There are several online CFD brokers, each with a different angle. Here, we will compare two quite different CFD brokers: AvaTrade and Plus500. Both are regulated by a European financial regulator and have been around for at least 10 years.
Traders looking to expand their universe of investable assets have turned to contracts for difference (CFDs), leveraged products that allow users to place bets on the movement of assets ranging from stocks and global stock indices to commodities and cryptocurrencies like Bitcoin or Ripple. (Note: most North American residents are restricted from trading on CFD platforms). There are several online CFD brokers, each with a different angle. Here, we will compare two quite different CFD brokers: AvaTrade and Plus500. Both are regulated by a European financial regulator and have been around for at least 10 years.
Investors with some experience in the market will likely find AvaTrade’s platforms, products, and pricing very familiar and competitive with its rivals. It is a traditional dealer with strong research and technology tools. Plus500 offers CFDs in more than 2,200 markets and has a streamlined interface for sophisticated day traders.
It's important to understand that CFD trading can be a risky investment. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
- Account Minimum: $100
- Fees: Advertised spreads as low as .9 pips
- Best For: New and undercapitalized traders
- Account Minimum: £0
- Fees: EUR/USD—0.6 pips average
- Best for: Cost-conscious traders
Users of these two platforms will find a well-designed, easy-to-use interface. Each offers a wide range of information presented in a clean and clear design. The same is true for their mobile platforms, which have an intuitive look and feel, along with full functionality. Each site is available in a variety of languages, including English, Chinese, Arabic, and most major European languages. Overall, the user experience for both AvaTrade and Plus500 are very similar and meets expectations, and the result is a tie.
- Breadth of trading products
- Variety of platform choices
- Negative balance protection
- Simple and easy to use
- Customizable technical analysis charts
- Mobile app has the same functionality as the desktop does
- Ability to set price-based alerts
Mobile and Emerging Tech
AvaTradeGO, released in November 2017, now offers an Android and iOS alternative to the plain vanilla Metatrader 4 Mobile. The rebranded and updated MT4-based app includes enhanced social trading capacity but a limited feature set that’s generated dozens of complaints on Google Play. The app is also geared toward newer and less skilled traders, providing “step-by-step guidance on opening trades” and a feedback system that experienced traders aren’t likely to use.
The Plus500 mobile applications include all of the functionality available in the desktop application as well, but some traders may be worried about a lack of security measures. Between the two on mobile and emerging tech, it's a tie as neither distinguishes itself.
- App geared toward newer and less skilled traders
- Metatrader and AvaOptions web versions provide integration with desktop platforms
- AvaTradeGO offers an Android and iOS alternative to MT4 Mobile
- Traders can access Plus500's 2,000+ trading instruments
- Charting enabled on Android, iPhone, or iPad mobile apps
News and Research
AvaTrade offers an economic calendar and limited research through sharptrader.com. A brief (2-4 minutes) daily Trader’s TV video (via YouTube) comprises the core of research materials, with the script then transcribed as a Daily Market Review.
AutoChartist intra-day updates list short-term technical signals while a fundamental analysis section included a few links to daily reports but just four other stale, dated articles. A more current feature article section lists six broad brush reports on topics that included tariffs, Brexit, and bitcoin.
At the time of our review, Plus500 does not seem to have any dedicated research or analysis tools (aside from technical analysis and charting tools).
- A brief daily Trader’s TV video on YouTube is core of research materials
- Limited research through sharptrader.com
- Analysis section included stale, dated articles
- Trader's sentiment-shows what other clients are trading
- Economic Calendar-calendar from Dow Jones
- Technical Analysis Chart-100+ technical indicators
Education and Security
AvaTrade's materials were segmented into five major sub-topics, allowing clients to find answers quickly and efficiently. A buggie search function detracted from the learning experience, with many articles and topics seemingly missing. To top it off, the main broker site includes an education sub-menu and a variety of useful materials not integrated into the dedicated site.
Plus500 surprisingly offers no dedicated education section or platform tutorial.
- A broad variety of general articles, but not integrated into the dedicated site
- No two-factor authentication
- Plus500 provides no educational material
AvaTrade’s fees for Forex and CFD investing weren’t out of line compared to the rest of the industry. For example, the dealing spread on the EUR/USD was 1.5 pips and investors pay a $.03 spread on oil CFDs during normal market conditions. AvaTrade only sticks with the dealing spread approach to pricing, which keeps the cost structure simple and easy to understand.
Plus500 also builds its fees to into its market spread. Depending on which products you are trading, Plus500 can be cheaper to use. Stock spreads range from 0.10 to 0.50%, the S&P 500 is just 50 pips, and Bitcoin is 0.85% per side. On average, an active trader should expect to pay about the same overall across products on either platform.
- Account Minimum: $100
- Fees: Advertised spreads as low as 0.9 pips
- Stock trade fees: $0.005 per share
- Account minimum: GBP 100
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In addition, every broker we surveyed was required to fill out a 320-point survey about all aspects of their platform that we used in our testing. Many of the online brokers we evaluated provided us with in-person demonstrations of their platforms at our offices.
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