Do you want to know everything about the IQ Option spread? This article gives you all the answers.
A spread can ruin you. Luckily, IQ Option does not use a spread. Learn now why this is essential to your success!
The spread is one of the most dreaded elements of trading conventional assets. Simply put, employing a spread means that your broker will sell you an asset for a higher price than he is willing to pay for it. The difference between the higher price, which is called the bid price, and the lower price, which called the ask price, is the spread.
While nobody likes to pay a spread, with regular assets, brokers can make a convincing argument to why they use a spread. When you buy or sell an asset, your broker has to access the stock exchange and place an order. This action involves systems that need to be maintained, licenses for certain types of software that need to be bought, and a certain amount of manpower to keep the entire system running. Taking a fee for this service seems reasonable.
With binary options, however, things are different. Since you do not buy or sell an asset but make a prediction about the future of an asset’s price, your broker does not need the large system that enables communication with the stock exchange. Every transaction will be strictly between you and your broker.
In a system that requires as little effort as making a search request with Google, employing a spread would be almost criminal. You do not pay for using Google, so why should you pay for investing in a binary option?
Luckily, IQ Option does the right thing and does not use a spread. This means, regardless of whether you invest in rising or falling prices, you will always get exactly the same price. This price will be the average of the ask price and the bid price regular traders have to pay or will get for selling an asset. The exact formula looks like this:
Price = (Ask + Bid) / 2
With this price system, IQ Option offers you a trustworthy, legit basis for your binary options trading. Make sure that you never invest in binary options with a broker that does not clearly state which price you will get. There are some rare examples where brokers tried to use the worse price for your investment. If you invested in rising pricing, the broker tried to give you the lower bid price. If you invested in falling prices, the broker gave you the higher ask price. Both options reduce your chances to win a binary option.
With IQ Option, however, you can be sure to always get an exact price, since there is no such thing as an IQ Option Spread.