Welcome to this review of the CFD provider Plus 500.
Please note: 76.4% of retail investor accounts lose money when trading CFDs with this provider.
Over the years, there has been a significant increase in the number of CFD providers, and Plus500 has established itself as one of the best.
* By number of new traders (2018)
Full Review of Plus 500
In this review of Plus 500, we are going to look into the brass tacks of this trading platform to help you make an informed decision based on proper Plus500 scrutiny. Some years back, only large companies and financial institutions took part in derivative trading, especially in the contract for differences commonly referred to as CFDs. However, the internet has dramatically disrupted this trading sector.
The luxurious trade that was once for the rich has now been made available to the commoners as you will realize in this Plus 500 review. You can now trade from anywhere, on any device that’s connected to the internet and with any amount that you wish to invest.
What is Plus 500?
This is a global CFD provider that allows forex traders, crypto traders, and other derivative traders to access markets where they can buy and sell their instruments. It is a UK-based company with its headquarters in London.
However, the Plus500 CFD provider is only but a subsidiary of the Plus500 limited company that’s based in Israel.
Brief History of Plus500
In 2008, a group of six alumni from the Israel Institute of Technology came up with the Plus500 trading platform idea, and together they set out to make it happen. With a capital of $400,000, the team launched the company in 2008.
When it was first launched traders could only trade from their computers because the initial platform could only run on Windows operating systems. However, in 2010, the company launched the web-based trading platform, which made it possible for Mac and Linux users also to trade.
It is essential to point out that during the same year, when the company launched its online trading platform, they also added ETFs to their portfolio. As a result, the platform grew at a rapid rate, and by 2011, the platform recorded a monthly two million transactions.
To bring on more traders, the company also launched an application for iPhone users that they could use to manage their trading activities. It was in the following year, 2012, that Plus500 released the android application.
Five years down the line after launching, Plus500 went public being listed in the London stock exchange. Probably to make their year of going public more special, Plus500 introduced the first crypto into CFD trading.
Over the years, Plus500 has accomplished several great things, including being the main sponsor for the Spanish club Atletico Madrid, among others. Currently, Plus500 is one of the leading mid-range listed companies.
Is it Safe to Invest with Plus500?
How secure is the platform? Is it regulated? As a proactive investor, this is some of the concerns that you may have concerning any trading platform. When it comes to the Plus500 provider, it is important to point out that it is one of the most regulated CFD providers in the world as you will see in our review of plus 500 platform.
It is licensed by the Financial Conduct Authority. Other regulators include the Cyprus Securities and Exchange Commission, Australian securities and investments commission, and even the Monetary Authority of Singapore.
With all these international regulators, it is safe to say that Plus500 is a trustworthy platform that you can trade with. The trading environment is well regulated, and traders can rest assured that they are protected.
However, it is important to point out that research has proven that 76.4% of the investors on Plus500 lose their money when trading contracts for differences. It is therefore advisable that you only trade if you can afford to lose your money, and if you have a safety net to land back on, in case the risk occurs.
Trade Instruments Available on the Plus500 Platform
You can trade on forex and several contracts for differences such as indices, shares, cryptocurrencies, ETFs, commodities, and options. You can visit all the instruments page on the Plus500 official site to view the full list of instruments that they have.
At the time of writing this review of plus 500, there were 31 indices, 22 commodities, 15 popular shares, 72 forex pairs, 14 cryptocurrency pairs, and 95 ETFs.
How Can You Open an Account with Plus500?
Related article: Step-by-Step Guide to Opening a Plus500 Account
Account opening is done online, just like with all other CFD providers. You will be required to give out your email address and enter a password so that you can initiate the account opening process. You can decide to use your Facebook account to login, or with your Google account. Either way, the process remains easy.
As a new trader, you will be required to submit some documents to prove your identity, physical address, and even the source of your money. This is part of the regulatory measures put in place by the regulators under which Plus500 operates.
To verify your identity, you will have to upload a national ID or a passport that shows your names, identity number, date of birth, and a photo of you.
For the verification of your address, you will be required to submit either a bank statement, tax letter, or any other utility bill.
Lastly, to prove that you are the owner of the money used to trade, you will be required to provide a photo of your credit or debit card.
Account Types of Plus500
If you want to start with some training to familiarize yourself with how the platform operates, opening a demo account is the best solution for you. This type of account is risk-free, and it is also easy to use. There is no real money required, and the virtual money you are given is enough to help you learn a lot.
