Products Explained: Forex, CFDs and Digital Options
Forex Trading Covered
Forex here means trading currency pairs as leveraged contracts rather than exchanging currency. Leverage available to EU retail clients is capped by regulation, not set at the broker’s discretion.
Currency trading on this platform works the way it does at any EU-regulated retail broker: you take a position on the relative movement of two currencies, using leverage, and you settle in cash. No currency changes hands in the sense a traveller would recognise. The position is a contract, and its value follows the pair.
The mechanics in plain terms
A pair quotes one currency against another. A long position profits if the first strengthens against the second, and loses if it weakens. Leverage means the exposure is larger than the cash committed, which magnifies both directions equally — a point that marketing across the whole industry has historically underplayed and that regulation now constrains.
- Leverage is regulated. EU retail leverage is capped by rule, differs by instrument, and differs again by client classification. No ratio is quoted on this site because the applicable cap depends on all three.
- The spread is the entry cost. The gap between buy and sell price is paid the moment a position opens, before any market move has happened.
- Held positions accrue financing. Leveraged positions carried past the daily cut-off attract overnight financing. Short-term trading and multi-day holding therefore have different cost profiles.
- Volatility is not evenly distributed. Pairs behave differently around scheduled economic releases, which is when spreads across the market typically widen.
What is not published here
No number of currency pairs, no named symbol list, no spread and no financing rate appears on this page. Instrument availability changes, pricing changes faster, and both vary by account and by country. The live figures sit on the platform's own fee and instrument pages, and the cost structure in general is explained in the fees guide. A review that quotes a spread is quoting a number that was true on the day it was written.
Why currency pairs behave differently from the rest
Currencies are priced against each other, so there is no neutral position — every forex trade is simultaneously a view on two economies. That is why the pairs respond to interest-rate expectations, central-bank language and macroeconomic releases rather than to company news, and why a trader who reads equity headlines will find the pairs moving for reasons that were never in those headlines.
It also explains the trading day. Currency markets run continuously through the week, with liquidity shifting as regional sessions open and close. Periods when two major sessions overlap tend to be the most active; the quiet hours between them are thinner, and thin markets are where a position sized for busy conditions becomes uncomfortable. None of that is specific to this platform — it is the market — but it shapes what a realistic session looks like on it.
Who forex trading here suits
It suits a trader who understands leverage before using it, who sizes positions against a defined loss rather than a hoped-for gain, and who is comfortable that overnight financing makes a slow-moving position gradually more expensive. It does not suit someone looking for a savings product or an investment they can leave alone. Practise the mechanics on the demo account before committing money — currency pairs are an unforgiving place to learn what leverage does.
Forex here is leveraged contract trading with regulated leverage caps, an entry cost in the spread and a carrying cost overnight.
CFDs On Multiple Markets
CFDs extend the same contract model to stocks, indices, commodities and crypto. You trade the price of the underlying market without ever owning the asset behind it.
A contract for difference settles the difference between the price when a position opens and the price when it closes. That single sentence explains both the appeal and the limitation: one account reaches several markets that would otherwise require separate providers, and none of that exposure makes you an owner of anything.
The underlying markets covered
| Market | What the contract tracks | Worth knowing |
|---|---|---|
| Stocks | Share prices of listed companies | No shareholding, no voting rights; dividend treatment is set by the platform's terms |
| Indices | Broad market benchmarks | Exposure to a whole market in one position rather than to a single company |
| Commodities | Prices of physical goods such as metals and energy | Cash-settled; nothing is ever delivered |
| Crypto | Prices of major digital assets | No wallet and no coin; the volatility of the underlying carries straight into the contract |
No count of available instruments and no list of named symbols appears here, in line with the rule applied across this site: availability moves, and a stale list reads as authority while being wrong.
What ownership would have given you
The difference is easy to state and easy to forget in practice:
- A shareholder owns part of a company; a CFD holder owns a contract with a broker.
- A shareholder can hold indefinitely at no carrying cost; a leveraged CFD accrues overnight financing.
- A shareholder's downside is the amount invested; a leveraged position can move against you faster than the cash committed suggests.
- A coin holder controls a wallet; a crypto CFD holder has price exposure only.
