Plus500 [Review 2021]

0

Published: January 4th, 2021 by Andrew

A detailed guide regarding one of the best brokers in the world cannot leave out anything. Through this Plus500 review we would like to show you why the platform ranks among the best ever.

In particular, we will analyze what the platform offers, the types of accounts that can be opened and what are the requirements for each of them.

We will provide you with an overall identikit of the broker that will enable you to have a clear idea of both what it means to invest in CFD online trading on Plus500 and how to do it.

Plus500 is a CFD broker and allows you to trade exclusively with this instrument. CFD is an acronym that stands for “contract for difference”.

“76.4% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.”

Plus500: a regulated broker

Plus500 is a CySEC and FCA licensed and regulated CFD broker. The first, the Cypriot authority, has authorized Plus500CY LTD, based in Limassol, under license n.250 / 14. The second, however, a very strict British authority, has authorized Plus500UK LTD with registration number 509909.

In addition to these authorities, valid for what concerns the territory of the European Union, Plus500 is also registered with:

  • ASIC (Australian authority), with ASF license n.417727
  • FMA (New Zealand authority), with FSP license n.486026
  • FSCA (South African authority), with license n.47546
  • Monetary Authority of Singapore, with license number CMS100648-1
  • Seychelles Financial Services Authority (#SD039)

WebTrader: the Plus500 Platform

The platform that Plus500 uses for online trading is WebTrader: it is a platform that is available in both desktop and mobile versions.

Moreover, for those used to interfacing more with smartphones and tablets rather than with the PC, Plus500 is present both on the PlayStore and on the AppleStore. The mobile application is subject to constant updates to make the trading experience more efficient.

WebTrader is available for both the real account and the demo account. In this way, the user who will practice the simulation will find himself using the same platform for real investments, optimizing the training period.

Trade CFD with Plus500: the Accounts

Plus500’s offer is structured around three different types of accounts:

  • Demo account, a free and unlimited trading simulation (an excellent forex demo account mode)
  • Retail account, to make investments with real money, starting from a minimum deposit of 100 €
  • Professional account, for experienced traders, with specific access requirements

Let’s analyze each offer in detail:

Demo Account: is it really unlimited?

The demo account offered by Plus500 allows you to operate on WebTrader having a virtual capital of € 40,000. Obviously, since it is a virtual capital, it can in no way affect the user’s real finances.

Its purpose is to allow you to practice and allows you to do it without any limit. Even in the event that the virtual capital runs out, the platform will automatically regenerate it (if it falls below € 200, the platform automatically restores the initial € 40,000).

To access the demo account, just register with your Google account, Facebook account, or simply by entering your e-mail address and choosing a password. The demo account is unlimited, meaning it will not be closed due to inactivity or after a certain time limit.

Furthermore, it is a simulation that fully reflects the real prices of the reported assets. Contrary to other demo accounts, therefore, this is a plausible simulation.

Retail Account: the main features

The retail account is the default solution that Plus500 offers to users who decide to switch from simulation to real operation.

You can open a retail account by depositing via:

  • Credit card, VISA or MasterCard, which require a minimum deposit of € 100;
  • Bank transfer, with a minimum deposit of 500 €. Plus500 covers deposit fees that the bank may impose, which is why the minimum deposit is higher than other deposit methods;
  • eWallets, Sofortuberweisung, MyBank, PayPal, with a minimum deposit of 100 €. Among the eWallets Skrill is also available, but only starting from the second deposit;

There are no commissions on trading regardless of the Spread (which we will deal with in the next paragraphs) and to operate it is necessary to cover an operating margin.

The minimum deposit is 100 euros: such a low minimum deposit makes Plus500 perfect for those who want to trade online with small amounts.

Professional Account: the requirements

The professional account is a type of account dedicated exclusively to professional investors, i.e. to all those who meet at least two of the three requirements imposed by Plus500:

  • Have made at least 10 transactions per quarter in the last 4 quarters, both with Plus500 and with another broker. Obviously, if with another platform, you need to be able to prove it;
  • Portfolio of financial instruments exceeding € 500,000. This is not a figure that must be deposited but which, instead, corresponds to the overall value of the securities and financial instruments in one’s financial portfolio;
  • One year of relevant experience in the financial services industry. That is one year of professional employment in the sector that can be demonstrated;

Professional trading has such strict entry requirements precisely that users who agree to be recognized as professional traders go to forego their ICF (Investor Compensation Fund) rights.

Professional traders can access higher level trading conditions such as higher leverage, but forgo compensation in the event of broker default.

Retail Account: condition of transactions

As we have mentioned, Plus500 is an ESMA broker, which is a platform that applies the restrictions on beginners imposed by the European Security and Markets Authority.

This means that, by opening a retail account, you can operate with:

  • Financial leverage within certain limits:
    – Up to 30: 1 for major currency pairs;
    – Maximum 20: 1 for minor currency pairs, gold and major indexes;
    – Maximum 10: 1 for commodities other than gold and less relevant financial indexes;
    – Up to 5: 1 for single shares and benchmarks;
    – Maximum 2: 1 for cryptocurrencies;
  • Operational margin closure, i.e. Plus500 will automatically close an open position if the total margin in the account falls below 50% of the initial margin.

With margin, specifically, we mean an amount of money that is frozen while the position is open, as a guarantee of payment in the event of a negative investment outcome.

Trading without a margin would force the trader to have to face negative accounts and debts to be paid;

  • Negative balance protection, or Plus500, again thanks to the margin tool, will prevent the trader from operating if this would mean risking having a negative account. In this way, the investor is protected from the risk of ending up in debt with the broker by operating recklessly;

In addition to the trading conditions derived from ESMA regulations, those who operate with Plus500 trade at zero commissions, with spreads on a single transaction. Spread, basically, is the broker’s form of earning.

