Plus500 is a thriving CFD trading platform, but how does it stack up against other brokers? While you might have opened a particular trading account based on a friend’s recommendation, taking financial advice from friends is rarely a smart move — unless you’re rubbing shoulders with Warren Buffett or a crypto whale.
Your journey starts with the investment vehicle you choose. So, do you want to ride in a Tesla or a Toyota?
Read on to see what you’d be driving with Plus500.
(Related: Best Share Trading Platforms In Australia).
- User-friendly interface: This makes it accessible for beginners and experienced retail traders. The platform is designed to be easy to navigate, with a clean and organised layout.
- Contract for differences: Plus500 offers access to over 2,800 contracts for differences (CFDs)—more on that later.
- Risk management tools: Features like stop-loss orders, trailing stops, and guaranteed stop orders help traders limit potential losses and maximise profits.
- Commission-free trading: If you plan on trading regularly, your fees can quickly wipe out your gains. But not with Plus500. They make their money through the market spread (the difference between an asset’s buy and sell prices).
- Customer service: Limited to email support and WhatsApp chat. This can be stressful if you need an immediate solution over the phone.
Plus500 At A Glance.
|Trading fees to watch out for||Commission-free trading on all assets. Market spreads apply to all trades. Guaranteed stop loss order fee (GSLO). Overnight funding fees.|
|Non-trading fees to watch out for||USD$10 per month inactivity fee after 3 months of inactivity. Currency conversion fee of up to 0.7% on the trade’s net profit or loss.|
|Available share markets||ASX, NASDAQ, NYSE, LSE and SSE.|
|Available CFD markets||Forex, shares, indices, cryptocurrencies, commodities, ETFs.|
|Available crypto markets||CFDs on all major coins and a small range of altcoins.|
|Available forex markets||65 global currency pairs, up to 30:1 leverage|
|Support||24/7 online chat and ticket support|
|Trading platforms||Proprietary web trading platform, mobile app for iOS and Android.|
Is Plus500 Good for Beginners?
First of all, this is the wrong question to ask.
If you’re an absolute beginner, CFD trading is not for you.
CFDs are incredibly popular due to the leverage options that enable traders to control larger positions with a smaller initial investment. This, however, comes with increased risk and higher fees.
Even Plus500 is quick to point this out in their disclaimer:
But if you’re a relatively seasoned trader and want to venture into the world of CFD trading, you can learn the ropes in Plus500’s trading academy. It offers a 30-page eBook, a library of how-to videos, training resources, and FAQs.
(Related: Best CFD Trading Platforms In Australia).
Is Plus500 Good For Expert Traders?
Experienced traders may find the lack of tradeable CFDs somewhat limiting. With roughly 2,800, Plus500’s range isn’t as strong as some of its main competitors.
However, expert investors will appreciate the research and analysis tools that Plus500 provides. These insights allow you to:
- Delve into comprehensive research resources.
- Stay abreast of market news and upcoming events.
- Track and measure fundamental performance data.
Plus500’s economic calendar is particularly helpful for seeing short-term events influencing asset prices.
(Related: What Are ETFs)?
Also, their advanced charting tools allow you to see the historical price activity of instruments and apply a full range of technical analysis techniques. Some chart types you can access are:
- Hollow Candle.
- Coloured Bar.
- Line Break
One of my favourite features is the Multiple Charts tool which allows you to compare different instruments side by side. You can view up to 9 charts at the same time in Full Screen.
Other online trading services allow multiple chart views, but I found theirs clunky and frustrating.
Where Plus500 Stands Out.
Plus500 impressed me in a few key areas that benefit beginner and professional traders alike. So, what puts the platform ahead of its competition?
1. Plus500 Fees.
The lack of commission fees sets Plus500 apart from other CFD brokers.
Even smaller traders or those with limited capital benefit from this because the absence of fixed trading commissions allows for smaller trades without disproportionately high fees.
2. Plus500’s Advanced Trading Tools.
Plus500’s Insights is one of the most advanced tools I’ve seen on investment platforms. And it’s completely free for all users regardless of whether you’re a professional or retail investor.
It aggregates millions of data points, such as the most profitable trades and trader sentiment, and empowers you to make wiser investment choices.
