Plus500 Review [Updated 2021]
Plus500 offers online trading with CFDs (Contracts for Differences). In a sense, it’s a proprietary trading platform through the web and its mobile app. Since it is so popular, we wondered if it was a legitimate option and if it was safe to use. Ultimately, we came up with this Plus500 review so that you had all the answers you need to decide for yourself.
It’s not easy to pick a trading platform. Your money is essential, so you want it to be legitimate and have an excellent track record. Our Plus500 review is going to explain the various markets available and how to go about trading on the platform.
What Is Plus500?
Plus500 was founded in 2008 and is an Israel-based company operating through several different subsidiaries in the Asia-Pacific region and Europe. Currently, it is registered with the appropriate regulatory agencies. Like many of the other forex brokers, it doesn’t accept US traders.
According to the report on its website, Plus500 is a publicly-traded company. It’s been shown on the LSE (London Stock Exchange) since June of 2018. As of September 2020, its market capitalization is $2.07 billion (£1.60 billion). It’s also regulated fully from the Financial Conduct Authority (FCA).
Plus500 assists clients in over 50 countries and helps them access its comprehensive product line. This includes commodities, individual shares, stock indices, forex, cryptocurrencies, options, and ETFs. In fact, Plus500 is the first broker to introduce Bitcoin CFDs back in 2013 and advertises that its trading costs are fully contained within the instrument’s spread. On top of that, Plus500 offers access to options trading through many markets. While they are similar to the plan call/put options traded through exchanges, they aren’t standardized. Therefore, the option premium could be customized for your strategies and risk tolerance.
Who Is Plus500 For
Ultimately, Plus500 is for an entity or individuals that want to access various financial markets. You get low trading costs and a functional, simple platform to place your trades on. Plus500 offers a product suite of over 2,000 trading instruments. They’re all provided on the proprietary WebTrader and features no commissions and competitive spreads. This should entice experienced investors who want to transact manually and find the lowest costs with more functionality.
- Guaranteed Stop-Loss Orders – Stop-loss orders protect you from market gap risks. They’re available on many of the instruments, but it’s based on market conditions. Plus, they have a higher spread associated with them.
- Negative Balance Protection for Clients – With Negative Balance Protection (mandated under the 2018 ESMA rules), clients can’t lose more than what is in their account.
- Regulated by the FCA (UK) – The FCA is a top regulatory agency in the UK and is highly regarded because it’s strict and ensures that all market practices are fair for businesses and individuals. In a sense, being regulated by a government-backed agency with a good reputation instills the credibility of Plus500.
- Functional and Easy-to-Use Platform – The Webtrader offers a simple interface where you can analyze charts, create watchlists, and place/monitor trades.
- Have Access to Over 2,000 Trading Instruments – Clients in more than 50 countries have access to a very comprehensive product line. This includes cryptocurrencies, options, ETFs, commodities, individual shares, stock indices, and forex.
- Can’t Pair Trading Platform with other Platforms or Tools – If you rely heavily on third-party automation or analytical tools for your trading processes, you may be disappointed. These tools aren’t integrated or available from the Plus500 WebTrader. Also, back-testing isn’t included.
- Doesn’t Accept US Clients – Because of regulatory constraints, Plus500 doesn’t accept US clients. This isn’t a red flag, though, because the company isn’t regulated by any US agencies.
- Research and Education Resources Are Limited/Non-existent – There’s little assistance for clients to learn about the markets and how to invest while using Plus500.
- Customer Support Lacks – You have online chat or email support available. However, there’s no telephone number at all.
How Does Plus500 Work?
Plus500 primarily offers CFDs, which are contracts for difference. Therefore, you don’t buy or hold the asset. Instead, you trade on its price. In a sense, you guess whether the asset is going to move up or down. If it heads to that position, you make money.
The spread is also calculated, and this is the primary difference between the platform’s price and the real price. You also have to know how to use leverage. If it goes wrong, you lose money. However, Plus500 still makes money if you have a loss.
Those who are unfamiliar with CFD trading might want to start with the demo account on Plus500. You can ‘play’ with ‘fake’ money and figure out what it’s all about. When you’re comfortable, you can move on to live trading. Plus500 doesn’t ‘babysit’ you or automate the process like others. Therefore, you should be experienced enough to set up the trades yourself.
Is Plus500 Safe?
