eToro and IQ Option are among the most popular financial brokers in the world. Therefore, you will likely be faced with this dilemma during your search for a broker to trade with. This comparison is meant to help you decide wisely on which company to go with based on what you need.
eToro was founded in 2007 in Tel Aviv, Israel to tap into the fast growing retail financial markets. At the time, the company primarily offered Forex trading services to its clients in addition to CFDs for stocks, commodities and indices. As a new company, these financial instruments were available in a very narrow range but over time they have been expanded to include even more assets. eToro has also widened its reach to enter more regions around the world to become a truly global giant. This content is not intended for US users. eToro USA LLC does not offer CFDs, only real Crypto assets available
IQ Option has not been left behind either, although its history only dates back 6 years to 2013 when it was launched. Unlike eToro, IQ Option targeted the booming binary options market that had taken off in 2009 following the economic crisis. Within a short time, IQ Option would become one of the most popular binary options broker around the world. With time, the company included other assets for trade to become a truly all-rounded broker.
As you can see, both of these companies have interesting backgrounds and amazing products, but you can only choose one. To help you decide, it’s best to look at each of these companies’ products separately and identify the overall winner.
Regulation
It is very important to consider whether a financial broker is regulated by the relevant authorities. In this sense, eToro pretty much ticks all the right boxes as it is licensed to operate in multiple regions. When the company was started in 2007, the goal was to serve the European markets and this required a license from CySEC.
In 2010, the subsidiary eToro Europe was granted a license to operate in Europe under CIF number 109/10. In 2013, the FCA in the UK would also license the subsidiary eToro UK with reference number FRN 583263. With a license to operate throughout Europe, eToro looked to Australia and licensed the subsidiary eToro AUS with the ASIC under Services License 491139.
On the other hand, IQ Option is only licensed by CySEC since 2014 with license number 274/14. This license allows the company to market and provide its services within Europe and many other regions except the US. The good news is that CySEC is yet to ban binary options trading as many other regulators such as ESMA and the FCA have.
All in all, it’s good news that both of these brokers are properly licensed by reputable financial regulators. However, the fact that eToro has been licensed by 3 regulators compared to IQ Options one make this the preferred broker in this category.
Funding options
The good news is that both of these brokers accept multiple funding methods. Similar deposit methods include wire transfer, credit/debit cards (MasterCard and Visa), Neteller, Skrill and WebMoney but that is where the similarities end. For example, eToro also allows for deposits and withdrawals through PayPal while IQ Option does not. Meanwhile, IQ Option has additional support for ADV Cash, Perfect Money and WebMoney WME and WMZ when eToro only accepts WebMoney UK.
These brokers have also set different minimums, where IQ Option demands you make a minimum deposit of 10 USD/EUR/GBP. eToro, on the other hand, demands a minimum deposit of $200 for first time clients and a $50 minimum for subsequent withdrawals. Keep in mind that deposits in other currencies will incur an additional conversion charge of 0.025%.
Fortunately, all deposits are free, but you will be charged if you leave the funds inactive for too long, but that is unlikely. Withdrawals are a different case because there are some conditions and charges involved. On eToro, you are charged $5 for withdrawals, which is high considering there are no charges for withdrawals on IQ Option except in the case of wire transfers where $31 is charged. You also need to verify your identity before making any withdrawal as part of KYC (know your customer) and AML (anti money laundering) policies.
In this category, IQ Option is a winner thanks to their no-fee deposits and having more deposit options compared to eToro.
Available assets
Every broker tries to include as many assets as they can to provide their clients with as many options to trade as possible. These two brokers are no different and offer many tradeable instruments spanning different asset classes. eToro started as a Forex broker, and this is still one of their main offerings. Other than this, eToro also offers stocks, commodities, indices, ETFs and cryptocurrencies. IQ Option also offers the same assets, with the addition of both digital and binary options.
All the above assets are able to be traded on leverage since the two brokers provide these assets as CFDs. Leverage on IQ Option tends to be higher, though, because of CySEC regulation while leverage is capped at 30:1 for eToro because of FCA regulations. Although the leverage is lower, clients are eligible for compensation during complaints and negative balance protection. Besides, a trader can apply for higher leverage by proving they are a professional trader. eToro users also benefit from trading real assets whenever leverage is not applied. This means that one can buy actual stocks, ETFs and cryptocurrencies from this broker provided they don’t use leverage. There are benefits to this such as dividends to be enjoyed.
Winner here is eToro, but only by a small margin helped by the offer of real assets.
Trading fees
Do not expect trading to be free, and these brokers impose a spread to make a profit. Most brokers use commissions, but spreads have some advantages especially for someone making frequent trades within a day such as a scalper. That being said, eToro has wider margins when compared to IQ Option, and this is a disadvantage to its customers. Also when trading real assets, eToro clients will be charged for sell orders, making this broker more expensive.
Winner is IQ Option for affordability.
Trading platforms
Neither of these brokers make use of popular trading platforms like MetaTrader or cTrader, instead opting to develop their own proprietary software. There are some differences in appearance between the two platforms, but overall both of them are very capable. With plenty of charting tools and indicators to work with, none of the two can be definitively said to be better. But perhaps it should be mentioned that the IQ Option platform is available for download on PC in addition to its web and mobile versions while eToro’s is not.
Winner is IQ Option, but only by a small margin.
Available trading accounts
The first step before any trades is opening an account, and you can have a demo account from these two brokers to start with. To earn a real account, make a deposit as required above. There are different levels of accounts, though, such as the VIP account for traders who make higher deposits and Islamic accounts for specific faiths.
This category is a tie.
Additional features
In this category, eToro is well known for having social trading features on its platform. CopyTrades allows traders to see other traders’ activities and copy their trades on their own accounts. When a trader wants to publish their trades, eToro analyses their performance on the platform and ranks them. This allows interested people to copy only the most successful traders. CopyPortfolio is a feature that mimics an ETF or mutual fund where several assets are bundled together and invested in as a package. These investments reduce the risk involved and have predictable returns.
Inasmuch as IQ Option has included similar features to its trading platform, the company does not have as many participants as eToro, which likely has the largest community of traders copying each other’s trades. That makes eToro a clear, undisputed winner in this category.
Winning clients
It used to be almost impossible to tell how many clients were successful when trading financial markets, until ESMA demanded that their brokers disclose this figure. Compared to its peers, eToro is one of the top performers with 78% of its clients losing money. That may be a lot, but the industry average currently stands at 76.3%, showing that eToro is well above average and most of their customers on the winning side. Since IQ Option is not regulated by either ESMA or the FCA it is not possible to know the percentage of winning clients, but it is estimated to be between 74% and 89%.
This shows that eToro enables its customers to win more trades and make a profit. Perhaps this is because of their social trading features, but this makes them the winner in this category nonetheless.
Customer service
One doesn’t think much about customer service until they actually need it, and by then it’s usually too late. We tried to communicate with agents from both websites and found that their responses were very fast in both cases. That is good news considering both brokers have millions of clients around the world and still take time to attend individual queries. This section is a tie as well.
Overall winner
When all aspects are considered, eToro emerges as the overall winner in points. Nevertheless, some traders may be attracted by certain IQ Option features like digital and binary options. In the end, it is up to you to make the final decision.
