January 26

Plus500 Review | Broker breakdown 2021

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Plus500 is a leading UK CFD providers, they charge no commission fees (all the fees are in the spread). They allow users to trade indices, commodities, shares, forex, ETFs, options and cryptocurrencies. They provide 3 account types with access to advanced trading tools. Plus500 have a great reputation for customer service and offer 24/7 support.

  • Web Address: www.plus500.com
  • Country of regulation: UK, Cyprus, Australia, New Zealand, Singapore, South Africa, Israel, Seychelles
  • Inactivity fee charged: Yes
  • Withdrawal fee amount: 0
  • Minimum deposit: $100
  • Time to open an account: 1 day
  • Deposit with bank card: Yes
  • Depositing with electronic wallet: Yes
  • Demo account provided: Yes

76.4% of retail CFD accounts lose money

Plus500 is a trademark of Plus500 LTD. This Israel-based brand was founded in 2008 and offers online trading in contracts for difference (CFDs). It operates through a range of subsidiaries throughout Europe and the Asia-Pacific region and is registered with all relevant regulatory bodies. Like many other forex brokers, U.S. traders are not accepted by Plus500. 

The ‘Country by Country’ report on the company’s website states that Plus500 LTD is a publicly-traded company. It has been listed on the London Stock Exchange since June 2018. As of September 2020, the market capitalisation for Plus500 LTD was $2.07 billion. Plus500UK LTD is a UK-based company headquartered in the City of London and regulated and authorised by the Financial Conduct Authority in the UK. 

Plus500 offers clients in over fifty countries worldwide access to a comprehensive product line including forex, individual shares, stock indices, ETFs, options, commodities, and cryptocurrencies. They were also the first broker to introduce a Bitcoin CFD in 2013. They advertise that all trading costs are contained within the spread of each instrument, and offer access to options trading on a range of different markets. While they are very similar to put and plain call options that are traded on exchanges, they are not standardised, meaning that the option premium is customisable to your strategic objectives and risk tolerance.

Key Takeaways

  • Plus500 is regulated by all relevant bodies in each country where it operates, including the FCA in the UK
  • Plus 500 offers guaranteed stop-loss orders and negative balance protection to users
  • Plus500 is designed for traders who want to get access to a wide range of financial markets offering low trading costs and a simple, easy-to-use platform

Who is Plus500 For?

Plus500 is an ideal broker for the individual or company seeking access to a range of financial markets with low trading costs and a simple, easy-to-use platform with various functions where they can place trades. Plus500 is often a top choice for experienced investors who prefer manual transactions thanks to a product range of over two thousand trading instruments that are offered on its proprietary, WebTrader, with no commissions and competitive spreads. Many investors find that the lowered cost is worth sacrificing the additional functionality offered by some competitors.

Pros
  • The platform is functional and easy to use
  • Regulated by all relevant authorities
  • Client accounts are offered negative balance protection
  • Guaranteed stop-loss orders available
  • Access to over two thousand different trading instruments
Cons
  • Limited or non-existent education and research resources
  • U.S. clients are not accepted
  • Customer support can sometimes be lacking
  • Cannot be paired with other trading tools or platforms

Pros Explained

  • Plus500 offers clients in over fifty countries worldwide access to a comprehensive line of trading products, including forex, individual shares, commodities, stock indices, options, ETFs, and various cryptocurrencies.
  • Its proprietary WebTrader offers a simple, easy-to-use interface that allows users to analyse charts, create watchlists, and place and monitor trades.
  • Plus500 is regulated by all relevant authorities for each country where it operates, including the FCA which is the main regulatory agency in the UK. The FCA is highly reputable around the world for its strict measures to ensure that market practices remain fair in the industry for both individuals and businesses. Being regulated by a reputable, government-backed agency such as the FCA certainly helps to establish the credibility of a company.
  • Negative balance protection is offered by Plus500. This is mandated into ESMA rules and regulations that came into effect in 2018 to make sure that clients are unable to lose more money than they have put into their account.
  • Guaranteed stop-loss orders are designed to protect traders from market gap risk. At Plus500, they are available on some trading instruments depending on the market conditions; however, they are subject to a wider spread.