This is the dawn of AI investing, and it’s exciting to see where it will lead us.
The only challenge is if this tool becomes widely adopted, it could artificially inflate an asset’s price, leading to overvaluations.
3. Plus500’s Alerts & Notifications.
The market moves quickly, and you want to be ready to buy or sell when the moment is ripe. This is all made possible with Plus500’s alerts and notifications functionality.
You’re in complete control of those notifications, so you can designate when certain prompts are triggered based on factors such as asset price, percentage change, and even trader sentiment.
Where Plus500 Falls Short.
I want to be candid about Plus500’s detractors so you can decide whether it’s a good fit for you.
1. Limited Range of Assets.
It has its niche (CFDs), and it serves that niche particularly well, but the range of options across other assets is limited.
For investors looking for an all-in-one trading broker where they have access to a greater range of shares, cryptocurrencies, forex trading, and other assets, another platform might be more suitable.
2. No MetaTrader 4.
For seasoned investors, it’s a real shame that Plus500 doesn’t offer MT4.
So many of Plus500’s competitors have this functionality (such as IG) — they really need to offer more advanced analytical solutions and collaborate with more third-party providers.
3. Inactivity Fees.
If you fail to log in to your trading account for three months, you’ll be charged US$10 monthly.
If you plan to hold positions for the long term, you’ll need to set reminders and keep logging in to avoid the inactivity fees. Annoying, I know.
Plus500’s Fees, Spreads, Commissions And Charges In Detail.
Investment platforms that overcharge on fees can devalue your investment portfolio over time Let’s see how Plus500 stacks up.
1. Bid-Ask Spread.
Each trade is different, so no precise percentage is applied ubiquitously. An instrument’s bid-ask spread reflects a particular asset’s supply and demand.
A narrower bid-ask spread suggests a general consensus on the price of an asset. A wider spread indicates the discrepancy in the perceived value of an asset between buyers and sellers.
The spread is the difference between the buy and sell prices. Here’s a simple calculation:
Take a look at some example spreads on Plus500:
|CFD||Sell ($)||Buy ($)||Spread ($)||Spread (%)|
All prices are in USD and are accurate as of 1st June 2023.
2. Currency Conversion Fees.
A currency conversion fee of 0.7% is applied to the trade’s net profit or loss. Here is an example to get your head around:
- Your trading account is denominated in EUR, and the EUR/USD rate is 1.10101.
- You open a USD $500 Meta sell position and make a loss of -$10.
- The currency conversion fee will be 0.7% of your position’s net loss, that is, -$10 * 0.7% = -$0.07.
This means your overall net loss is -$10 minus the conversion fee of $0.07, which equals -$10.07.
3. Overnight Funding Fees.
Be mindful of overnight funding fees on leveraged trades. If you hold a position overnight, you’re charged to borrow the money for that position.
A leveraged trade is one in which you borrow money to increase your exposure to that particular asset.
Using 2:1 leverage to buy $2,000 worth of stocks with $1,000 of your own money means borrowing $1,000 from Plus500. The overnight fee is the interest paid for this loan.
Whenever a position is left open after a specific cut-off time (the “overnight funding time”), the overnight funding amount is either added to or deducted from your account.
The overnight funding time and daily overnight funding percentage can be found in the “Details” link next to the instrument’s name on the main screen of the trading platform.
For any geeks out there like me, here’s the formula for calculating the overnight funding fee:
- Trade Size x Position Opening Rate x Point Value x Daily Overnight Funding %
You can find out more about Plus500’s formulas for calculating overnight funding fees here.
Plus500’s Limits On Deposits And Withdrawals.
Your Plus500 account can be funded with your bank account, PayPal, or Skrill. Deposits are generally instant, but withdrawals can take 3-7 business days.
There are specific withdrawal thresholds, depending on your chosen method:
- For Paypal and Skrill, the minimum is USD 50 (or equivalent in chosen currency).
- Bank transfers and credit card withdrawals have a minimum of USD 100.
If you withdraw less than these amounts, you’ll incur a fee of USD$10.
- You can withdraw money up to five times in any calendar month for free, as long as each withdrawal exceeds the minimum threshold. Any further withdrawals are subject to a charge of USD $10.