When registering on the Plus500 platform, select the ‘demo account mode’ when you are asked to choose an account mode. The only difference between the real account and the demo account is the use of real money in real accounts; otherwise, everything else is the same.
It is important to note that when using the demo account, your balance may get exhausted, and at this point, Plus500 will automatically reinstate the initial amount. This ensures that you continue practicing until you are fully ready to trade. Unlike other CFD providers, you are not given a time limit when using the demo account.
Additionally, you can decide to keep your demo account even when you open a real account. This allows you to swap from between the two accounts if you still need to learn about the platform. Your Plus500 app or website platform will always provide you with an option to switch, which ensures that everything is smooth.
This is the second type of account, commonly known as the real account. You will require a minimum of $100 to open this account, and it has a leverage of 1:30 with a variable spread and zero commissions.
With a real account, you can also opt to upgrade to a professional account. For you to qualify to apply for this account, you must have a record of more than ten transactions with your standard account, in the past year.
The good thing is, you can use transactions done with other providers to qualify you for the Plus500 pro account. Additionally, you must have an investment portfolio that exceeds EUR 500,000.
The good thing with the pro account is that it has better leverage of 1:300. You will also get to enjoy all benefits without being charged and equal negative balance protection offered for the standard account.
However, it is important to point out that once you opt for the pro account, you immediately lose access to the services of the financial ombudsman service. Therefore, in case of any dispute, the FOS will not intervene to help you solve it.
Features of Plus500
Our review of plus 500 was able to look at the following features:
To ensure that clients are satisfied and well taken care of, Plus500 provides various mediums through which they can be contacted. On their site, there is a contact us button that’s at the bottom right corner. Click on the button, and you will be given an option to chat with an agent or send an email to them.
To chat with a representative online, you will have to enter your name, the subject of your issue, and a description of what you need help with. The chat option is available 24/7.
The platform also provides a list of those questions that have been frequently asked with detailed answers. If you cannot find a response to the issue you need to be addressed, you can then proceed to contact them through email or the chat option.
The main drawback with the customer support issued by Plus500 is that it lacks a call option, yet the replies are not instant when using the chat option. This makes it difficult to get immediate help when it is urgent.
One of the safety measures taken by Plus500 is keeping the client funds separate from their operating funds. The platform ensures that all client funds are not used to carry out any activity of the platform.
Additionally, no client money is invested elsewhere. Because of these measures, if the Plus500 goes bankrupt, the FCA will compensate clients to a tune of £85,000.
Safety is one of the top priorities of the Plus500 team. The platform uses SSL technology to protect data that’s shared by clients. It also subscribes to the anti-money-laundering policies, which help to ward off any laundering activity.
It is important to note that the site also has in place several risk-management tools that help to enhance the safety of all traders.
Ease of use
Plus500 makes it easy even for amateur traders to use the platform by providing the demo accounts. Once you’ve familiarized yourself with the platform and can trade, there are several instruments that you can invest in on the platform.
If at any point, you face some challenges when trading, you can always contact the customer support team for help.
Another feature that makes it easy to use the Plus500 is that it can be translated to over 30 languages.
Though necessary, Plus500 lacks enough research tools to make it easy for its clients to trade. Some of the research tools provided include the price alert notification and the economic calendar. Plus500 also provides charting tools, but they are not as comprehensive as those found with other CFD providers.
To trade well with any CFD provider, you need to have a good understanding of all the trading tools and how the platform operates. Plus500 has taken that into significant consideration and provides a good selection of educational materials. You can watch videos that explain almost every concept of CFD trading. Plus500 also continues to create more educational material to keep their clients informed.
However, it is important to not only rely on the education material provided by the platform. Carry out your research on the markets and trading charts.
Pros and Cons of Plus500
It is important to point out that plus500 is not like other CFD providers as you will notice from this review of plus 500. The platform has some differences.
Unlike other CFD providers, Plus500 only provides its clients with the proprietary award-winning trading platform. It was rewarded Europe’s #1 CFD Trading Platform for number of new users in 2018. This is not something that’s expected of a large provider like Plus500, considering other CFDs providers do offer the MetaTrader trading platform.
Related article: #1 Best Forex Broker in Europe
The good thing with Plus500’s proprietary trading platform is that it was created with the retail trader in mind. As a result, it is one of the most user-friendly trading platforms in the industry. New traders and even the pro ones can easily place trades and navigate the platform without any difficulty.
However, the main disadvantage with the Plus500 proprietary trading platform is that it does not provide automated trading; it lacks advanced trading functions and does not support third-party trading plugins.