This is not an argument against CFDs. It is an argument for using them for what they do well — short-to-medium-horizon directional exposure, including on the downside — rather than as a substitute for long-term investing. Anyone whose actual goal is owning assets for years is in the wrong product, and the alternatives page is a better starting point.
Leverage, margin and the cost of being wrong
Leveraged CFD positions are held against margin. If the market moves against a position far enough, margin obligations bite and positions can be closed out. EU rules cap retail leverage and require negative-balance protection for retail accounts as a standard requirement of the regime — described here as the rule that applies to regulated retail accounts, not as an audited fact about this firm and never as a guarantee that money cannot be lost. The practical protection remains position sizing, not the rulebook.
CFDs give one account access to four very different markets, always as price exposure and never as ownership.
Digital Options Mechanics
A digital option fixes a strike and an expiry in advance. The outcome depends on where price sits at expiry, and the amount at risk is known before the position is entered.
Digital options are the instrument most associated with this brand and the one most often described inaccurately, usually by content written before 2018. Structurally they are straightforward, which is exactly why they need careful handling.
How a position is constructed
- Choose the market you want exposure to.
- Choose a strike — the price level the outcome is measured against.
- Choose an expiry — the moment at which the measurement happens.
- Commit the amount you are prepared to risk on that outcome.
- At expiry, the result is determined by where price sits relative to the strike.
Because both the level and the moment are fixed before entry, the amount at risk is defined in advance. That is a real property of the instrument and really useful for position sizing. It is also the reason these positions are easy to repeat too often: a defined loss feels smaller than an open-ended one, and a series of small defined losses adds up exactly like a large one.
Not the same as binary options
Binary options are not offered to EU retail clients. ESMA prohibited their marketing, distribution and sale to EU retail clients in 2018 and restricted CFD leverage in the same set of measures, and national regulators later made equivalent measures permanent. It was a market-wide European measure, not an action against one firm. Old pages, old videos and old reviews describing a binary-option product on this platform are out of date — a useful thing to know, because that outdated material is the source of a large share of the confusion around the brand. The ESMA page traces what changed.
What is deliberately absent
- No payout percentage. No return or payout figure appears anywhere on this site.
- No minimum stake. The figure is shown on the platform.
- No expiry list. Available expiries vary by market and change.
Sites that publish those numbers rarely say when they checked them. Since they drive the entire economics of the instrument, a stale figure here would be worse than an honest gap.
Using them sensibly
If you trade digital options, treat the defined risk as a budgeting tool rather than a comfort blanket. Decide in advance how many positions a session may contain and what total loss ends the session, and size each position so that reaching that limit costs an amount you would shrug at. Practise the sequence on the demo first: the mechanics take minutes to learn and the discipline takes considerably longer.
Strike plus expiry means the risk per position is known upfront — which helps sizing and makes over-trading the real hazard.
Instruments Compared
The three families differ on how risk is bounded, how costs accrue and how long a position naturally lives. Matching the instrument to your intent matters more than picking a market.
Most product confusion disappears once the families are set side by side. The question is not which is best — it is which one matches what you actually intend to do.
Side by side
| Property | Forex | CFDs | Digital options |
|---|---|---|---|
| What you hold | Leveraged contract on a currency pair | Contract on an underlying market price | Position on a strike at an expiry |
| Ownership of the asset | No | No | No |
| Risk per position | Depends on size, leverage and stop placement | Depends on size, leverage and stop placement | Known before entry |
| Main cost | Spread, plus overnight financing if held | Spread, plus overnight financing if held | Built into the terms of the position |
| Natural holding period | Intraday to several days | Intraday to several weeks | Fixed by the chosen expiry |
| Suits | Traders following macro and currency moves | Traders wanting several markets in one account | Traders wanting a defined risk per position |
| Available to EU retail clients | Yes, with regulated leverage caps | Yes, with regulated leverage caps | Yes |
Choosing by intent
- You want to learn how a platform behaves. Start on the demo, in one family only, and change nothing else until the mechanics are automatic.
- You want defined risk per position. Digital options bound the amount at risk before entry, at the cost of a fixed expiry you cannot extend.
- You want to hold a directional view for days. A CFD suits that better, provided you accept overnight financing as the price of patience.
- You want exposure to several markets from one account. That is the practical case for the CFD range.
- You want to own assets long term. None of these products does that. Use a broker that provides actual ownership.