Yes, Plus500 is considered safe to use because it is regulated. Ultimately, it’s been around for over a decade, so it’s earned a reputation within the online community by traders as being trusted and reliable.
Plus500 is considered to be low-risk. In fact, it doesn’t operate a bank and is publicly traded. Therefore, it’s authorized by three different tier-one regulators (giving it high trust) and four tier-two regulators (for average trust). The tier-one regulators include MAS (Monetary Authority of Singapore), ASIC (Australian Securities & Investment Commission), and FCA (Financial Conduct Authority).
With Plus500, traders are protected through the FSCS (Financial Services Compensation Scheme) for up to £85,000, which is the regulatory requirement. Plus500 also operates one of its subsidiaries that is regulated by CySEC (Cyprus Securities and Exchange Commission). Therefore, it is also under the FID and the anti-money laundering directive. As a trader, you are also protected with the CIF (Investor Compensation Fund) for a maximum coverage of about £20,000, which is stipulated from the EU Directive.
Plus500 has an Israeli branch, which is regulated through the Israel Securities Administration. Through regulatory requirements, all client funds have to remain separate from company funds. With that said, Plus500 serves traders using the right regulatory framework (several of them), so it is considered trustworthy with any deposits provided.
Most brokerages in the industry generate their revenues from customer trades when they cross over the bid/ask spread. These are highly competitive. The company itself doesn’t charge commissions for any client transactions. This is because all of the trading costs are contained in the spread in that instrument. Though the spread doesn’t vary with the size of the trade, Plus500 does provide high-volume traders with a discount.
Plus500 generates revenues by also charging premiums. In a sense, they are finance charges on the positions held overnight by the client. These could be subjected to currency conversion charges if you trade in a currency that’s different from your account’s base currency. You are also charged fees for GLSO (guaranteed stop-loss orders). On top of that, you could incur inactivity fees if your account stays idle for about three months.
There is a “professional” account available to traders on Plus500. If you qualify for it, you can get higher leverage, and the costs/fees remain the same. Investors who have a professional account can increase their maximum leverage from 1:30 to 1:300.
One of the selling points for Plus500 is that it doesn’t subject its client accounts to any ancillary fees. This means you aren’t charged to terminate your account or make normal withdrawals. The minimum amount to open your account is 100 units of your base currency. Funding options are extensive with debit/credit cards, bank fund transfers, and e-wallet accounts.
In a sense, the fees from Plus500 aren’t the highest in the industry, and it all tends to balance out in the end. However, the most important thing is that Plus500 is completely transparent about its costs and prices. Therefore, you can easily calculate and compare them. Most of the time, a low trading fee structure ensures that you see more profitability with your strategies. Still, this is not guaranteed, and you need to be sure you can afford the risk.
Opening an account on Plus500 is quite simple and easy to do. Everything happens through an online application, which is standard for the brokerage industry. This company requires you to have a password and email address in the first step of the process to open your account. You may choose to log in with a Facebook or Google account, making it all very easy and straightforward.
If you’re a new trader on Plus500, you are required to submit a copy of your ID and a proof-of-residency document for the verification process. This is required by the regulators and not so much by the company. Still, you should be appreciative of the high regulation because it ensures that you’re you and is more trustworthy than non-regulated entities.
It’s easy to upload a copy of your passport or ID to verify identities. You can also use a utility bill or bank statement for residency proof. Alternatively, you can use your residence permit and driving license for ID verification. You can use a salary slip, address card, or toll taxes letter to verify your residency.
You may choose to send these through the mail. However, it’s going to take much longer for the information to be processed by Plus500. While you can sign in to your account and get to know the platform, you can’t make trades until your identity and residency have been proven.
There’s also a professional account, which is available to high-volume traders, but you must meet certain criteria. With this account, you:
- Have higher maximum leverage
- Can revert back to the basic account anytime
- Get negative balance protection and client money protection
However, you do lose access to the FOS (Financial Ombudsman Service), which can help resolve disputes between financial service providers and consumers.
Do You Qualify for a Professional Account?
If you want to be considered to have a professional account on Plus500, you’ve got to meet two out of three criteria listed below:
- Sufficient Activity – You’ve got to average about 10 transactions of significant size per quarter over the other four quarters with your CFD broker.
- Portfolio Size – You need a financial instrument portfolio with at least €500,000. Cash savings can be taken into account here. However, you can’t use direct commodity ownership, property portfolios, or any notional values of your leveraged instruments.
