This article will review plus500. If you are looking to invest, or have any questions, you can contact me on this page.
Before reading this article, it would make sense to learn about some of the limitations of DIY investing, especially for beginners.
Introduction:
Plus500 – ‘Plus500’ is a global financial firm that offers specialized online trading services in ‘CFDs’ and ‘Forex’. This company was first founded in the year 2008 in Israel and has been operating since then.
The headquarters of Plus500 is located in Haifa, Israel and has branch offices in countries such as ‘UK’, ‘Cyprus’, ‘Australia’, ‘Singapore’ and ‘Bulgaria’. Plus500 is the label for Plus500 Ltd and the branch names are as follows:
- Plus 500 SG Pte Ltd, which is in Singapore.
- Plus500 UK Ltd, which is in London.
- Plus500 CY Ltd, which is in Cyprus.
- Plus500 AU Pty Ltd, which is in Australia.
- Plus500 BOS EOOD, which is in Sofia, Bulgaria.
This firm is listed on the London Stock Exchange and is a constituent of the ‘FTSE 250 Index’. It is authorized and regulated by some of the top tier financial authorities.
The financial authorities by which Plus500 is regulated and authorized are:
- ‘FCA’ – UK
- ‘ASIC’ – Australia
- ‘CySEC’ – Cyprus
- ‘MAS’ – Singapore
- ‘ISA’ – Israel
The apps of Plus500 are available in 32 languages, which include ‘English’, ‘German’, ‘Italian’, ‘French’, ‘Russian’, ‘Arabic’, ‘Simplified Chinese’, ‘Hebrew’, ‘Romanian’, ‘Spanish’, ‘Danish’, ‘Finnish’, Swedish’, etc.
History – The company was started in the year 2008 by six people working for a company called ‘Technion – Israel Institute of Technology’. They were ‘Gal Haber’, ‘Alon Gonen’, ‘Elad Ben-Izhak’, ‘Shlomi Weizmann’, ‘Omer Elazari’ and ‘Shimon Sofer’. The initial investment (which was $400,000) was contributed by Alon Gonen.
- In the beginning, the firm used to be available only on Windows OS.
- Later in the year 2010, Plus500 launched its web trading platform, with the help of which even Mac and Linux users were also able to avail their trading services online.
- They launched applications specialized for IOS (iPhones and iPads) users in the year 2011 and Android-based trading platform (for smartphones and tablets) in 2012.
- Android application, on the other hand, was launched in 2014.
- In the year 2016, Plus500 launched a specialized app for Apple Watch, with the help of which the users were able to trade and monitor their account details.
Due to insufficient staff, failures in the efficiency of systems, ineffective documented procedures, etc., Plus500 was not able to submit accurate transaction reports for a time period of 18 months approximately in October 2012. Due to this, a fine of £205,128 was imposed upon them by the FCA.
In the year 2015, FCA ordered Plus500UK (which is a UK branch) to freeze the accounts of UK-based traders as a part of the anti-money laundering operations. This led to a 60 percent fall in the stock of the company. Most of the traders were able to get back their funds within 2 months. During this period, the Australian and Cyprus-based branch offices were not affected.
In June 2015, Plus500 confirmed to sell the company for $703 million to a company called ‘Playtech’, which was an online gambling company extending their business into trading services provider. Anyhow, the deal got canceled as the company was not able to acquire regulatory approval for expanding its business.
In 2016, ISA (Israel Security Authority) granted a Trading Arena License to Plus500IL Ltd (branch office in Israel), which became one of the very few companies to attain that license.
In 2018, the Economic Calendar of Plus500 was launched that covered 5 of the major financial events and indicators globally that are provided by Dow Jones & Company. Their calendar consists of the most highly influenced financial instruments for all economic events. In the same year, shares of Plus500 got listed on the primary market of the London Stock Exchange.
Services Offered:
Plus500 mainly specializes in CFDs and Forex and have been offering related services since 2008. Some of the examples of the instruments offered by Plus500 are Stock Indexes, Equities, Commodities, ETFs (Exchange-Traded Funds), Options, etc. They are the first online trading platform to introduce Bitcoin CFD (in the year 2013).
Plus500 is an efficient broker, which primarily concentrates on trading within a wide range of financial markets with comparatively lower spreads (with no additional services offered).
Another major aspect that needs to be concerned is that more than 80% of investors trading CFDs with the help of Plus500 often obtain losses. Hence, it is highly suggested that people should take this detail into consideration and obtain some knowledge on CFDs or contact a financial advisor before trading CFDs.
