Home Brokers comparison IQ Option vs. Plus500 in 2021 (Comparison of Forex Brokers)

IQ Option vs. Plus500 in 2021 (Comparison of Forex Brokers)

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Account Types

Account Type Minimum Deposit Minimum Trade Size Maximum Leverage Spread
Standard$1000.01 (micro lot)200:12 pips fixed

Specializing in CFD’s (contracts for difference), Plus500 offers a wide variety of trading tools, including ETFs, indices, commodities, shares, Forex, and options. For more information about Plus500 read the full review.

Company Information and Regulation

Company Country Regulation
Plus500Cy Ltd.CyprusCySEC
Plus500AU Pty. Ltd.Australia / New ZealandASIC / FMA
Plus500UK Ltd.UKFCA
Plus500 Ltd.IsraelISA
Plus500SG Pte. Ltd.SingaporeMAS
Plus500SA Pty Ltd.South AfricaFSB

Based in the UK, Plus500 is regulated by the Financial Conduct Authority (FCA). That is a significant point of strength for Plus500 as the Financial Conduct Authority is one of the most highly respected and most rigorous authorities in the world. There are only two account types at Plus500; the first is the free demo account, the second is the live account.

For example, FCA-licensed brokerages must report all of their financial details to the Financial Conduct Authority, maintain client funds in a segregated account (from company funds), and protect their clients through an insurance program. That insurance program is the FSCS (Financial Services Compensation Scheme). All brokers registered with the FCA must contribute to this compensation fund. In the unfortunate instance of one of the brokers possibly going bankrupt, the money in that fund is paid to the clients of the defunct brokerage.

Plus500 is regulated by six different authorities and is listed on the London Stock exchange. Each of the seven points is important when considering the safety of your money when investing with Plus500. Regulation is the defining characteristic of a broker in determining whether or not your money will be safe with them. Generally speaking, the more authorities that actively regulate a broker, the safer it is for you to invest with that broker.

In addition, Plus500 is part of a larger group with subsidiaries all around the world, including Israel, Cypress, Australia, South Africa, New Zealand, and Singapore.

The trading portfolio available at Plus500 includes over 2,000 instruments. That is possible through the CFD’s (Contracts For Difference) which allow clients to trade an index, Forex, commodity, stock, or ETF without necessarily owning the asset. In short, a Contract For Difference bets on the price movement of a particular asset, not on the asset itself.

Trading Conditions

Minimum Deposit

Plus500 requires a minimum deposit of £100. For beginning trader, this may seem like a lot. However, for most UK brokers, this is pretty much average with FX Pro requiring a $500 deposit and FXCM requiring a $50 deposit. Some brokers don’t require an initial minimum deposit at all, but they usually have higher fees.

Maximum Leverage

When discussing CFD’s, the maximum amount of leverage is an essential topic. At Plus500, the maximum leverage level changes based on the type of instrument. For example,

  • Indices – up to 1:290 for leverage;
  • ETFs – up to 1:100 leverage;
  • Commodities – up to 1:150 leverage;
  • Forex – up to 1:200 leverage.

Taken as a whole, these leverage rates are pretty average. For example, FX Pro offers a leverage of up to 1:500, and FXCM offers leverage of up to 1:200. Beginning traders should be reminded that while leverage can increase potential profits, it can also increase potential losses. For this reason, there are often further limitations placed on leverage in most countries, including Japan (1:25), Poland (1:100), and the United States (1:50).

Spreads And Commissions

A typical spread at Plus500 for the EUR/USD currency pair is a fixed 2 pips. At FX pro, the same spread is around 1.8 pips, and at XM, it’s 1 pip (though that rate is variable by volume).

Commissions are also a thing of the past at Plus500 and are not charged for CFD trades. In contrast, CMC Markets charges a commission of 0.10% of the volume traded.

Risk Management Options

As stated above, leverage causes both potential profits and potential losses to be significantly increased. For this reason, most Forex and CFD brokers offer risk management tools to their clients.