Plus500 allows a minimum deposit of 100 units of your chosen currency. For example, if you’re trading cryptocurrency in Australia, the minimum deposit is AUD $100.
Is Plus500 Safe?
Yes, Plus500 is considered safe due to the following four factors.
1. ASIC License.
In Australia, Plus500 is an authorised financial services provider. They are licensed and regulated by the Australian Securities and Investments Commission (ASIC), under the name Plus500AU Pty Ltd (ACN 153301681).
The company holds an Australian Financial Services (AFS) license, which means it has been vetted by ASIC and the Australian Prudential Financial Authority (APRA).
2. Negative Balance Protection.
To safeguard customers from incurring losses and reaching a negative balance, there is a protection mechanism in place called the “Margin Call” feature.
You can’t lose more than the funds available in your account.
3. Greater Control.
To minimise your exposure to a particular asset, Plus500 offers you a range of financial controls, such as:
- Stop loss.
- Trailing stop.
- Guaranteed stop.
- A limit.
These enable traders to lock in profits and limit losses, but some are only available in certain financial markets and come with a spread increase.
That said, peace of mind is priceless, and I’d always recommend you harness the power of these controls.
Alternatives To Plus500.
There’s a lot of competition among trading platforms, and which one you choose will depend on your idiosyncratic needs.
|Low Brokerage Fees||Tiger Brokers charge no commission on currency exchange whatsoever.|
|Advanced, high-volume trading||IG is a monster share trading platform for advanced professionals.|
|Low Trading Fees||Check out Interactive Brokers.|
|Copy Trading||eToro is the best for copy trading. It has a huge community, so you can learn from the best and mimic their moves.|
How To Open A Plus500 Account?
I won’t teach you to suck eggs in this section. The fact that you made it to this part of the review tells me you don’t need hand-holding.
- Simply go to the Plus500 website, select “Start Trading,” and register for a new account.
- You’ll need to verify your account via a link sent to your email, then add a funding option.
- To link a bank account, you’ll need to upload images of government-issued ID (such as a driver’s license or passport).
You could have all this done in a matter of minutes. They make it really simple, and it’s tempting to get carried away.
I strongly recommend you toggle the “Demo Account” button and familiarise yourself with the workings of the platform before you dive in and start investing.
Frequently Asked Questions About Plus500.
Here’s what I wish I knew earlier in my investing journey.
Can I have more than one trading account?
It’s possible, but you’d have to jump through a few hoops to get one. Plus500 doesn’t encourage the use of multiple trading accounts, but they do assess each application on a case-by-case basis.
If an additional account is permitted, it must be operated independently. You won’t be able to transfer funds between your accounts.
Do I receive dividends when trading CFDs?
At Plus500, you trade CFDs on equities, and you don’t own shares or have the typical voting rights of shareholder — so dividends are not paid, per se.
Holding a buy position will reflect a positive adjustment; a sell position will have a negative adjustment.
What is a rollover date?
An automatic rollover is executed whenever a futures contract reaches its expiry date. This means that all open positions and orders are automatically rolled over to the next futures contract.
Since there is a change in the underlying instrument’s price for the new contract period, a compensating adjustment is made (as are stop orders and limit orders). For a detailed example, read this.
What is a market spread?
Spreads are essentially the difference between the buying (ask) and selling (bid) price of an asset. They vary depending on the liquidity of the asset.
A wide spread will result in higher transaction fees for investors.
What markets can I access with CFD trading?
If using Plus500, you’ll have access to the biggest global indices, such as the London Stock Exchange (LSE), the New York Stock Exchange (NYSE), and the Australian Securities Exchange (ASX)—to name a few.
Is Plus500 Any Good?
Remember at the beginning of this article when I likened choosing an investment platform to selecting a car?
A Toyota is neither better nor worse than a Tesla. Your choice will be determined by the road you take—that is, your trading strategy.
To specifically trade stocks, you might want to look at eToro. If crypto strikes your fancy, BTC Markets and ByBit are very popular in Australia.
With its robust tools, user-friendly interface, and lack of commission fees, I highly recommend it for all your CFD trading needs.