Online trading platforms usually provide a wide range of financial assets. On IQ Option you may choose to trade binary and digital options, forex, commodities, cryptocurrencies. There are also exchange-traded funds in its offer. If you wonder what ETFs are and how to trade them, this article is just for you.
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ETFs basics
Exchange-traded funds are connecting many securities in a single asset. You trade it the same way you do with individual stocks although one ETF may hold a collection of stocks, currencies, commodities and others.
A good thing about ETFs is that you have a chance to get exposure to a particular group of instruments or market sector by purchasing a single ETF instrument. For instance, if you think you can get high profits by investing in the technology industry, all you need to do is to buy IQ Option's Technology Select Sector Fund. You do not have to worry about all the technicalities and follow the situation in many markets simultaneously. You obtain broad exposure simply by buying ETFs.
Another advantage is that the shares are not expensive. You can afford them even with small capital.
ETFs are available during all trading hours and you can buy or sell them, according to your needs and speculations.
How to trade ETFs on the IQ Option platform
Trading ETF on IQ Option is an uncomplicated process. You can do it from your preferred device as IQ Option is accessible not only via its website but also through desktop and mobile apps. This makes it easy and convenient for users to trade anytime they want.
You can choose from among 23 various exchange-traded funds on the IQ Option platform. They give you exposure to multiple market sectors such as energy, technology, metals, utilities, semiconductors, global stock indices, futures volatility or emerging markets. Probably more instruments will be added in the nearest future.
ETFs spreads on IQ Option are rather tight. We call them floating spreads because they may fluctuate throughout one trading session several times.
If you are in the European Union you must obey the European Securities and Markets Authority (ESMA) regulations. This allows you to use the multiplier of a maximum of x5. If you are, however, outside the EU and pro-EU you get the possibility of applying the multiplier as high as x20.
When to trade
A period of time during which you can trade ETFs on the IQ Option platform is synchronised with the New York Stock Exchange opening hours which means from 09:30 EST to 16:00 EST.
Step by step guide to trading ETFs on IQ Option
Log in to your IQ Option account and follow the steps described below in order to master trading ETFs.
- On top of the platform, there is the plus button. After clicking on it, you will be able to choose the asset you wish to trade. Find ETFs and when you select them, the list of available exchange-traded funds will be displayed on the right side. Choose a specific ETF.
- The next step is to decide on the amount of money you want to invest in this particular trade.
- Then, choose a multiplier. The height of the leverage will differ depending on the region from which you are trading, as was said before. Remember, that this function not only increases your profits but also eventual losses.
- There is an Auto Closing field beneath. Here, you can define stop loss and take profit for your transaction. You can use this option later on, while the position is already being opened.
- Determine the price level at which you would like your trade to be entered if you are using the pending orders feature.
- Hit the Buy button if you wish to go long.
- Click the Sell button if you are selling.
Summary
IQ Option has a wide offer of financial instruments and you will find ETFs among them. The process of trading ETFs is very simple and small capital is needed. It is possible to open a real IQ Option account with just $10. And a single ETF share you can purchase for just $1.
I would like to remind you that practice is the best teacher. Therefore, you should try trading ETFs on the demo account first. IQ Option offers it to its users without charging any extra costs. You will be able to test your skills and find out which assets and which hours works best for you. So this is a great option not exclusively for beginners but for professionals as well. Here traders can introduce new strategies or adjustments to the old ones.
Tell us about your experience with ETFs in the comments section below. Have you ever traded exchange-traded funds? Do you find it easy? What obstacles did you have to overcome? I cannot wait to hear from you.
Enjoy trading ETFs!