What no comparison can tell you
A table cannot rank these by expected return, and any source that does is inventing figures. Outcome depends on the trader's decisions, on sizing and on market conditions — not on which family a review prefers. What the comparison does settle is fit, which is the part actually within your control before you start. If you are weighing this platform against others, the Quotex comparison applies the same evidence standard to a rival.
Pick the family that matches your intended holding period and risk shape; no table can rank them by expected return.
Product-Level Risk Notes
Every product here can lose the amount committed. Leverage amplifies both directions, defined risk still compounds across positions, and regulation constrains conduct rather than outcomes.
Risk warnings get skimmed because they are usually generic. These are specific to the three families above, and each one describes a way real money is actually lost.
Risks that attach to the instruments
- Leverage cuts both ways. The same multiple that makes a small favourable move meaningful makes a small adverse move meaningful. It does not increase the probability of being right.
- Defined risk compounds. A bounded loss per digital-option position is not a bounded loss per session. Twenty small defined losses are one large loss.
- Carrying costs erode slow trades. Overnight financing means a leveraged position that is right but slow can still finish behind.
- Volatility clusters. Around scheduled news, spreads widen market-wide and prices gap. Positions can be filled at levels you did not anticipate.
- Crypto exposure inherits crypto volatility. Wrapping it in a CFD changes the settlement, not the behaviour of the underlying.
- Nothing here is ownership. If the goal is to hold an asset, none of these products delivers it.
Risks that attach to the trader
Most retail losses are behavioural rather than technical: increasing size after a loss, trading without a session limit, treating a demo run as evidence of skill, and confusing an unfavourable outcome with an unfair one. That last habit is visible across public complaints about this whole product category — a trading loss reported as a withheld payout is a recurring pattern, and it is a product-risk misunderstanding rather than evidence of misconduct. The complaints page separates the categories.
What regulation covers, and what it does not
The European entity is a CySEC-authorised Cypriot Investment Firm operating under the EU MiFID framework, which sets duties on conduct, disclosure, client money and reporting, and places a named supervisor with a public register behind the firm. Retail negative-balance protection and client-money segregation are standard requirements of that regime, described here as rules rather than as audited facts about this broker, and never as a promise that money cannot be lost. Regulation makes the counterparty accountable. It does not make the market predictable. The regulation page works through the distinction.
Practical guardrails
- Trade one product family until its behaviour is actually familiar.
- Set a per-session loss limit before opening the platform, and stop at it.
- Size every position against the loss you would accept, never the gain you want.
- Keep leveraged positions and overnight financing in the same thought.
- Fund only with money whose loss would not change your circumstances.
Bounded risk per position is not bounded risk per session — set a session limit before you open the platform, not after.
Frequently asked questions
What can you actually trade on IQ Option?
Three product families: forex currency pairs traded as leveraged contracts, CFDs on stocks, indices, commodities and crypto, and digital options based on a chosen strike and expiry. All three are contracts on price movement rather than ownership of the underlying asset. No instrument count or symbol list is published here because availability changes and varies by country.
Are binary options still available?
Not to EU retail clients. ESMA prohibited the marketing, distribution and sale of binary options to EU retail clients in 2018 and restricted CFD leverage in the same measures, and national regulators later made equivalent measures permanent. That applied across the European industry rather than to a single firm, so any content describing binary options on this platform predates 2018.
How are digital options different from CFDs?
A digital option fixes a strike and an expiry before entry, so the amount at risk on that position is known in advance and the position ends at a set moment. A CFD stays open until you close it, has no predetermined outcome level, and accrues overnight financing when leveraged and held. Different risk shapes, different natural holding periods.
Do I own the shares or crypto I trade?
No. Every product covered here is a contract on price. A stock CFD gives no shareholding and no voting rights, and a crypto CFD gives no wallet and no coin — only exposure to the price of the underlying. If your goal is to own assets and hold them long term, a CFD platform is the wrong instrument for that purpose.
What does trading cost on these products?
No spread, commission or financing rate appears on this site, because those figures change and vary by instrument and account. The cost types are the spread paid when a position opens, overnight financing on leveraged positions held past the daily cut-off, possible payment-provider costs and possible inactivity charges. The live numbers are on the platform's own fee page.