Plus500, a trademark of Plus500 Ltd, states that its principal activity is "online trading in 'contracts for difference' (CFDs) delivered through a proprietary trading platform via the web and other electronic channels."
Founded in 2008, the Israel-based company operates via several subsidiaries throughout Europe and the Asia-Pacific region and is registered with the relevant regulatory authorities. Like many forex brokers, Plus500 does not accept U.S. traders.
According to the "Country by Country" report on its website, Plus500 Ltd (PLUS.L) is a publicly traded company that has been listed on the London Stock Exchange (LSE) since June 2018 and its market capitalization, as of September 18, 2020, is £1.60 billion ($2.07 billion). Plus500UK Ltd., a U.K.-based company with its offices located in the City of London, is authorized and regulated by the Financial Conduct Authority (FCA #509909).
The broker offers clients in more than 50 countries access to a comprehensive product line, including forex, stock indices, individual shares, commodities, ETFs, options, and cryptocurrencies. Plus500 is also the first broker to introduce a Bitcoin CFD in 2013 and advertises that all trading costs are contained within each instrument's spread. Moreover, the broker offers access to options trading on many markets. These are very similar to plain call and put options traded on exchanges, but they are not standardized, which means that the option premium can be customized for your risk tolerance and strategy objectives.
- Plus500 is for customers that seek access to a wide range of financial markets with low trading costs and a simple, functional platform on which to place their trades.
- Plus500 offers negative balance protection and guaranteed stop loss orders.
- Plus500 is regulated by the FCA in the U.K.
Who Plus500 Is For
Plus500 is for the individual or entity that seeks access to a wide range of financial markets with low trading costs and a simple, functional platform on which to place their trades. Plus500's product suite of 2,000+ trading instruments, offered on its proprietary WebTrader with competitive spreads and no commissions, should entice the experienced investor who prefers to transact manually and finds the lowered cost worth the lack of added functionality that some competitors offer.
Access to more than 2,000 trading instruments
Easy-to-use and functional platform
Regulated by FCA (U.K.)
Negative balance protection for client accounts
Guaranteed stop loss orders
Customer support lacking
Education and research resources are limited or non-existent
Does not accept U.S. clients
Trading platform cannot be paired with other trading tools or platforms
- Plus500 offers clients in more than 50 countries access to a comprehensive product line, including forex, stock indices, individual shares, commodities, ETFs, options, and cryptocurrencies.
- WebTrader has a simple and easy-to-use interface that lets you create watchlists, analyze charts, as well as place and monitor trades.
- Plus500 is regulated by the FCA which is one of the main regulatory agencies in the U.K. and is highly regarded globally for being strict in ensuring that market practices are fair for both individuals and businesses. Simply put, being regulated by a reputable government-backed agency goes a long way towards establishing the credibility of a firm.
- Plus500 offers negative balance protection, which is mandated under ESMA rules that went into effect in 2018, ensuring that clients cannot lose more than they have put into their account.
- Guaranteed stop loss orders, which protect the trader from market gap risk, are available on some instruments depending on market conditions but they are subject to a wider spread.
- Plus500's customer service options are limited to online chat and email support with the lack of a telephone number, even for sales inquiries, being the most glaring omission.
- Plus500 provides little to assist clients in learning about the markets in which they are investing and its research resources are well below industry standards.
- Plus500 does not accept U.S. clients due to regulatory constraints, which would be a red flag were it not for the fact that the company is regulated by the FCA which, along with U.S. regulatory agencies (NFA, CFTC), is widely considered to be the preeminent regulatory body.
- Advanced traders who rely on incorporating third-party analytical and automation tools in their trading process will be disappointed as none of these tools can be integrated directly with WebTrader. Moreover, back-testing functionality is not available either.
As is the norm in the brokerage industry, Plus500 generates its revenues principally from customer trades that "cross" the bid/ask spread, which are competitive within the industry. The company does not charge commissions on any client transactions as all trading costs are contained within the spread of the instrument. While the spread does not vary with trade size, Plus500 does offer high-volume traders a discount.
Additionally, the broker also generates revenues by charging premiums, effectively a financing charge, on positions held overnight by clients, which may be subject to currency conversion charges if they trade in a currency other than the account's base currency. Furthermore, there are fees for "guaranteed stop loss orders" (GSLO), and inactivity fees kick in after an account has been idle for three months.
