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Looking to Start Trading? Here’s Everything You Need to Know About Plus500 (2019)

by CFD Guru Team   ·   
5/5

Plus500 is the leading CFD broker in the UK, measured by its total number of relationships with other CFD Brokers, according to the Investment Trends 2018 UK Leverage Trading Report.

This recognition makes them the go-to place for traders who want to put a foot into the CFD market.

In this article, we will explore in detail several aspects of Plus 500.

So, if you are looking to start trading, here’s everything you need to know about them.

trade with plus500 on your mobile, tablet and computer

Signing Up

The sign-up process starts by picking the type of account you would like to open.

You can either choose to start trading with real money right away or you can start with a demo account to familiarize yourself with the platform before you commit any funds to it.

In addition to the personal documents that you will need to provide to start trade, there are also several documents to read and a questionnaire that you will need to fill.

After the system picks up your information you will be immediately prompted to the trading platform and after you fund your account you will be able to start trading right away.

On the other hand, one important information for those who are just getting started.

In order to be able to withdraw money from your account you will need to provide the following documentation:

  • A photo of your ID Card, Passport or Driver’s License.
  • A utility bill or a bank statement that validates the address you registered.
  • Your UK National Insurance number.

Pros

#1 Broker In The U.K & Many Other Tier 1 Countries Around The World

24/7 Online Support Including Via WhatsApp & In Different Languages

Top Trading Platform & Good Spreads

Regulated By The FCA & Other Regulators Around The World

Easy To Deposit & Withdraw Funds

Cons

Not The Most Complete Solution For Institutional (Very Large) Traders

plus500 #1 cfd provider in many countries

Types of Accounts

You have a choice between two accounts, regular and professional.

The main difference between each is the maximum permitted leverage.

For Plus500UK accounts it is 1:30, which means you can get £30 of margin for each £1 you deposit.

The European Securities and Markets Authority (ESMA) renewed the restrictions imposed on the marketing, distribution and sales of CFDs, limiting the leverage offered to retail clients to 1:30.

Additionally, Plus500 offers Professional Accounts to traders that meet certain criteria.

These are the main requirements to be eligible:

  • Sufficient trading activity in the last 12 months, including at least 10 transactions of significant size.
  • A portfolio of at least €500,000 (including cash and securities).
  • Relevant background and experience in the financial industry.

These accounts can opt for a higher leverage level of up to 1:300.

Which countries can you trade from?

The company doesn’t explicitly disclose which countries are restricted to sign up.

Yet, when it comes to CFD, the United States have prohibited the trading of these financial instruments.

Nevertheless, they are still permitted in countries such as Australia, Switzerland, the UK, New Zealand, South Africa, Saudi Arabia, and in many other developed economies.

Plus500 number 1 trading broker in many countries around the world

What can you trade through Plus500?

Truth be told, the platform allows you to trade virtually any financial instrument available in the UK market.

This includes Indices, Currency, Commodities, Shares, Options, and ETFs.

The only instrument that is worth highlighting as one that cannot be traded through the platforms is bonds.

On the other hand, the platform is widely recognized for enabling investors to trade on CFDs and Cryptocurrencies, which are two of the most actively traded markets these days.

Note: On the Plus500 platform all of the instruments can be traded only through CFDs. 

Deposits & Withdrawals

The first step to fund your Plus500 account would be to identify yourself.

This process takes only a few minutes and it involves that you provide Plus500 with some personal information including your address, your country of residence and information about your intended trading activity.

After you have completed this step, you will be able to deposit funds into your account and you will also be eligible to trade on margin.

  • The maximum deposit you can send via Credit or Debit card, PayPal or Skrill is £39,000 and the minimum is £100.
  • The maximum deposit you can send via Bank Transfer is £59,000 and the minimum is £500.

In some instances, the account may be restricted from further deposits.

Yet, this is not a common condition and it often obeys to the necessity of closing some of your open positions.

There are no explicit limits on the number or amount of deposits you can make on Plus500.

As for withdrawals, here’s some important information you should know about how the platform works:

  1. The maximum number of free monthly withdrawals on a User’s account is five (5).
  2. If you exceed that number, you will be charged with $10 per each additional withdrawal.
  3. There are minimum withdrawal amounts required depending on the destination of the funds:
    • The minimum withdrawal for PayPal and Skrill is $50.
    • The minimum withdrawal for bank transfers and credit cards is $100.
    • Any withdrawal of less value than that will be subject to a $10 fee.
  4. A withdrawal request will be processed in a period of 1 to 3 days and it will be accredited on the user’s account in a period of 3 to 7 business days, depending on the payment method.

