Hello, fellow investor! We will review Plus500 to help you find out whether it is the right investment platform for you.
We recommend Plus500 if you are a trader in Europe looking for a reliable broker with competitive spreads and a wide CFDs product portfolio.
Plus500 is available in over 50 countries, including Australia, South Africa, and Singapore. Besides, it is also listed in the London Stock Exchange (FTSE 250 Index), meaning it must disclose its financial statements, and it is regulated by top-tier regulators like the FCA in the UK.
At the moment, Plus500 is not available in the US. As such, this review does not apply to US residents.
That’s Plus500 in a nutshell. If you want a more detailed review about the broker keep on reading, here’s what we’ll cover:
Founded in 2008, Plus500 is an online broker based in Israel that exclusively offers CFDs within a wide range of financial products (2000+) such as forex, indices, shares, commodities, options, ETFs, and cryptocurrencies. As stated on their website: the principal activity is “online trading in ‘contracts for difference’ (CFDs) delivered through a proprietary trading platform via the web and other electronic channels.”
The platform you will be using is the WebTrader, Plus500’s proprietary platform, offering a stable trading experience and easy access from multiple devices, including a mobile app. In Webtrader, you will not miss any essential features since you will encounter an intuitive and customizable dashboard, watchlists, and technical analysis tools. However, Plus 500 does not makes available the popular MetaTrader 4 (MT4) platform. We strongly believe that this is only a drawback for really experienced traders.
Take a glance at the Plus500 dashboard:
Some brokers provide webinars, courses, and other educational materials to help clients efficiently gauge their investment strategies, but Plus 500 offers no relevant educational materials. The only tool it displays is the “Trader’s Guide”, which is just “how-to” videos. It is only advised for first-time traders.
Trading sentiment can be a huge component of trading success. Given that, the broker grants you access to a “Traders’ Sentiment” indicator that shows what percentage of Plus500 clients are buying and selling a certain instrument.
Plus500, as one of the leading providers of CFDs, provides competitive spreads and product portfolio compared with its competitors, like eToro or XTB. Nonetheless, it will charge overnight funding fees, currency conversion fees, and an inactivity fee (10 USD per month after no login activity in 3 months).
It also offers a Demo account for free so that you can explore the Plus500 Webtrader with virtual money!
|🗺️ Supported Countries||+50 countries – Exceptions include the US and Canada|
|💰 US Stocks fees||$0.006 per share|
|💰 CFDs fees||Low|
|💰 Currency Conversion fee||0.30%|
|💰 Inactivity fee||$10/monthly after 3 months with no activity|
|💰 Withdrawal fee||€/$/£0|
|💵 Minimum Deposit||€/$/£0|
|📍 Products offered||Stocks, ETFs and CFDs|
|🎮 Demo Account||Yes|
|📜 Regulatory entities||FCA, CySEC, ASIC|
2. Pros and Cons
- Easy-to-use and responsive platform
- Low spreads
- No dealing commissions
- Demo Account
- Top-tier regulators
- Only CFDs
- Inactivity fee (10 USD per month after no login activity in 3 months)
- High overnight funding fees
- Very little research and education provided
- Doesn’t allow scalping
3. Fees snapshot
In comparison to other online brokers, Plus500 does not charge dealing commissions. Their primary source of revenue comes from spreads. To make sure you understand what a spread is, let’s use the following example: You are trading EUR/USD. If the ask price (the price you buy) is 1.21066 and the bid price (the price you sell) is 1.21058, Plus500 will earn the difference (a market spread of 0.8 pips – see image below).
Other fees included are the following ones:
- Overnight funding: It is another name for a daily interest rate. Remember that by trading CFDs, you are using leverage. In essence, you are being lent money in addition to your initial deposit, and, as you may imagine, that comes at a cost;
- Currency conversion: If you have EUR and want to invest in USD denominated security, you must first convert your EUR to USD. That process comes at the cost of up to 0.5% for each time you do that translation (yeah, when you sell your USD asset, you will be charged again).
- Inactivity fee: If you do not log into your account in a consecutive 3 months period, a 10 USD monthly fee will be applied. It stops charging you as soon as you log in back again.
Besides, there is a particular type of fee that comes with an advantage to you, it is purely optional, and it might be handy in volatile markets: “Guaranteed Stop Order”. It is an excellent way to protect yourself against extreme market turmoil (see more details on the “Safety and Regulation” section). The fee associated with it is charged via a wider spread.
Plus500’s fees are pretty competitive in the brokerage industry. Plus500 website denotes transparency about all involved costs, enabling quick comparisons and calculations. Still, you will only be able to see some fees on “Details” (next to the instrument’s name) inside the platform and not on their website. So, before placing an order, make sure to give it a double-check.
4. Safety and Regulation
Plus500 is a trademark of Plus500 Ltd, which operates with several subsidiaries, giving it more than one regulatory approval. The primary regulator of Plus500 is the Financial Conduct Authority (FCA) in the UK which is among the strictest regulators in the world. The reputation of both, Plus500 and FCA, leaves us comfortable in what concerns the platform’s safety.
Keep in mind that the Investor Protection Scheme does not apply uniformly for all Plus500’ clients. For instance, a UK investor is protected under the Financial Services Compensation Scheme (FSCS), up to £85,000. Still, a German investor, for instance, is subject to the Cyprus Securities and Exchange Commission (CySEC) legislation which has a maximum protection amount of €20,000 per person per institution.
As mentioned in the “Fees Snapshot”, Plus500 entrusts an additional layer of safety by giving you a “Guaranteed Stop Order”, not a common practice in the financial industry. This feature can only be enabled with specific conditions (more info here), but the message is clear: “it will force the position to close at your chosen rate (price) even if the market price surpasses it”. In other words, you have no market gap risk. As an illustration, let’s imagine you buy a CFD of Apple for 100 USD, and you set a stop loss at 95 USD. The next day, Apple opens dropping 10% in value and now is quoting at 90 USD. You would still sell your position at 95 USD, not at the current market price (90 USD).
Finally, following the August 2018 restrictions in CFD trading by the European Securities and Markets Authority (ESMA), Plus500 provides negative balance protection for Forex and CFD trading on a per-account basis, but only to retail clients from the European Union. What does that mean? Imagine that you deposit 1000€ in your account and open a position with a 5:1 leverage. This increases your exposure to 5000€. If the market dropped 25%, you would lose 1250€ (25%*5000€). As you can see, it is above your initial deposit of 1000€, meaning that you would owe 250€ to your broker. With ESMA regulation, your account balance is automatically readjusted to 0€, so you only lose your deposit. (more info here).
Do you want to read a deeper analysis? Check out our dedicated article on investment protection (for EU investors)!
5. Accepted Countries
Plus500 operates mainly in Europe, but it is already present in over 50 countries. Traders from Belgium, Iran, the United States, Canada, Zimbabwe, Nigeria, Cote D’Ivoire, Cameroon, Thailand, India, Indonesia, Brazil, and Egypt are not allowed to use Plus500. Make sure to check Plus500’s website to check if Plus500’s services are available in your country and avoid misleading information.
Make sure to check Plus500’s website to check if Plus500’s services are available in your country and avoid misleading information.
72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
Past performance is not an indication of future results.
¹ By total number of relationships with UK CFD traders, Investment Trends 2020 UK Leverage Trading Report.