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Plus500 Review – Is it Safe?

Here’s the creditmarketdaily.com review of the Plus500 CFD (Contract For Difference) trading platform.  Plus500 was one of the first brokers of its kind to provide such a wide range of trading instruments for retail clients.  These include UK and US stocks, forex pairs, ETFs and national indices. Be aware that your capital is at risk when trading CFDs.

At a Glance

  • Founded in 2008 and listed on the London Stock Exchange (AIM)
  • Plus500 is a CFD service suitable for experienced traders
  • CFDs are the only products available on Plus500
  • Low spreads are offered
  • Your money is held in segregated accounts for protection purposes

Plus500 Review: What’s on Offer

With a very large user base, more than two million transactions per month were taking place on the platform back as early as 2011, only three years after launch. Plus500 offers trading in Contracts for Difference (CFD) in indices, commodities, shares and Exchange Traded Funds (ETFs).  The company has fast become one of the largest brokers in Europe and Asia. It’s available on desktop PCs as well as on mobile devices.

Plus500 is one of the more comprehensive online trading platforms in that it allows users to trade a wide variety of instruments in more than 50 markets.  Finding instruments to trade is made trivial using the search facility and, as you’d expect, real-time streamed quotes are readily viewable.

As well as the ability to short or buy any instrument, you can choose to close a position on a specific profit or loss figure.

Getting Started

There is wide coverage of the many markets from around the world available on Plus500, which makes it difficult to beat unless you have access to an investor account which are of course very expensive.  Taking a look at how to get started, Plus500 gives you the ability to open a demo account initially and this can be set up in all of a few minutes.

If you don’t want to download any software, there is also the ‘WebTrader’ option which can also be used in demonstration mode.  Both of these simulate the real thing and it’s recommended that newbies start off with this to get a feel for the software.  You can test it out with virtual money to see how you like the platform before taking the plunge into real money trading.

Plus500 Desktop

Analysis of carts using WebTrader using a web browser is really simple thanks to the easy to use layout on the platform. They have an absolute plethora of technical indicators available to choose from, and it really is a doddle to do things such as change time frames in the viewer window.

You’re able to use the platform to trade on movements in the prices of commodities, shares, indices, forex, ETFs and options without the need to buy or sell the actual underlying financial instrument.  The shares include well-known companies from the UK, EU and the US.

It is clear that the designers have done their level best to make this as simple to use as possible. Each category within Plus500 is broken down into separate menu items at the top of the page.

You have four trading tabs to use within each of these: Trade, Open positions, Orders and Closed positions. Again, all very easy to understand. Looking at the ‘Trade’ tab, let’s say that you wanted to put in a sell trade. All you need to do in this case is press on the ‘Short’ button.  Likewise, you press the ‘Buy’ button to open a long position.

Plus500 Fees – What  Does it Cost to Trade?

One of the features of Pus500 is that there are no commissions.  That’s right, most of their services are provided free of charge. They don’t charge anything whatsoever for making deposits, opening or closing trades. In other words, there are no dealing commissions to pay by the user.

You may well ask, therefore, with no commissions, how does Plus 500 make money? It’s simple; They are compensated by the money that they make from the difference in their bid/ask (buy and sell) spreads. So, it’s already built in, and you can actually see what the spread is by clicking on the ‘details’ icon and going to the ‘Info’ section.  It looks like this:

The spreads are sometimes fixed and sometimes dynamic (variable).  If you want to know which type a particular instrument is, you will need to ask customer support.

Do be aware, however, that fees may become applicable in certain circumstances.  This is in one or more of the following situations and you want to really make sure that you understand them:

  • If you stop using the platform (i.e. if you don’t log in) for more than three months.  It’s an inactivity fee of $10 USD per month, so make sure that you don’t get stung by this by logging in at the requisite intervals to avoid paying it. This is one that is not hard to avoid, and it would be very irritating to need to pay this
  • If you have held a position for a certain length of time.  They call this the ‘Overnight Funding’ amount
  • If you’ve taken part in a trade that is in a different currency to that of your account’s base currency, there is a currency conversion fee of up to 0.3% of the trade’s realised profit and loss
  • If you use the guaranteed stop order function, which makes the particular trade subject to a wider spread

