82% 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.
Plus500 Review: Market Maker ready for Trade
Plus500 is a Israeli broker that offers a trading catalogue of more than 1,000 underlying assets. Trading is based on a market-making model without any commissions. This broker rules out margin-call obligations beyond the account balance. Automated trading and elaborate chart analyses are not offered. Consult our Plus500 experience report to learn whether this broker is for you.
Plus500 Evaluation – Pros & Cons
- Commission-free trading
- No margin-call obligations beyond one’s account balance
- More than 1,000 tradable underlying assets
- Market making
- Rather broad spreads in part
- Trading platform with few functions
Broker Review: Our Plus500 Experiences
1. Trade Conditions: Market Making with Average Spreads
The effective trade conditions are an essential aspect of a qualitative Plus500 evaluation. Compared to other trading houses specialized in CFDs, this broker achieved average results in our test. At Plus500, trading is based on a market-making model. As is the case with most market makers, trading of most underlying assets is commission-free. The broker thus primarily generates its margin contribution via the spreads. According to a sample, these spreads are average for the most important underlying assets of each asset class.
2. Trading Platform Offering: more than 1,000 underlying assets
The tradable underlying assets are a quality criterion for the evaluation of brokers that is frequently overlooked. First of all, a broad catalogue speaks for a strong market position of the broker, since a sufficiently liquid market position would otherwise be impossible or too costly for less frequently traded stocks. Secondly, the success of many trading strategies stands and falls with the number of qualified trading signals – which is naturally related to the range of markets scanned.
The breadth and depth of the underlying assets is a positive aspect of the Plus500 valuation: A total of several thousand underlying assets are tradable, including equities, commodities, indices, currencies, options, and ETFs. Some of the commodities and indices are based on term contracts, which are connected to roll transactions at the end of the contract term or shortly before. Rolling costs may pose a problem – particularly in connection with very large financial levers.
The details of each individual CFD can be accessed via the product list as well as via the trading platform.
3. Order Features of the Trading Platform: Other Market Makers Can Do More
There are three basic order types: Market, limit, and stop. Brokers can offer their customers a much larger number of order types. In stock exchange trading, this is done by linking the three basic order types. The orders are transmitted to the broker by the customer and remain on the broker’s servers until a certain event occurs, after which the order is either deleted or forwarded to the stock exchange.
In the case of market makers, forwarding to the stock exchange does not take place, as the rates are determined in-house anyway. Therefore, brokers are able to provide their customers with a large number of order types and can enter into additional agreements with their customers. Plus500 offers market, stop-limit, stop-loss, entry-limit, as well as trailing-stop orders. In addition, guaranteed stop-loss orders are possible. Therein, the broker guarantees the realization of the agreed SL rates without gaps and slippage. You can tell whether a underlying asset offers guaranteed stops by looking for the respective checkbox in the trading area.
Rating: CVisit the broker Plus500 - 82% of retail investor accounts lose money when trading CFDs with this provider.
4. Analysis Features of the Trading Platform: Candlestick Charts and Indicators
Just to let you know right away: The analysis functions of the trading platform are a weak point in the Plus500 review. This applies to the download version of the platform as well as to the “WebTrader” and the mobile version. Most traders expect CFD brokers to offer a complete solution for trading, research, and analysis. This requirement is not met by this broker: The platform merely offers candlesticks charts and common technical indicators. A full-screen mode, drawing tools, additional indicators, and an interface for importing trade signals would be desirable.
If you require these tools, you will need to access to third-party offers to carry out charting and analysis there. This makes it all the more remarkable that this broker offers almost no features for fundamental analysis. Databases or fact sheets with key figures, important dates, etc. would be desirable, for example.
5. Regulation, Deposit Guarantee, and Limitation of Risk: Loose Regulatory Environment
The broker maintains various subsidiaries. The parent company Plus500 is based in Israel, while the subsidiaries are located in Cyprus, the UK or other countries. Accordingly, each subsidiary is regulated by the relevant authority: Plus500CY Ltd falls under the jurisdiction of CySEC and is authorized and regulated by it (#250/14); Plus500 UK Ltd, in turn, is authorized and regulated by the UK FCA (#509909). Plus500SG Pte Ltd is licensed by the MAS (#CMS100648-1) and IE Singapore (#PLUS/CBL/2018).
