) Tournaments are subject to Terms & Conditions and clients residing in the European Union can’t acces to Trading Tournaments
  • IQ Option Best Binary Options Broker. Trade Crypto, Forex, Stocks and ETFs

Click on the button below to open an IQ Option account now:

IQ Option Best Binary Options Broker. Trade Crypto, Forex, Stocks and ETFs

Strike Price

With binary options, traders can only trade at the current strike price of the options contract but with FX options, they can choose between a number of different strike prices which are available at that particular time.

Risk to Reward Ratio

Each binary option contract offers a reward that is less than the possible loss. For example, with an investment of $100 in a binary options contract with a profitability percentage of 90%, a trader will gain $90 (at expiration) in the case of a winning trade and lose $100 (at expiration) in the case of a losing trade.

Certain binary option contracts can be closed prematurely. In this case, the loss may be less than 100% of the investment amount in the case of a losing trade and the profit (in the case of a winning trade which is closed prematurely) will also be less than the maximum profit which might have been gained at the time of expiration.

On the other hand, FX options have the advantage of much more flexibility when it comes to risk to reward ratios. On each individual FX options contract, traders cannot lose more than the amount they invest. However, because they can choose the strike price, they have the ability to alter the risk to reward ratio. So instead of being limited to a maximum payout of, for example, 90%, they can achieve gains which are basically unlimited.

Contract Duration / Expiration Times

There is a notable difference between the expiration times available with binary options and FX options. IQ Option’s binary options (excluding OTC binary options) can be traded with expiry times that vary between 30 seconds and 30 days. There are a couple of expiries between 30 seconds and 10 minutes as well as two longer contracts, namely ‘end of the day’ and ‘end of the month’.

FX Options have expiry times of one hour and lower. So, the big difference is, that with FX options, you don’t have access to the ‘end of the day’ and ‘end of the month’ expiries like you have with binary options.

Trading Availability Throughout the Week

While FX options can only be traded 5 days a week, certain binary options can be traded over weekends when FX options (and standard binary options) are not available. These instruments are called OTC (over the counter) binary options.

Currency Pairs / Instruments Available

When comparing FX options with binary options, we find that IQ Option offers many more binary options than FX options. With binary options, clients can trade roughly 34 currency pairs, 22 stocks, two stock indices, and gold. On the other hand, FX options are currently available in 6 currency pairs. The number of instruments available in binary options and FX options can change at any time, and IQ Option will probably add more currency pairs to the group of FX options soon.

Regulation

Retail traders from the European Union are not able to trade binary options and digital options with IQ Option due to ESMA (European Securities and Markets Authority) regulations. On the other hand, retail EU traders are able to trade IQ Option’s FX options which comply with ESMA’s regulations.

With FX options, IQ Option has made a way for retail EU traders to trade a type of options contract that replaces the binary options that were previously available to them!

 

FX Options Versus Binary Options at IQ Option – What are the Differences?

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