CFDs – CFD, used as a compact term of Contract for Difference, is a well-known form of derivative trading. It allows the investor to speculate on the rise or fall in the prices of the financial global markets or instruments like shares, indices, commodities, currencies, etc. In simple words, CFDs allow investors to benefit from the difference in the price movements that occur in the assets.
A person investing in CFDs does not actually own the assets but only receives the profits obtained because of the changes in the price of the asset. Major advantages of investing in CFDs are as follows:
- Ability to invest in an asset with a lower amount than directly investing in the asset.
- Execution of trades can be done easily.
- Ability to go long or go short.
Some of the primary disadvantages and risks of investing in CFDs include:
- Instant decrease of the investor’s initial position, in which reduction of the size of spread occurs on entering the CFD.
- Weak industry regulation.
- CFDs are known to lack liquidity.
- While investing in CFDs, an appropriate margin should be maintained.
FOREX – Forex (FX), short for Foreign Exchange, refers to a Foreign Exchange marketplace, where various countries’ currencies are traded. Forex market is known to be one of the biggest, most liquid markets on the planet having trades worth trillions of dollars done every day. Forex market is an electronic network between banks, brokers, institutions and individual traders having no centralized location.
Forex markets allow trades 24 hours a day and five days per week. Trades cannot be executed at the weekends and during holidays when the markets are closed. Individuals are able to create a forex account and become eligible to buy and sell currencies.
Profits or losses in forex trading are determined by the difference in the price of the currency pair that was bought and sold for. Forwards and Futures are other types of methods to trade in the forex market.
- Forwards are the agreements between two parties for exchanging two specific currencies at a predefined time in the future. Forward contracts usually take place on a date after the specific date that the contract is settled and are used to protect the buyer from the price fluctuations in the currencies.
- Forex Future is also known by the names FX future, currency future, or foreign exchange future. It is a futures contract to exchange one currency for another at a predefined time in the future at a certain price that is agreed by both the parties on the purchase date. Most commonly one of the currencies used in Futures will be the US Dollar. The positions are generally closed a day before the expiry date in order to avoid settlement.
Scalping – it is the trading strategy, with the help of which traders make profits on their assets with the help of small price changes that occur within them. Scalping is not encouraged within Plus500 and if they find people trying using scalping methods while trading, their accounts will be blocked and terminated. Such accounts are found when a trader executes trades within 2 minutes.
Fees and Charges:
There are two types of fees that are applicable to the investors while trading with the help of an online trading platform. They are 1.) Trading Fees and 2.) Non-Trading Fees.
- Trading Fees – These are the types of fees that are applicable while trading is done. A few examples of trading fees are Commissions, Spreads, Financing Rates and Conversion Fees.
- Non-Trading Fees – These fees are generally not directly related to the trading. A few examples include Withdrawal Fees, Account Minimum, Inactivity Fees, Annual Management Fees, etc.
Trading Fees – When compared to most other online brokers in this category, Plus500 is known to offer services involving lower trading costs. When compared with the fees for typical trades of some of the popular instruments within each asset class, the trading fee comparison is carried out and it is given below.
The popular instruments that have been chosen based on different types of asset classes are:
- Stock Index CFDs – SPX and EUSTX50
- Stock CFDs – Apple and Vodafone
- Forex – EUR/USD, GBP/USD, AUD/USD, EUR/CHF and EUR/GBP.
Here the representative trade is buying a leveraged position and selling it after holding for a week. The volume of trades used to represent is $2,000 in the case of Stock Index and Stock CFDs, whereas, $20,000 for the Forex trades.
The leverage used below for each of the trades is 1.) 20:1 for stock index CFDs, 2.) 5:1 for stock CFDs and 3.) 30:1 for Forex. The benchmark fees given below include spreads, commission rates as well as financing rates.
CFD Fees – The trading fees for CFDs at Plus500 are low. No commissions are applicable while trading in CFDs. All the costs are included within the spread, which is the difference between ask and bid prices.
For a $2,000 long position at Plus500 that has been held for a week, the CFD fees are as follows:
- S&P 500 Index CFD fee – $2.1
- Europe 50 Index CFD fee – $1.3
- Apple CFD fee – $8.9
- Vodafone CFD fee – $7.6
Forex fees – At Plus500, the forex fees are considered to be average (neither low nor high). No commissions here as well and all the costs are included within the spreads.
For a $20,000 30:1 long position at Plus500 that has been held for a week, the forex benchmark fees are as follows:
- EUR/USD benchmark fee – $17.9
- GBP/USD benchmark fee – $14.0
- AUD/USD benchmark fee – $12.6
- EUR/CHF benchmark fee – $9.0
- EUR/GBP benchmark fee – $14.6
All the statistical data mentioned above has been attained from research on many other reviews conducted by independent reviewers. This data might actually differ currently, still the data is given in order to provide a general idea on the fees.