Plus500AU Pty Ltd (ACN 153301681) is licensed by: ASIC in Australia, AFSL #417727, and from the FMA in New Zealand, FSP #486026. There is also an authorized financial services provider in South Africa ( FSP #47546).
The broker takes the “”Investor Compensation Fund” aspect seriously. Plus500 states that it keeps client funds in segregated client accounts with banks as required by law. All client funds are held in a segregated client bank account in accordance with the Cyprus Securities and Exchange Commission's (CySEC) client funds rules.
6. Automated Trading: Algo Trading is not an Option
Automated trading has been gaining in importance for years, and the better the brokers and software developers are able to reduce their programming skills, the more people will want to take advantage of automated trading. Thus far, Plus500 does not rely on Algo trading and everything related to this approach.
There is no development environment via which mechanical trading systems can be programmed or subjected to a retroactive test. Personal/ individual trading signals are also not made available. There is no API for importing signals from external sources. Only alerts can be set up – the users of the platform are automatically informed when a certain market price has been reached.
The complete renunciation of automated trading is only a con for those who wish to use algorithms as their approach to trading in the long run at least. The same applies to social trading, which also does not play a role in this case. A changed attitude of the company in regards to these important subject areas would certainly be desirable.
7. Account Opening and Minimum Deposit
The biggest plus in the evaluation of this broker is that new customers can give Plus500 a try without having to deposit real money or having to limit themselves to a mere demo account.
Secondly, anyone can check to see whether the attractive advertising promise made by this broker is actually true: Plus500 claims to be offering a demo account that includes the market rates of the broker’s live trading servers.
The opening of an account is extremely easy. The parallel opening of a demo and real money account is not necessary: Switching between the two accounts is possible via the respective window.
Rating: AVisit the broker Plus500 - 82% of retail investor accounts lose money when trading CFDs with this provider.
8. The Broker and Its Competition: Significant Customer Growth
Plus500 Limited is listed on the London Stock Exchange. The company is one of the largest in the industry and is a well-known sponsor: In fact, Plus500 is the main sponsor of the Chicago Bulls.
In 2015, the software company Playtech almost took over Plus500. However, the transaction fell through due to delays in the assessment of the acquisition by the FCA.
9. Additional Services and New-Customer Offers
Since it is primarily beginners that are giving market makers like Plus500 a try, a substantial training offering would certainly be desirable. Unfortunately, the broker largely refrains from such training programs. Customers with little or no trade experience are therefore dependent on offers by third-party suppliers, which are available in sufficient numbers, however.
10. Customer Service and Website: No Hotline, No Training Programs
There is no telephone customer support – customers can only contact the broker via an e-mail form. The “FAQ” section of the trading platform refers to a subpage with explanations regarding the terms and procedures.
Apart from the renouncement of substantial training programs, the broker’s website has done well in the test. In particular, the most important aspects of the general terms and conditions, such as the exclusion of a margin-call obligation, can quickly be found. The catalogue of underlying assets has been structured clearly: Without having to log in, the details for each individual contract can be called up via the trading platform.
The broker assumes that its target group would like to start trading as quickly and userfriendly as possible. As has already been criticized in this Plus500 experience report several times, further trading platform and training opportunities are thus lying idle, which seems to be wanted nonetheless.
Conclusion to the Plus500 Test
Plus500 platform is suitable for experienced traders only. Though Plus500 is a very user-friendly platform, CFDs are “complex financial products”, thus the platform is not suitable for beginners and un-experienced traders. Anyone that is well-positioned within this target group should give Plus500 a try – yet, advanced traders and real trading experts will shy away from this broker given the market-making model, the Cypriot regulatory environment, and the somewhat above-average spreads.
Our Plus500 Rating as a Test Score: C+Visit the broker Plus500 - 82% of retail investor accounts lose money when trading CFDs with this provider.