Guaranteed Stops

One of the tools provided to traders is called a “guaranteed stop.” A guaranteed stop is a risk management tool that automatically ends a trade when either a particular percentage of profit is earned or when a loss is incurred. In other words, as soon as your investment reaches a specific value, you can program the system to automatically close your position.

Negative Balance Protection

Plus500 offers a security called “negative balance protection.” Negative balance protection is a security on your account that ends all positions as soon as your total account balance reaches zero. The benefit of this feature is significant. Without negative balance protection, if you open a position on leverage, that then incurs a loss beyond the amount of money you have in your deposit, you could end up owing the broker a significant amount of money. To avoid that, negative balance protection stops all trades as soon as your equivalent balance deposited reaches zero.

Trading Platform

At most brokers, there are many trading platform options available for clients to use, including cTrader, SuperTrader, MetaTrader 4, and MetaTrader 5. However, Plus500 does not offer any of these platforms and instead offers its proprietary trading platform only.

That trading platform is available in 31 languages and has mobile, web, and desktop versions for the most common operating systems, including iOS, Windows, Android, macOS, and Chrome.

While MetaTrader4 is considered the industry standard in Forex trading, the platform at Plus500 is well respected. True, MetaTrader 4 has more features and more robust tools than the platform at Plus500. However, the large feature set available in the MetaTrader Suite is often overwhelming for most traders. The platform at Plus500 is simple, easy to understand, and provides flexibility for identifying only the information that you want to see.

Payment Methods

Clients at Plus500 can use a variety of payment methods to both deposit and withdraw from their accounts, including;

  • Credit cards (Visa, MasterCard, Maestro)
  • Debit cards (Visa, MasterCard, Maestro)
  • PayPal
  • Skrill
  • Wire transfer

Conclusion

A well-regulated and wide-ranging broker, Plus500 offers over 2,000 instruments to its clients using an intuitive, proprietary trading platform.

Pros Cons
Strong regulation, publicly listed brokerageOnly one trading platform available, no MT4
No commission fees of CFDsNo automated trading platform available
Guaranteed stop loss availableFixed spreads only
Negative balance protection

IQ Option

Basic Information

Minimum Deposit Min./Max. bet size Payout % Platform Regulation
$10$1/$5,000Up to 900% (Usually 87%)ProprietaryCySEC

IQ Option is a binary options and CFD broker offering hundreds of trading instruments and a proprietary trading platform. An often overlooked bonus is their free demo account. Few binary options brokers offer one of these. For more information about IQ Option read the full review.

Trading Accounts

IQ Option only has one account type, but you can be “promoted” and receive VIP status when your total deposits (not earnings) reach $3,000. VIP status awards you with a slightly more favorable withdrawal percentage. It’s worth pointing out that if your total deposits dip below $3,000, you will lose your VIP status.

Company Information and Regulation

Company Country Regulation
IQOption Europe Ltd.CypusCySEC

Probably the most critical variable when choosing a trading broker is regulation. A broker that is regulated by multiple authorities usually means that your money is safe if you invest with that broker. Curiously, IQ Option is only regulated by CySEC (Cyprus Securities and Exchange Commission). That is both good and bad; good because CySEC is one of the most respected regulatory authorities in the world, bad because IQ Option is regulated by only one authority.

Still, we consider IQ Option to be a reputable broker because CySEC enforces strict rules regarding the two most important aspects of investing: segregated accounts and compensation schemes.

When we talk about “segregated accounts,” we’re referring to the practice of keeping your deposited funds separate from the broker’s money. Years ago, most brokers kept client deposits and company funds in one big account. When the broker needed more money, they could “borrow” from the client funds. After several brokers went bankrupt, taking all of the client funds with them, regulatory authorities began requiring segregated accounts and investment insurance. At CySEC, the insurance for each client is set at €20,000.