Non-Trading Fees – The Non-trading fees at Plus500 are considered to be average. The withdrawal fees are somewhat convenient for the traders. Plus500 offers 5 withdrawals per month that are free of cost. After exceeding that limit, each withdrawal costs $10. An additional $10 is applicable if the withdrawal amount is less than the minimum withdrawal amount (which is $100). If the withdrawals are done by a bank transfer, a fixed fee of $6 is applicable.
If the account experiences no trading activity for a time period of 3 months, an inactivity fee of $10 is also applicable. However, a person can just simply login to their account in order to avoid the inactivity fees unlike most other brokers, who make it mandatory to trade in order to avoid the inactivity fees.
There are no deposit fees or account opening fees applicable at Plus500. The minimum account balance that needs to be maintained is $100, which is very low when compared to many other rivals.
Some other types of additional fees such as Overnight Funding Fees, Currency Conversion, Guaranteed Stop Order, etc.
Opening an Account:
The account opening process at Plus500 is fast, easy and can be done online. The estimated time taken to open an account at Plus500 is around 24 hours. People from many countries are able to open an account at Plus500. Anyhow there are exceptions in the case of certain countries. For example, people living in countries such as the US, Canada, Iran, Syria, etc., are not able to use the services of Plus500.
There are no specialized account categories such as a company or corporate accounts available within Plus500 (only individual trader accounts). The important features such as maximum deposit, payment methods, etc., depending on the individual’s country of origin. Daily deposits of $300,000 are allowed which provide efficiency as the other specialized accounts (especially for clients having higher net worth) offered by rival platforms.
There are 2 account types available to the traders. They are the Standard Account and Professional Account. The standard account is the basic trading account which has a minimum deposit amount of $100 and offers max leverage of 1:30. The spreads are volatile, and no commissions are involved while trading.
In order to be eligible for the Professional account, the trader must have made at least 10 transactions per quarter in the previous year. This trading activity can either be with Plus500 or any other trading platform. The total worth of the trader’s investment portfolio must also be around EUR500,000.
The leverage offered to the investors with a professional account can be around 1:300 and additional benefits that are offered only to the retail customers can also be made use of.
The demo account is also offered at Plus500, which is free of cost and offers almost all the services as the other accounts. Beginner level traders can make use of the demo account in order to get familiar with the market conditions and learn trading techniques.
How to open an account – First, the trader would have to complete the online registration. After successfully completing the registration, identity verification and proof of residency have to be submitted. Individuals are able to verify their identity by submitting a copy of their ID or Passport. Bank Statement or a Utility Bill can be submitted as a proof of residency.
Deposits and Withdrawals – The services related to both deposits and withdrawals are exceptional. The process is simple and hassle-free. There are 10 base currencies available within Plus500 and the base currency can be changed upon the investor’s consent by contacting the support team. Selecting a base currency is very important in order to save the conversion fees.
‘Deposits’ – Deposits at Plus500 require no additional charges. The methods with the help of which a person is able to deposit money into their account are ‘Traditional Bank Transfer’, ‘Credit Card or Debit Card’, ‘Skrill’ and ‘PayPal’.
Time taken for a bank transfer can take a few days, whereas, the transfers made with the help of credit card, debit card, or e-wallets is instant. Deposits can be made from the accounts having the investor’s name only (which means they are owned by the respective investor).
‘Withdrawals’ – As we have discussed earlier, there is withdrawal fees for the first five transactions every month, and exceeding the limit $10 worth withdrawal fee is applicable. The amount lower than the minimum withdrawal amount can also cost an additional $10. The minimum withdrawal amount for PayPal is $50 and for Bank Transfers or Credit/Debit Card transfers is $100.
Similar to the deposits, withdrawals can also be made with the help of ‘Bank Transfer’, ‘Credit Card or Debit Card’, ‘Skrill’ and ‘PayPal’. The time taken for withdrawals with the help of cards or bank transfer can be around 2 days. The account should have to be in the name of the trader only.
Trading Platform:
Web-based Trading Platform – The web trading platform of Plus500 can be easily utilized and the design also looks good. However, the disadvantage is that it lacks customizability (for charts and workspace).
The web trading platform is available in many languages such as Arabic, Bulgarian, Czech, Danish, Dutch, English, French, German, Greek, Hebrew, Hungarian, Italian, Latvian, Lithuanian, Malay, Polish, Portuguese, Romanian, Russian, Slovakian, Spanish, Swedish, Traditional Chinese, Turkish, etc.
The design of the Plus500 web-based platform is nice, clean and user-friendly. Even beginner level investors can be able to easily navigate through it. However, a major disadvantage is that customization is not possible.