- Relevant Work Experience – You’ve got to have worked within the financial sector for one year or more in a position that requires you to know about the appropriate services and products.
Deposits and Withdrawals
The deposit and withdrawal services are excellent from Plus500. You’ve got many options, there are no deposit fees, and you can get free withdrawals.
You’ve got many currencies available to you, including minor ones. However, we’re not exactly sure which ones are available or how many there are. The following options are for sure included:
The default currency is always set based on the country you live in. You can change your base currency, but you’ve got to contact customer support to do it.
Why does that matter, though? There are two reasons. If you fund the Plus500 account with the same currency as your banking account or trade assets with the same one as the base trading account currency, there are no conversion fees. However, if the bank account’s currency is different from the account’s base currency, you are charged up to 0.5 percent on all instruments and trades. You can get around this issue by opening an account with a digital bank that offers multiple currencies. It’s more likely to provide bank accounts in various currencies with lower exchange rates and cheap/free international bank transfers.
Plus500 doesn’t charge any deposit fees. Plus, you get many options available, such as:
- Bank transfer
The e-wallet options available to you depend on the region you live in. For example, Skrill isn’t available in all areas, but PayPal is more widely accepted.
Bank transfers are available but can take many business days to process. Therefore, you have to wait until the funds are in your Plus500 account before you can do anything. However, e-wallet and credit/debit card payments are instantaneous. Remember, you can deposit money only from an account that is in your name or has your name on it.
You can withdraw money from your Plus500 account for free. However, there’s a minimum amount for withdrawal of $100 for credit/debit cards and bank transfers and $50 for PayPal. The same methods apply for withdrawals and deposits.
We must say that it can take over three business days before your money is withdrawn from your Plus500 account and put into the other one. Again, you can only remove your money and put it into an account with your name on it.
To withdraw money from your Plus500 account, you must:
- Login to the account
- Click on the ‘Menu” icon found in the top left.
- Click on ‘Withdraw.’
- Enter how much you want to withdraw.
- Click the ‘Open a Withdrawal’ button to start the transaction.
Plus500 Share Price
It’s important to note that the share price is always changing. However, you can easily check the share prices through the London Stock Exchange. Typically, you want to do this multiple times a day. Since you’re trading CFDs, things can go up and down quickly. Knowing how the market moves is a great way to figure out what you’re doing and what strategies might work best for you.
Here’s a full breakdown of the spreads you may see when trading on Plus500. You have a ‘no deposit fee or commission’ broker, so it receives compensation primarily through the bid/ask spread of the market. Sometimes, it’s referred to as a market-maker spread.
Ultimately, the spread is considered the difference between the bid or buy and the ask or sell price for a trade.
There are two different spread types available to Plus500 customers:
- Variable Spread – This changes constantly while you’re in an open position.
- Fixed Spread – This doesn’t change, even when the position is open.
Here’s an example: If you have a buy rate for USD/EUR, and it’s 1.18263 with a sell rate of 1.18255, then the market spread is about 0.8 pips or 0.00008 percent.
With Plus500, you do get a demo account. This allows traders to test out their ideas and get familiar with the platform and real market conditions. Ultimately, it’s a risk-free environment. In fact, the only difference between a real money account and a demo account is that you get to trade with fictitious money (up to $40,000) with the demo account.
Most brokers provide demo accounts, but we think that the Plus500 one stands out for many reasons:
- It can stay open for an unlimited time frame.
- You can open it without having to ever open a real money account.
- It’s ready to go, so you can practice trading minutes after you sign up.
If you want to open a demo account, you should go to the homepage of Plus500. From there, it’s going to show you the ‘try free demo’ button. Click that, and you’re taken to its sign-up form. Create your account by entering a password and email address. Plus500 gives you a quick tour of its platform so that you’re more familiar with everything. Then, you can open a practice position.
There are plenty of help boxes along the way to help you understand what’s going on. Whenever the demo account funds drop below $200, it is automatically topped up for you so that you can continue practicing.
When you decide to open a real money account, you still keep the demo one. That way, you can switch between them both on the main menu of the platform. It’s a great way to check your strategies before you try them with your own money.
We like the overall web-based platform because it’s easy to use and is aesthetically pleasing. However, you can’t customize it to meet your needs. In a sense, Plus500 created its own web trading platform, and it’s available in many languages.