Cons Explained

  • Customer services at Plus500 are limited to email support and online chat. There is no phone number provided for customers even for sales purposes.
  • Plus500 does not provide a lot of information to help clients who are interested in learning about the markets that they are investing in, with research resources that fall below industry standards.
  • Due to regulatory constraints, Plus500 does not accept clients from the US.
  • Advanced traders will be disappointed at the lack of ability to incorporate third-party automation or analytical tools in their trading process since it is not possible to use these tools directly with WebTrader. There is also a lack of back-testing functionality.

    Costs - Rated 2.8/5

    As expected from the brokerage industry, Plus500 makes its profit mainly from customer trades that cross the bid/ask spread. The company does not charge any commission on client transitions since all trading costs are contained within the instrument’s spread, although this does not change with the size of the trade. Plus500 does offer a discount to high-volume traders. 

    In addition, this broker also makes revenues by charging premiums on positions held overnight by clients. This is effectively a financing charge which means that clients may be required to pay currency exchange fees if they are trading in a currency that is different from the base currency of the account. There are also fees payable for guaranteed stop-loss orders and Plus500 will also collect inactivity fees from users whose accounts have been idle for three months or more. 

    Traders are able to qualify for a professional account that does offer higher leverage, although the costs stay the same. Traders who hold a professional account with Plus500 may increase their maximum leverage by ten from 1:30 to 1:300.

    One of the main selling points of Plus500 is that client accounts are not subjected to any admin fees. You will not be charged for making regular withdrawals from your account or for closing your account down. The minimum deposit required to open an account with Plus500 is one hundred units of the base currency. You can deposit into your account using a range of funding options including Visa and Mastercard debit and credit cards, PayPal and Skrill, or bank transfers. 

    Trading Experience - Rated 2.2/5

    Plus500’s proprietary platform WebTrader offers a stable, streamlined trading experience that is easily accessible from a range of devices and systems including PCs, web browsers, tablets, and smartphones. It offers a simple, easy-to-use interface that allows you to analyse charts, place and monitor trades, and create watchlists. They offer technical analysis charts that include over one hundred technical indicators that can be applied to various different timeframes from tick charts to weekly charts. 

    However, unlike much of its competition, Plus500 doesn’t offer the popular MetaTrader 4 platform, which provides more functionality and customisation options for clients. WebTrader is appealing because it is easy to use with layouts that experienced traders will feel familiar with. Clients are able to choose from over two thousand instruments to trade with, analyse selections using a customisable technical analysis chart, and place their trades, with just a few clicks that all happens within the same window. However, the downside is that WebTrader is a closed platform, meaning that advanced traders who usually rely on using third-party analysis and automation tools when trading will not be able to do this directly with WebTrader. 

    It’s also worth noting that Plus500 does not offer any of the special features that you would typically have access to at other online forex brokers. It does not allow for automated trading via trading algorithms and expert advisors. There is also a lack of back-testing functionality and clients are not able to manage third-party funds using MAM or PAMM trading platforms. Plus500 simply provides a streamlined WebTrader platform that includes similar mobile trading apps designed for Apple and Android devices where clients can place and monitor trades. 

    WebTrader offers three basic types of order, with the option of attaching either ‘take profit’ or ‘stop-loss’ orders to them. The trader can also choose guaranteed and trailing stop options when completing the order ticket.

    Market: This is the simplest type of order, where a trader specifies that their trade request should be executed at the market rate. 

    Limit: This is a type of pending order, where the entry is set at a predetermined point either below or above the prevailing market rate. This will depend on whether it is a buy or a sell, and the trader can choose the time when the order is set to expire. 

    Stop: Another type of pending order, where the entry is predetermined at a point either above or below the prevailing market rate. It will once again depend on whether the order is a buy or sell and traders can select the expiration time.

    The mobile applications offered by Plus500 include all functionality that is available in the desktop version. Mobile traders can access the full product catalogue offered by Plus500, along with all other features including their account details, conditional orders, and charting from the iOS and Android apps. 

    During the analytical process in-app, it’s possible to get more clarity by expanding the dynamic charts to full-screen mode. App users can also easily use their mobile app to deposit and withdraw money. However, the lack of enhanced security measures on the apps may be of concern to some traders, particularly because these apps provide direct access to funded accounts. It is not possible for clients to use the MT4 mobile app to trade with Plus500. 