A two-step safe and secure login feature is available which makes it safer while logging in. Google and Facebook authentication is also allowed. This makes it even more convenient and hassle-free.
The search function is excellent, and individuals are able to find the products easily by typing the name of the product in the search bar. The alerts and notifications are good and available in the form of email, SMS and push notifications.
The order types available are ‘Market’, ‘Limit’, ‘Stop’, and ‘Trailing Stop’. The order time limits aren’t provided. Portfolio and fee reports are quite transparent. Details such as overnight fees and the composition of assets regarding the current portfolio are provided clearly.
Mobile Trading Platform – The mobile platform of Plus500 is similar to that of the web-based platform. The functionalities are the same and it is also a user-friendly platform. Mobile applications are available for IOS, Android and Windows platforms.
A two-step safe login feature is provided along with biometric authentication. The design is also pretty good and can be easily understood by the users.
There is no specialized and dedicated desktop platform available for Plus500.
Markets and Products:
Plus500 is a dedicated CFD and Forex broker. As the investors can only invest in CFDs and Forex, there is a wide range of CFDs to select and trade for investors. There is an availability of Cryptocurrencies as well. The product selection at Plus500 is as follows:
- Currency Pairs (#) – 70
- Stock Index CFDs (#) – 33
- Stock CFDs (#) – 1800
- ETF CFDs (#) – 92
- Commodity CFDs (#) – 22
- Cryptos (#) – 14
There is also an availability of trading with some Stock CFDs and Stock Index CFDs. A major disadvantage that needs to be concerned is that the investors cannot change leverage levels. It is a very essential feature for the people who wish to reduce their risk level.
Research and Education:
Plus500 provides an effective and interactive charting tool. It is user-friendly. The research options are limited. However, it would have been great if they would have provided trading ideas, fundamental data and an efficient news feed.
Education on the other hand is not that effective when compared to other brokers. They provide a demo account which is useful for beginners. However, they don’t provide platform tutorials and the educational videos are available up to a limited extent.
Customer Service:
The customer service provided at Plus500 is excellent and is available 24/7. The customer support can be approached with the help of Live chat or an email. There is no availability of Phone support, anyhow, they can be contacted on WhatsApp.
The live chat takes a few seconds to respond, whereas, the email support responds within an hour.
Safety:
Plus500 is regulated by many financial authorities and is listed on the main market of the LSE (London Stock Exchange). They also offer Negative balance protection, which is very useful for investors. The financial information of Plus500 is publicly available. The disadvantage is that they do not hold a banking license.
Overall Verdict:
Plus500 is an excellent online trading platform for the people who want to make trades in CFDs and Forex. The individual ratings given by various famous independent review websites is as follows:
| Website: | Rating: |
| BROKERCHOOSER | 4.4 |
| FX EMPIRE | 4.1 |
| INVESTOPEDIA | 3.7 |
| TRUSTPILOT | 1.6 |
Advantages – Some of the major benefits offered by Plus500 to its customers are as follows:
- User-friendly platform
- Low trading fees when compared to other brokers
- Listed on the London Stock Exchange and regulated by top – tier financial authorities.
- Availability of more than 2500 CFDs to make trades, which cover various types of asset classes.
- No Commissions
- Multilingual Customer Service available 24/7
- Availability of cryptocurrencies such as Bitcoin, Ethereum, etc.
Disadvantages – The notable disadvantages while trading with the help of Plus500 are as follows:
- Lack of informational resources, analysis, a news feed, etc.
- Lack of social trading options
- Even though the customers can trade with more than 2500 trading instruments, tools used to analyze them are very few.
- Lack of phone support.
- Lack of updated market news and trader education.
- Limited Products for designing portfolio as there is only availability of CFDs & Forex.
- There are plenty of negative TrustPilot and other reviews online but also many positive client experiences as well.
Conclusion
People who want to trade CFDs and Forex can use the services offered by Plus500. However, the most important thing that everyone should remember is that people who invest in CFDs tend to lose all their money and around 80% of the investors lose their money when they trade with the help of this broker. It is essential that any investor who wants to make trades in CFDs should acquire good knowledge on this topic.
Any quick decisions taken by investors can result in losing most if not all of the money invested by that person. Knowledge about CFDs can be attained by consulting a good financial advisor (like us) or gathering information by conducting online research. However, we suggest that a person should opt for the former among the two options.
That being said, if you are an investor looking for services ranging from financial advice to wealth management or if you are a busy person with no time to take care of your investments, you can make use of the services offered by us.
Further Reading: What are the Best Investment Options for Canadian Expats in 2023 discusses strategic investment choices, akin to insights found in the Plus500 Review 2020.
