IIAwards - Review of Plus 500
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14 October
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As part of the recently announced IIAwards, in which we celebrate innovations in the fintech and crypto industry, today we will analyze Plus 500 taking into account different aspects.

General information

Plus 500 is an innovative CFD trading platform that enables leveraged trade on stock, forex, indices, commodity, cryptocurrency, ETF and option CFDs. Founded in 2008, this 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 US traders.

Commissions & fees - (4/5)

The overwhelming majority of the revenue generated by the company comes from customer trades that "cross" the bid/ask spread, which can be evaluated as competitive in comparison with the industry average.

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. Traders may be also 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. What is more, the company does not subject client accounts to ancillary fees. There are no charges for normal withdrawals or terminating an account.

Markets & products - (1/5)

The major drawback of the company is the fact that with Plus 500 it is not possible to trade original products - only their CFDs. The CFDs are available on forex, stocks indices, stocks, ETFs, commodities and cryptocurrencies, yet in comparison with other CFD providers such as eToro, the offer of more than 2,000 instruments on Plus 500 ranks superior. Unfortunately, the broker does not allow changing the level of leverage for standard accounts, however, the feature is enabled for professional accounts. Cryptocurrency leverage is capped at 1:2 by the regulator, but assets like Bitcoin, Ripple and Litecoin are all available to trade with tight spreads.

Advanced trading platform - (2/5)

While Plus 500 has developed web and mobile trading platforms, there is no downloadable desktop version. This entails the minimal customization opportunities enabled by the platform, however, the readily available layout can be characterized as highly intuitive and user-friendly. The platform does not offer automated trading and third-party plugins, and critical trading functions for advanced traders are largely absent.

Plus500 prides itself on the notifications and a sentiment indicator offered within its platform. Traders may set price alerts, percentage-based changes to assets, and notifications related to the sentiment adjustments. Plus500's WebTrader platform provides proper charting, offering over 100 optional technical indicators alongside the ability to save chart templates. Also, there are 21 drawing tools in the charts to aid in technical analysis. In conclusion, because Plus500 offers a proprietary trading platform, MetaTrader is not offered.

Innovative account opening - (3/5)

The average time required to open an account is one day. The process can be easily characterized as seamless, fast and fully digital. Plus500 accepts customers from many countries all around the world. However, there are some notable exceptions: for example, residents of the US and Canada can't open an account, and other countries such as Cuba, Iran and Syria are also excluded.

The Plus500 minimum deposit is 100 USD for debit/credit cards and electronic wallets and 300 USD for bank transfers. Plus500 only offers one account type, which is often referred to as a Retail account. You can apply for a Professional account if you meet two of the following three criteria:

  • Sufficient trading activity in the last 12 months.
  • Financial instrument portfolio over €500,000.
  • Relevant experience in the financial services sector.

A Professional account lets you trade with higher leverage compared to a Retail account.

Customer service - (3/5)

It is possible to contact customer support either via live chat, WhatsApp or e-mail, all of which are available 24/7. Phone support is not available, yet inquiries sent via e-mail or live chat are usually responded within a couple of hours. The company's website is available in 32 languages and customer support is equally multi-lingual. There is also an extensive FAQ section that covers topics ranging from the technical aspects of the platform to an introduction to CFDs.

Education - (2/5)

The disclaimer upon the company in app stores and online reviews states that 76.4% of retail investor accounts lose money when trading CFDs with this provider. This points towards the fact that the company does not invest nearly as much as it should in educating its customers.

However, an unlimited demo account is available, granting new traders the best choice to explore the Plus500 Webtrader. All education-related materials can be reached on the Plus500 website under the "Trader's Guide" section. If you browse their FAQ, you will find a few more videos detailing, for example, the process of payment verification. 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, indices, options and equities. They also have a fairly comprehensive Risk Management section which explains to traders how to best mitigate their risks while trading. Some brokers have made the case that advanced traders don’t need education, as they already know how to trade, and there is some validity to this claim. However, since Plus500’s platform is relevant to traders at all levels, it would be nice if the company would expand their educational offerings.

Mobile trading / Apps - (2/5)

The Plus500 mobile app offers a seamless transition from the WebTrader browser platform, which is great to see. The look, feel, and functionality is all similar. That said, like WebTrader, the Plus500 mobile app lacks the advanced tools and all-around functionality to challenge industry leaders. For example, Plus500 charts from the web do not sync on mobile. While Plus500 has significantly improved its charting (109 indicators and over 20 drawing tools), the mobile app still has plenty of room for improvement in terms of the number of features it can add. News, research and advanced trading tools are all lacking.

UI / UX - (3/5)

The platform was designed with novice traders in mind, and is touted as one of the most user-friendly platforms in the industry. 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. 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.

Digital security - (4/5)

Plus500 provides a safer, two-step login and Google and Facebook authentication are also available. Plus500 offers security measures such as biometric 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.

The company is among the most highly-regulated brokers in the world, which is a huge advantage for traders wishing to trade with a reliable broker that is based locally. The primary regulator of Plus500 is the Financial Conduct Authority (FCA) in the UK, which is counted among the strictest and most reliable in the world.

Traders are protected under the Financial Services Compensation Scheme (FSCS), up to 85,000 GBP, as per regulatory requirements. This brokerage also operates a subsidiary regulated by the Cyprus Securities and Exchange Commission (CySEC). Traders are protected by the Investor Compensation Fund (CIF) with maximum coverage of 20,000 EUR.

Novelties

As of recently, the company has added WhatsApp to its list of communication channels. This partly solves the issue of lacking a phone number and provides a more personal feel to the customer support experience.

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