Traders can qualify for a "professional" account, which offers higher leverage, but the costs are the same. Investors with a professional account may increase their maximum leverage ten-fold, from 1:30 to 1:300.
One of Plus500's selling points is that it does not subject client accounts to ancillary fees. There are no charges for normal withdrawals or terminating an account. The minimum to open an account is 100 units of the base currency. Funding options include Visa or MasterCard debit/credit cards, e-wallets (PayPal or Skrill), and bank funds transfers.
WebTrader, Plus500's proprietary platform, offers a streamlined trading experience that is stable and easy to access from multiple devices and systems (Windows PCs, web browsers, smartphones, and tablets).
WebTrader has a simple and easy-to-use interface that lets you create watchlists, analyze charts, as well as place and monitor trades. The technical analysis charts offer more than 100 technical indicators that you can apply to many different time frames, from tick charts to weekly charts. However, unlike many of its competitors, Plus500 does not offer the immensely popular MetaTrader 4 (MT4) platform, a platform alternative that would provide more functionality and customization options for clients.
The most appealing feature of WebTrader is that it's easy to use with layouts that will feel familiar to experienced traders. Clients can choose from more than 2,000 instruments, analyze their selection on a customizable technical analysis chart, and place their trade in just a few clicks, all within the same window. Unfortunately, WebTrader is a closed system. Advanced traders who rely on incorporating third-party analytical and automation tools in their trading process will be disappointed as none of these tools can be integrated directly with WebTrader.
Plus500 doesn't offer any of the special features that are typically available at other online forex brokers. It doesn't allow for automated trading via expert advisors or other trading algorithms, it doesn't provide back-testing functionality, nor does it allow clients to manage third-party funds via PAMM or MAM trading platforms. The company simply provides a streamlined WebTrader platform along with similar mobile trading apps for iPhone, iPad, and Android devices where clients can place and monitor trades.
Guaranteed stops are available with some markets; however, they come with an increased spread and cannot be added to previously opened trades.
WebTrader has three basic order types with the option of attaching "take profit" and/or "stop loss" orders to them. Additionally, the trader can choose both guaranteed and/or trailing stop options when filling out the order ticket prior to execution.
- Market - The simplest order where a trader signals that their trade request should be executed at the prevailing market rate.
- Limit - A pending order where the entry is at a predetermined point below or above the prevailing market rate depending on whether it's a buy or sell. The trader also has the option of selecting the expiration time of this order.
- Stop - A pending order where the entry is at a predetermined point above or below the prevailing market rate depending on whether it's a buy or sell. The trader also has the option of selecting the expiration time of this order.
The Plus500 mobile applications include all of the functionality available in the desktop application. Traders can access all of Plus500's product catalog, account details, conditional orders, and charting (complete with 100+ technical indicators) from the Android, iPhone, or iPad mobile apps.
The dynamic charts can be expanded to full-screen mode to provide more clarity during the analytical process. Clients can also deposit and withdraw money from within the mobile app. However, some traders will be concerned about the lack of enhanced security measures, especially since these applications provide a direct line of access to funded accounts. Clients are also unable to use the MT4 mobile application, which has greater functionality and may be a more familiar interface for experienced investors.
Range of Offerings
Plus500 provides access to 2000+ financial instruments across a wide range of different asset classes, including:
- Indices - Country and Sector
- Individual shares
The vanilla call and put options that Plus500 offers work like the exchange-traded versions except that they are non-standardized. This means that these options can be customized and adjusted to the client's risk tolerance and strategy goals.
Plus500's customer service options are limited to online chat and email support which are available 24/7. The most glaring omission is the lack of a telephone number, even for sales inquiries. Prospective and current clients must submit inquiries through live chat or an email ticketing system that is available 24/7. While the customer service options are limited, Investopedia received responses to each of the chats and emails submitted within a few minutes, which is a comparatively prompt response time. No in-person support is available.