The look and feel of the web platform are excellent. It’s got a clean interface and is well-designed. Plus, it can go in dark mode for those days where you’re working late or suffer from eyestrain.
When you go to sign in, there is a two-step login process. If you’re into it, Facebook and Google authentication are also available. Plus, it’s easy to search, and you can find anything you want. The products to be traded are on the left in various categories, or you can search by the name of the product itself.
You’re going to appreciate the alert and notification functionality. This allows you to set up push notifications, SMS, and email alerts. If the asset’s price reaches a particular level or changes by a specific percentage, the alert warns you. Plus, you can sign up for the Trader’s Sentiment alert. This is the percentage of sellers and buyers for Plus500 customers, and it can tell you when a particular level is reached.
You’re also going to appreciate the many charts and reports available from Plus500. The reports tell you how much you pay in fees and the composition of your portfolio. That way, you always know what’s going on.
There are also nine charts available on the WebTrader, and you can use them simultaneously. Though it can be hard to find it, you just have to look for the button with four quadrants in the chart toolbar.
Plus500 also offers a mobile trading app, which means you can trade even if you’re on the go. We like this option and can’t find much to dislike about the app itself.
You’re going to appreciate that it’s user-friendly and offers two-step login functionality. In a sense, the mobile platform is similar to the web platform. It features the same functionality and is quite easy to use.
Ultimately, you can download the mobile app for Windows, Android, and iOS. It’s even possible to use your smartwatch. However, we aren’t sure of the functionality since it is such a tiny window.
We like that the mobile app for Plus500 is rated highly by traders from Google Play and the App Store. You’re still going to get real-time quotes and price alerts on your stocks and currency pairs. Plus, you can track your finances and link this account to your bank account directly.
You must download the mobile app from the appropriate store. Once you do, it’s easy to log in with your password and email address.
The dashboard is quite simple, and you can access account status and instruments from the ‘Menu’ icon at the top left. This opens up the user-friendly menu and allows you to jump to various categories. These include open/closed positions, instrument categories, alerts, and future orders.
It’s also possible to switch to the demo account or back to the real money account. Toward the bottom of your screen, you can see your account balance. There’s also a link to get a more detailed look.
Though we tried to cover everything in this Plus500 review, we know it’s difficult to focus on every topic. You might still have questions, and these are the common ones people ask all the time. See if they help you decide if this is the right brokerage for you:
Is It Possible to Make Money on Plus500?
Yes, it is possible for you to make money using the platform. However, you are trading CFDs, which is much riskier than other options. Therefore, you need to be in a financially stable position to lose money as well as make it.
How Can I Withdraw My Money from Plus500?
It’s easy to withdraw your money from the platform with Skrill, credit/debit cards, PayPal, and bank wires. Just click ‘Withdrawals’ on the screen once you log in. Then, follow the instructions and withdraw money.
How Long Does It Usually Take to Withdraw My Money from Plus500?
Plus500 claims that it takes up to three business days to pay you the withdrawal amount and get it into your preferred bank account. Typically, PayPal is the fastest method for withdrawal.
What Is Scalping, and Why Doesn’t Plus500 Offer It?
Scalping is one of many trading styles that profits off those small price changes to help you make a fast profit from reselling. In a sense, you’re making high-volume trades with small amounts of money.
Plus500 can block or close your account if you try scalping methods. It claims that prohibited trading methods, such as scalping, are in the Terms of Agreement. When you sign up and agree to them, you are saying that you aren’t going to use scalping or hedging. Plus500 calls it an abuse of the bonus system, and therefore, it isn’t allowed.
Is Plus500 Fully Regulated?
Yes, Plus500 is regulated through the FCA (Financial Conduct Authority), which is the primary regulator. However, Plus500 is also regulated by MAS (Monetary Authority of Singapore), FSB (South Africa Financial Services Board), FMA (New Zealand Financial Markets Authority), ASIC (Australian Securities and Investments Commission), and CySEC (Cyprus Securities and Exchange Commission). You can feel comfortable and safe trading through Plus500.
Can Beginners Easily Use Plus500?
Yes, we feel that Plus500 is a good option for beginner traders. It’s user-friendly and offers a demo account to practice and learn.
What Are the Minimum Deposit Amounts on Plus500?
The minimum deposit that’s required to open an account with Plus500 is $100. However, this amount can rise based on the payment method you use to fund your account.