Plus500 Spread: a transparent platform

Trading without commission does not at all mean that the platform does not reserve profits for itself.

Trading without commission means that the user is not charged excessive costs for each operation. Costs that, especially if we consider the modest figures of minimum deposits and operating margins, would be disproportionate to say the least, making the entire investment sector absolutely not very convenient.

Unlike commissions, the Spread involves a deduction calculated in pips, or on the basis of the fourth or fifth decimal place of each security (depending on both the type of operation and the security). The Spread is calculated based on the difference between the purchase and sale price of the CFD asset considered at the time of the transaction.

If, for example, the EUR / USD pair has a purchase price of 1.11412 and a sale price of 1.11406, then the dynamic spread on the operation will correspond to 6 pips, or 0.00006 units.

On Plus500, the Spread can be viewed by clicking on the “info” button in the description of the asset.

Another particular usefulness of the info button lies in presenting the investor with all the significant information concerning the stock, such as traders’ opinions, live statistics and upcoming events.

Furthermore, again in the in-depth analysis proposed in the info, fundamental data such as the initial margin, the maintenance margin and the data relating to the overnight are shown, which we will discuss shortly.

Initial and Maintenance margin on Plus500

These are fundamental data when you decide to switch from simulated to real operations.

The initial and maintenance margin constitute the required margin, or the amount of capital required by Plus500 to operate on the security.

Following the example mentioned above, of the EUR / USD pair, Plus500 allows you to operate with 30: 1 leverage and a unit quantity of € 1,000. This means that to open the position it is necessary to invest a nominal capital of € 1,000. With 30: 1 leverage this translates into 33.3 € of minimum investment (1000/30).

The margin required by Plus500, therefore, to open the position is equivalent to the capital to invest in the operation. In this case € 33.3. Plus500, in this way, ensures that you have the money you are investing available and that you are not getting into debt with the platform.

Furthermore, opening the info menu, we can see that the initial margin is 3.33%, while the maintenance margin is 1.67%. The initial margin is the part of the margin on which changes in prices have an effect.

An initial margin of 3.33% means that on a unit quantity of € 1,000, the trader will have to have 3.33% of the value in his account in order to trade. 3.33% of € 1,000 is € 33.3.

The maintenance margin, on the other hand, indicates the amount of capital required on the account to keep the transaction open. In this case, the maintenance margin is about half of the initial margin, so to keep the investment on EUR / USD open, the user must have at least € 16.70 capital on the account.

Of course, the used margin amounts are subject to a change depending on financial conditions.

If the capital held on the account is lower, Plus500 triggers the Margin Call, that is a notice to the customer that, in the event that he is unable to cover the maintenance margin through another deposit and, in the event that the security should fall further , the platform will immediately close the position.

Overnight on Plus500

Overnight is another valuable information that Plus500 communicates to users in the info menu about a CFD security. The overnight is practically a loan applied by the broker at the end of a certain time, which is indicated.

For example, on the EUR / USD pair, the overnight funding time could be 21:00 according to your time zone. At the end of that hour, in the event that the position is still open, a loan will be applied based on the type of position.

For example, for a buy position, a negative overnight funding of -0.0110% could be expected, while for a sell position a positive overnight financing of 0.0011%.

These are minimum loans whose purpose is to take into account the fluctuations of the stock during the night and that the broker pays or requests from the trader at the end of the set time. It is not always positive as it is not always negative.

Obviously it is an important factor in planning your own investment strategy, especially at certain times of the week, such as at the weekend. In fact, during the weekend, the stock exchanges are closed and, consequently, 3 overnight loans are available from Friday to Monday.

Plus500: users considerations

Plus500 is a platform that over time has been able to conquer a solid market position: with over 304 thousand active users and trading volumes of over 1,849 billion euros, for a total of more than 39 million open positions.

These are data that testify to its importance in the sector. Importance in the sector also evidenced by the sponsorship agreement with Atletico Madrid: the Plus500 logo has been visible since 2015 on the front of the shirts of the Wanda Metropolitano athletes and is one of the best proof of reliability that a broker can ever provide to its users.

In fact, no serious club, recognized as one of the most important in the European and therefore world football scene, would ever sign a sponsorship contract with a company that does not reflect its good faith and corporate commitment.

To complete the good reputation enjoyed by Plus500 there are the many opinions and reviews of users that circulate in the information channels of the sector: from forums to popular sites regarding online trading, mainly positive opinions circulate on the broker.

As for the few negative opinions, however, the main impression one gets when reading them is that they were written by resentful users, after losing their capital through ignorance of the dynamics of the sector.

Conclusions

In conclusion, we have had the opportunity to see in this guide how Plus500 is not just a reliable broker, regulated by the main authorities in the sector.

In fact, the platform also puts transparency in the first place regarding all the details concerning operations, such as required margins, leverage, overnight loans and information about the types of accounts that can be subscribed.

Added to this is a truly efficient customer support service, capable of resolving any doubts that may arise within a few minutes.

In short, a platform that fully deserves its candidacy among the best currently available on the market.

You can sign up on Plus500 by clicking here.

76.4% of retail investor accounts that lose money when trading CFDs with this provider. Consider whether you can afford to take this high risk of losing your money.

Is Plus500 a reliable broker?

Yes, it is one of the best known trading platforms. It has licenses and authorizations to operate in total safety.

What licenses does Plus500 have?

First of all, it is certified by Consob with registration number 4161. Furthermore, it also has the CySec and Asic license, among others.

Is Plus500 a listed company?

es, it is a company listed on the London Stock Exchange with the PLUS ticket.

Click to rate this post!
[Total: 0 Average: 0]

Leave A Reply

Your email address will not be published.