A local broker compensation scheme is another segregated fund. Those brokers are required to contribute a portion of their profits to that compensation fund. That fund then acts as the reserve or insurance in case one of the brokers goes bankrupt.

While our experience with IQ Option has been exemplary, several negative reviews can be found in online forums. Reports range from slow speeds to not processing withdrawals. However, we cannot verify those reviews.

Trading Conditions

  • Assets: Indicies, Currencies, Stocks, Cryptocurrencies
  • Trading Options: Forex, CFD, Binary Options, Digital Options,

Minimum Deposit

IQ Option offers a minimum deposit of only $10. That is one of the lowest minimum deposits in the industry (except for brokers who do not require a minimum deposit like IG).

Minimum Bet Size

IQ Option offers a minimum bet size of $1. Again, this is one of the smallest minimum bet sizes in the industry. Such small bet sizes help mitigate risk.

Payout Rules

IQ Option offers a slightly higher payout percentage than most brokers at 87%. Digital options can technically reach as high as 900% but only under extremely unpredictable situations.

Tournaments

One unique activity at IQ Option that you don’t find at other brokers is the “Tournament” events. Each client pays $1 to $20 to sign up and is given $100 of virtual funds to “compete” with at the beginning of the Tournament. Traders compete by following whatever strategy they want and, when the Tournament finishes, the winners are announced and awarded small cash prizes. Be aware that these Tournaments can get heated and are not recommended for beginners.

Trading Platform

The trading platform at IQ Option is proprietary, which means you can’t find it anywhere else. It’s highly intuitive, fast, and easy to use. There are web, desktop, and mobile versions of the platform, so you have access to your trades at all times (very few brokers have that many versions of their apps).

While the desktop app and the web app are visually identical, the desktop version demands significantly less of your hardware. On higher-end computers, the difference is negligible. However, on older or slower machines, the web app could be a drag on your system and therefore slow your execution times.

The interface itself focuses heavily on the data with charts (candlesticks!) and graphs taking up nearly 85% of each window. All features and tools are available through menus and buttons around the edges of the interface.

Payment Methods

When depositing or withdrawing money from your IQ Option account, there are many options to choose from, including:

  • Giropay
  • Sofort
  • Skrill
  • Credit cards
  • Debit cards
  • And “many more!”

Conclusion

IQ Option is a binary options broker regulated by CySEC. Unlike other binary options brokers, IQ Option offers a free demo account. The proprietary platform at IQ Option is excellent, intuitive, and fast. Digital options are available.

Pros Cons
CySEC regulationNegative user reviews
Relatively nice proprietary platform
High average payout
Tournaments available
Demo accounts available

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Methodology 

The mission of Business24-7 is to provide comprehensive, unbiased ratings and reviews of online providers. User experience, the mobile experience, customer service, costs and fees, security, the quality of trade executions, the products available on their platforms are all part of our six-month evaluation of a providers’s platform. The rating scale was based on thousands of data points that have been weighted into the scoring system.

Providers were also required to fill out a multi-point survey regarding every aspect of their platform. In-person demonstrations and evaluations were provided by the majority of the online providers we reviewed.

Stefan Grasic, along with our team of industry experts, conducted our reviews and developed this methodology for ranking what form is used in online investing.

Business24-7 maintains high editorial standards and provides the best advice and recommendations. The products and companies that we review may compensate us when you click on the links on this website. Click below to find out more about our review process and methodology.

Disclosure

All trading involves risk. More than 80% of investors lose in spread bet and CFD trading. As these complex instruments allow for the use of leverage, there is a high risk of losing more money than you have deposited. Before attempting to participate in spread bets and CFDs, consider how well you understand them and if you can afford to lose your money.

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Braden Chase is an investor, trading specialist, and former research specialist for Forex.com who helps aspiring investors develop the confidence and habits they need to make an income from the market. Braden has served as a registered commodity futures representative for domestic and internationally-regulated brokerages and has also spoken & moderated numerous forex and finance industry panels across the globe.

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