It would be nice if Plus500 introduced the MetaTrader, but this is a feature you can find on any other platform. Therefore, it makes great sense to see that Plus500 has stuck to its trading principles right from the beginning and is offering something solid.
If any new trading feature is added, we will be sure to update our review of plus 500 to help you learn about it.
Understanding how the Plus500 software works
Our plus500 CFD provider review would not be complete without explaining how the trading software works.
Once you are on the home screen of the trading software, you are able to see the trading actions that you can take. You can initiate a trade using the trade button. It is important to note that the open positions are those trades that can be executed while closed positions are those trades that have already been completed.
Another thing that the software does is that it provides you with all the financial instruments that are available for you to trade in. When trading, you can see the available balance in your account, which is placed at the bottom left of the screen.
Before you start trading, there are certain parts of the trading platform that you need to be familiar with, that we’ve discussed in this review of plus 500. They include:
Opening a position
You can open a position on any of the instruments available for trade. Once you close this position, the profit or loss you will have made will be final. When the position is open, there is a lot that happens.
It is important to point out that when you open positions to trade, you have two options: to either short or buy. If you decide to buy, the balance in your account increases if the value of the instrument you are trading on increases. On the other side, if you short, your account balance decreases if the value of the instrument drops. Deciding to buy or short is critical because if you make a wrong decision, you will only make losses.
Closing a position
It is important to note that on Plus500, you can trade with more money than you have in your account. This is made possible through the leverage offered by the platform. What this means is that id the leverage is one to thirty, you can open a position, which is thirty times the amount of money you have in your account.
You will come across two margins when trading: the initial margin and the maintenance margin. The initial margin shows the amount you require to open trade while the maintenance margin shows the minimum amount that you require to maintain the position open.
If you decide to close a position, you can do so by pressing a close position button that’s adjacent to the open position button. It is important to point out that losses are indicated in red and profits in green.
Controlling your trades
Learning how to control trades is important if you want to improve in your trading. If you want to retain profits made, press the stop loss, and take profit functionalities. It is advisable always to use the stop loss function so that you are not forced to keep a constant eye on the open position.
Tip: if you want to make good profits, set your take profit at a figure twice as large as the stop loss figure. This reduces the risk of making absolute losses.
Spreads and trading fees
When making our review of plus 500, we realized that Plus500 gets its profits from the spreads in the markets. To get a clear understanding of how the spreads benefit the platform, let’s take a look at this example if a USD/EUR trading pair has a buy rate of 2.2424, then that pair will have a sell rate of 2.1414. The difference between the buy rate and the sell rate is what’s referred to as a market spread.
Plus500 does not charge commissions as is with other providers. It is only through the spreads obtained from the more than 2,000 CFD instruments and, at times, the losses incurred by clients that Plus500 makes profits.
Compared to other providers in the industry, Plus500 has relatively lower fees, especially on its cryptocurrency pairs.
However, it is important to note that our plus500 analysis shows that there are certain extra fees charged by Plus500 depending on your trading activity. They include:
With the overnight funding, it can either be added or subtracted from your funds. It occurs when you hold a position in the market over a given period.
Currency Conversion Fee
When you trade on any given instrument using different currency with that in your account, Plus500 will charge you a small fee. This is what is referred to as the conversion fee. It is important to note that this fee is always reflected in real-time on the unrealized losses or profits of a position that’s still open.
Guaranteed Stop Order
This is an order that’s available for you to manage your trading risks by providing the stop loss level.
Using this feature to manage your risks will subject you to a wider market spread. However, it will help you by ensuring that your position closes at a time that you want it to.
If you fail to log into your account for more than three months, Plus500 will charge you an inactivity fee of $10 per month. It is important to note that this fee is only charged every month after the third month elapses, until the day you will log in again.
Funding of Your Plus500 Account and Payments
Plus500 allows its clients to transact using PayPal, Skrill, debit and credit cards, Neteller, and Wire transfers. It is also important to point out that the platform also provides regional payment options, but you can only get this information if you are a client.
As a committed provider, Plus500 covers most of the payment processing fees. However, there are transactions where you may have to incur extra charges when making deposits and withdrawals. These charges are not set by Plus500 but by your local bank or any other third-party payment processor you may be using.
From the above review of plus 500 it is clear that it is one of the best in the industry and if you want to trade in a safe environment, then trade with Plus500. However, it is important that you always keep it mind that there are great risks associated with trading options, indices and other instruments. The platform may be good but without having the appropriate knowledge, you may make great losses that will discourage you immensely.