Where Is Plus500 Based?
Plus500 has headquarters in London, UK, which is shown on the FTSE250 listing entry. However, it also manages its global headquarters from Israel and operates various subsidiary options, too.
How Does Plus500 Make Its Money?
Ultimately, Plus500 charges a spread for over 2,000 assets. It’s called a market-maker, so it profits when you lose money.
How Do I Deposit Money into My Plus500 Account?
You can use various payment options to deposit your funds. These include Neteller, PayPal, Skrill, and many credit/debit cards. However, regional payment choices may only be available. Once you’re in the trading platform, you can see what payment options are available in your area.
When Is a Margin-Call Issued from Plus500?
If your account balance doesn’t satisfy the margin maintenance requirement, then a margin call is issued. There are strict requirements in place within the trading platform. The maintenance margin is dependent on the asset.
What’s the Maximum Leverage Provided by Plus500?
Typically, the maximum leverage is capped at just 1:30 for regular clients. However, if you qualify for and upgrade to the professional account, you can see higher leverage options of 1:300. If you’re a regular client, you could have access to the 1:300 option when trading ASIC-regulated entities.
What Trading Platforms Are Offered?
You may only use the Plus500 trading platform, which is found on the web or on a mobile device (downloaded to your phone from the appropriate app store). This is a proprietary trading platform, so you know that everything offered on it is legitimate and okay to use.
Is Plus500 Legit?
Yes, Plus500 is a legitimate brokerage. It’s been operational since 2008 and is regulated by five entities. It also has an authorization to be a financial service provider in two other jurisdictions. With that said, it’s a component on the London Stock Exchange. Therefore, it is a good broker to use, but there are risks involved. You should understand what those entail and make sure you’ve got the funds to lose if something goes wrong.
What Are the Benefits of Using Plus500?
Since Plus500 primarily focuses on trading CFDs, we’re going to look at the advantages of trading CFDs. Typically, CFDs are highly popular, and it’s one of the most preferred methods for trading on the financial market. With trading CFDs, you don’t have to deal with stamp duty or exchange charges.
Most of the trading inefficiencies that come from shares on an exchange are completely eliminated. Plus, you avoid the delays and costs associated with physically delivering shares. You don’t have to register them or deal with safe custody and holding charges, either.
Another major benefit of trading with CFDs is that you can use leverage on the margin. In a sense, you’re trading a portfolio of indices, shares, or commodities without actually owning them. This means you don’t need significant capital amounts to make money. Moreover, those financial entitlements (dividends) are adjusted in cash and directly added to your account. However, you don’t have any voting rights because you don’t ‘own’ the stock or commodity.
Ultimately, with Plus500, you can’t lose more funds than what’s available in your account.
What Are the Risks Involved with Trading CFDs?
There are many risks involved when trading CFDs. It isn’t right for us not to explain them to you. In fact, you could cause a negative financial outcome for yourself when trading CFDs. It’s essential that you monitor the risks and make sure you know what you’re doing.
- Market Volatility – The markets are subjected to various influences that can result in quick price fluctuations. Therefore, trading CFDs can’t be considered ‘risk-free.’
- Counterparty Risk – You’re dealing with Plus500 (a counterparty) for each transaction. Therefore, you are exposed to Plus500 each time.
- Leverage Risk – You need more leverage to trade CFDs. Therefore, you could have a small initial margin to secure more exposure for an asset. Leverage effectively magnifies the size of the trade, so there’s a higher potential gain. However, this also means a higher potential loss.
Plus500 is ultimately well-regulated and has been operational since 2008. Therefore, it has the tenure and experience you want from your brokerage company. At first glance, Plus500 seems to be the market leader, and it does have impressive operational statistics. We feel that the best feature offered is ‘asset selection,’ but the weakest area comes from the research and educational sections.
Though Plus500 is fully compliant with its regulators, there have been a few minor problems. They’ve all gotten resolved, and there hasn’t been an insolvency or bankruptcy, which are strong and positive signs.
The only platform available is its proprietary one, which could be seen as both a disadvantage and advantage. New traders are going to enjoy how easy to use the platform is. Advanced traders could appreciate this simplicity, too.
We feel that trading costs are comparative and that Plus500 is an attractive broker. Our conclusion is that it has some flaws, but its benefits outweigh those with a user-friendly platform, competitive spreads, and a wider asset offering.