Language Options

Plus500 is available in multiple languages, 32 in total at the time of writing.  These include English, Arabic, Bulgarian, Chinese, Croatian, Czech, Danish, Dutch, Estonian, Finnish, French, German, Greek, Hebrew, Hungarian, Icelandic, Indonesian, Italian, Japanese, Korean, Latvian, Lithuanian, Malay, Maltese, Norwegian, Polish, Portuguese, Romanian, Russian, Serbian, Slovak, Slovenian, Spanish, Swedish & Turkish.

Customer Service

In terms of support for its users, Plus 500 is handled via email or live chat. What, no telephone support?  That’s right.  Annoying for many of us who like to speak with our voices. On the positive side, the text support is available 24 x 7 and the people there seem to be fairly responsive.

Deposit fees and methods on Plus500

Depositing money into Plus500 can be made via the usual payment channels including bank transfers, debit cards as well as online wallet payment systems such as PayPal & Skrill.

The fastest deposit methods that we’ve seen are debit cards and online wallets – it takes just a few seconds to appear in your account. Transferring via bank transfer could take two or three working days to come through, though. The banking system is so poor in this respect.

Withdrawal fees on Plus500

In terms of getting your money out of a Plus500 account, you’ll want to be aware of a few things. If you’re like me, you’ll have been hit with charges in the past and kicked yourself for not making yourself familiar with them.

First, there is no withdrawal fee for the first five withdrawals in any given month. That’s good, but be aware that it will cost $10 for every subsequent withdrawal! So, my tip is to save your money by observing these rules.

However, keep reading the fine print and you will find out that there is a minimum amount that must be withdrawn ($50 for PayPal transactions and a $100 for debit cards and bank transfers), and doing any less than this will also incur a $10 fee.

Regulation & Locations

It’s always good to know where companies are located and who regulates them. Plus500 has office locations in the following countries:

  • United Kingdom: Plus500UK Ltd, 78 Cornhill, London EC3V 3QQ.  Plus500UK LTD is authorised and regulated by the Financial Conduct Authority (FRN 509909)
  • Australia: Plus500AU Pty. Ltd., Level 19, 1 O’Connell Street,  Sydney NSW 2000. Plus500 AU LTD is regulated by the Australian Securities and Investments Commission (ASIC)
  • Singapore:  Plus500SG Pte. Ltd., 18-07 Temasek Ave, Singapore. Plus500SG is regulated by the Monetary Authority of Singapore (UEN 201422211Z) and International Enterprise Singapore (#PLUS/CBL/2018).
  • Cyprus: Plus500CY Ltd, 1 Siafi Street | 3042 Limassol. Plus500 CY LTD is authorised and regulated by the Cyprus Securities and Exchange Commission (Licence No. 250/14)

Trading in CFDs isn’t for everyone, and it’s important that you know that trading them is a high-risk strategy and you could end up losing your money.  As it states on the Plus500 web site:

Remember that CFDs are a leveraged product and can result in the loss of your entire deposit. Trading CFDs may not be suitable for you. Please ensure you fully understand the risks involved.

Because there is a high risk of losing money, you clearly need to ensure that you should consider whether you can afford to take the high-risk consequences of using it.  76.4% of retail investor accounts lose money when trading CFDs with this provider. No one likes to lose money at any time, but least of all when it can ill be afforded.

If you are based in the UK and a client of Plus500, your funds with them fall under the ‘investments’ category for claims.  The cover is up to £85,000 per person.

Do Plus500 Allow Scalping?

If you’re unfamiliar with this term, a scalper is someone who enters the market and places a massive trade with the intention to quickly exit by making their profit from relatively small price movements. This kind of activity can take place in a matter of just a few minutes or even seconds.

It appears that Plus500 does not welcome such activity, as evidenced by several accounts from those who have attempted it. Therefore, this is not something that you should be thinking about doing if you want to use this platform.

That concludes this Plus500 review.  Terms and conditions apply so, as with everything where you are risking your own money, always be sure to read the fine print.