    Range of Offerings - Rated 3.4/5

    Plus500 users have access to over two thousand different financial instruments over a range of different asset classes, including forex, individual shares, options, ETFs, commodities, country and sector indices, and cryptocurrencies. Plus500 offers vanilla call and put options that work the same way as exchange-traded versions; however, they are non-standardised. This means that these options are adjustable and customis[able depending on the client’s strategy goals and risk tolerance. 

    Customer Service - Rated 2/5

    Customer service options at Plus500 are quite limited, with only online chat and email support available. However, these customer support options can be accessed 24/7 by clients. The lack of a telephone number for contacting the company is the most obvious omission when it comes to customer services, with no number available even for sales-related calls. Both prospective and current clients must use the online live chat service or an email ticketing system. On the upside, although the customer service options are limited, clients report receiving responses back within just a few minutes. 

    The online chat system is easy to use, although you may be talking to a chat-bot for the first few minutes of your conversation. However, this is not always a problem for clients since Plus500 uses software that is good at detecting commonly asked questions and providing short answers or links to relevant resources. When needed, getting through to a human customer service agent is also relatively quick and easy. 

    Education - Rated 0.8/5

    Today, most traders expect the brokers that they use to provide a range of informational and educational resources including videos, courses, eBooks, quizzes, and more to enable clients to learn more about the markets that they are investing in. However, none of these services are provided by Plus500. There is one legally-required ‘Key Information Document’ provided, which outlines the basics of each individual instrument available to trade and the risks that are associated with trading it. It also provides a summary of commodities, ETFs, forex, cryptocurrencies, equities, options, and indexes. It’s clear that Plus500 expects clients to already know what they are doing or be willing to seek education elsewhere. 

    Portfolio Analysis - Rated 0.9/5

    WebTrader provides information in real-time about client activity such as transaction activity, balances, and profit-loss breakdowns. However, it does not offer any in-built tools for analysing trading activity. No trading journals or tax accounting tools are provided as part of the platform. 

    Research Amenities - Rated 1.5/5 

    When it comes to research, tools, analysis, and commentary, Plus500 offers very little. There is no newsfeed and it is difficult to find any in-house research videos or articles. However, the provided economic and earnings calendars can prove useful. 

    Plus500 does provide customisable charts that traders can use to conduct technical analysis on any of the instruments they are considering trading. It also provides a ‘Traders Sentiment’ indicator which is designed to provide further information on the percentage of Plus500 clients that are buying and selling various instruments. The ‘Live Statistics’ indicator shows the performance of a certain instrument over various timeframes from five minutes to one day. 

    Security - Rated 4.5/5

    Plus500 acts as principal and hedges exposure with its parent company in order to ensure that it is not exposed to material losses and to eliminate market risk. Although it does not provide additional deposit insurance, Plus500 is registered with all relevant regulatory authorities in Europe and the Asia-Pacific region, including:

  • The Financial Conduct Authority (FCA). License number 509909
  • The Cyprus Securities and Exchange Commission. License number 250/14
  • The FMA in New Zealand. License number 417727
  • The FSCA in South Africa. License Number 47546
  • The Seychelles Financial Services Authority. License number SD039
  • The Monetary Authority of Singapore. License Number CMS100648-1

Since it is regulated by the FCA in the UK, Plus500 is required to ensure that client money is safeguarded by taking steps to ensure that client funds are not commingled with corporate funds. These funds are held in segregated accounts at regulated banks to ensure that clients do not lose money in the event that the company becomes insolvent. 

Plus500 also offers negative balance protection to clients to ensure that they are unable to lose any money that is more than they have put into their accounts. Security measures, such as biometric authentication for mobile apps, are also used, along with automated timers to log users out from both the web client and mobile apps after a certain period of inactivity. 

Verdict

It’s clear that Plus500 targets investors who are looking for a trading interface that does not require any advanced functionality. They offer competitive spreads which ensure that costs remain low, and the WebTrader proprietary platform is both intuitive and functional. UK clients also enjoy the additional security provided by FCA regulation. 

However, Plus500 is let down by the lack of research and educational resources provided to clients along with the fact that they do not provide MT4 as an additional platform. Coupled with the lack of automated trading tools, this platform is not suitable for beginners or traders who rely on third-party tools. However, the lack of functionality might be worth the lower cost for experienced traders who prefer to enter and exit trades manually.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.4% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.


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