The online chat is easy to use, but the initial responses to our requests felt like a chat-bot was being used. This isn't necessarily a problem because the software is good at detecting commonly asked questions and linking to a resource in the FAQ or providing a short answer. Getting through to a human agent is relatively quick when needed. Even with these limitations, customer service responses to our requests were prompt, knowledgeable, and courteous.
However, an email response to our request for average spread information on EUR/USD and USD/JPY was a bit strange in that they were not willing to disclose this. Plus500 states that its revenue is derived from the spread which would imply that this data would be collected and should be disclosed to prospective clients as other competitors do. The email response was a follows:
"Unfortunately, we are not able to provide the data you are requesting. In any case, these two FX pairs are offered with a dynamic spread, which follows the market spread and is added on top of it, as it is the main compensation for our services."
Many brokers provide courses, videos, e-books, quizzes, and more to help clients learn about the markets in which they are investing. Plus500 provides none of these services. The broker does provide one legally-required "Key Information Document" (KID) that outlines the basics of what each available instrument is and the risks associated with trading it. The KID has summary information on commodities, cryptocurrencies, ETFs, forex, indexes, options, and equities. Plus500 expects its clients to know what they're doing or, at the very least, to seek out educational material elsewhere.
Basic, real-time information about client activity, such as balances, transaction activity, and profit/loss breakdowns are available on WebTrader, but there is no built-in tool for analyzing trading activity. Plus500 does not provide a trading journal or tax accounting tools on the platform.
Plus500 has very little to offer when it comes to research, analysis, tools and commentary. The company provides little in-house research articles or videos and there are no news feeds. The broker does, however, provide economic and earnings calendars, which are useful.
Plus500 also provides customizable charts where traders can conduct technical analysis on any of the instruments under trading consideration. Additionally, it provides a "Traders' Sentiment" indicator that shows traders what percentage of Plus500 clients are buying and selling an instrument, and a "Live Statistics" indicator that shows the instrument's performance for 5-minute, 60-minute, and 1-day time frames.
The company acts as principal and hedges its exposure with its parent company to eliminate market risk and to ensure it is not exposed to material losses. While Plus500 does not provide additional deposit insurance, it is registered with the relevant regulatory authorities throughout Europe and the Asia-Pacific region:
- Plus500UK Ltd is authorized and regulated by the Financial Conduct Authority (FCA #509909). Office Address: Plus500UK Ltd, 78 Cornhill, London EC3V 3QQ
- Plus500CY Ltd is authorized and regulated by the Cyprus Securities and Exchange Commission (License No. 250/14)
- Plus500AU Pty Ltd holds AFSL #417727 issued by ASIC, FSP No. 486026 issued by the FMA in New Zealand and Authorised Financial Services Provider #47546 issued by the FSCA in South Africa
- Plus500SEY Ltd is authorized and regulated by the Seychelles Financial Services Authority (License No. SD039)
- Plus500SG Pte Ltd (UEN 201422211Z) holds a capital markets services license from the Monetary Authority of Singapore for dealing in capital markets products (License No. CMS100648-1)
In accordance with the U.K. FCA's client money rules, Plus500 is required to take steps to ensure client funds are not commingled with corporate funds, thereby safeguarding client money and assets in the event that the company becomes insolvent, by holding those funds in segregated accounts at regulated banks. If Plus500 defaults, any shortfall of funds up to £85,000 may be compensated for under the Financial Services Compensation Scheme (FSCS).
Plus500 also offers negative balance protection, which is mandated under ESMA rules that went into effect in 2018, ensuring that clients cannot lose more than they have put into their accounts. Guaranteed stop loss orders can be used on some instruments depending on market conditions but they are subject to a wider spread.
Plus500 offers security measures such as bio-metric authentication for its mobile application and there is a timer that will log the user out of both the web-based and mobile applications if they are not being used.
Plus500 clearly targets those who are looking for an interface for executing trades without the need for advanced functionality. The broker's spreads are competitive, which keeps costs low, and the proprietary WebTrader platform is intuitively functional. Clients of Plus500 U.K. have the additional security of regulation by the Financial Conduct Authority.
The lack of educational and research resources, not providing MT4 as an alternate platform, and no auto-trading make this broker unsuitable for beginners and technically oriented traders. However, experienced investors who prefer to enter and exit their trades manually may find the functionality trade-off worth the lower expenses.
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