What is a ‘pip’?

The word ‘pip’ stands for Price Interest Point and it refers to the smallest unit of change attributed to a certain financial instrument. A pip is 1/10,000 points and it is a measure often employed to trade currencies, options, and other derivatives.

The following comparison can help you understand more clearly what a ‘pip’ is, in relation to other figures employed to describe relative changes in the price of financial instruments:

1 pip = 1/10,000

1 basis point = 1/100

1 percent = 1 for each 100

Here’s an example.

Let’s say the price of the USD/JPY moves from 1.33201 to 1.33241.

The net change of this is 40 pips while the percentage change of this movement is 0.03%.

Types of Orders.

There are 4 basic types of Orders featured by the Plus500 trading platform, these are:

  • Close at Loss Order (Stop Loss Order):

    This order allows the investor to set a price at which the position will be automatically closed.

  • If the price is either reached or surpassed, the system will close the position immediately, avoiding further losses for the trader. Nevertheless, the position will not be necessarily closed at the exact price set by the trader, as some ‘slippage’ can occur, which is a volatile price movement that surpasses the price target without allowing the system to react timely. This type of order has no additional cost for the trader.
  • Close at Profit Order (Stop Limit Order):

    Similar to the Close at Loss Order, the Close at Profit Order allows the trader to set a maximum price at which the position will be closed. This is often a target price at which the trader decides to exit the position, taking a profit in the process. While the system may not be able to close it at the exact price, the inaccuracy often benefits the trader as the ‘slippage’ tends to fall on the positive side, meaning a higher price than the one initially set. This feature is also free for Plus500 traders.

  • Trailing Stop Order:

    This type of order allows the trader to instruct the system that he wants to keep the position open as long as the price rises, but if the price declines by a certain number of ‘pips’ then the position will be immediately closed. This is a useful feature as it maintains the open position as long as it makes sense, yet it protects those profits by setting a maximum permitted loss. The feature is free of charge, yet there’s no guarantee that the system will trigger the close within the exact parameters set by the trader.

  • Guaranteed Stop Order: This order forces the system to close the position at the exact price set by the trader. This is particularly useful for arbitrage operations that involve a high degree of carefulness to make sure the profitability of the operation is reached. These orders have a cost that is charged via higher spreads and there are some conditions that need to be met in order to set them up:

    • They can only be placed on new positions, not existing ones.
    • They can only be activated or edited during trading hours.
    • The orders cannot be revoked once they are placed, even though the parameters can be changed.
    • The additional spread charged to set the order is non-refundable.
    • There are a minimum and maximum distance required between the Guaranteed Stop Order price point and the current price of the instrument.

Leverage.

Each account offers a maximum permitted leverage of 1:30 and 1:300 respectively.

This maximum margin permitted for a particular operation will vary depending on the trade, the financial instrument involved and the size of the transaction.

You must be aware that Plus500 demands a minimum maintenance margin of 50% of the current value of your open positions.

Let’s say your open positions are currently worth $10,000 and you have a $4,000 margin on those positions.

If your positions were to decline by 21% their value will fall to $7,900 and your equity will be $3,900 which is 49.4% of the total value of your open positions.

In this scenario, you will probably get a margin call, which will prompt you to put more money into your account to increase the ratio or you will be forced to liquidate some of your positions.

In the worst case, the company has the right to liquidate your positions for you to keep your account within the boundaries of their required maintenance margin.

Commissions & Fees.

Plus500 doesn’t charge commissions on trades directly, as they are compensated based on the bid/ask spread of the financial instruments offered through the platform.

There’s a Daily Overnight Funding percentage charged on any open position funded through margin. The formula to estimate this charge is:

Daily Overnight Funding Charge = Trade Size * Opening Rate * Daily Overnight Funding %

Plus500 charges a fee of up to USD$ 10 per month to any accounts that remain inactive for a period longer than 3 months.

This means that from the fourth month and forward, provided that no login is made to the account, the company will charge this fee.

Regulators.

Plus500 offers a Client Money Protection program that assures investors that their money is held in segregated client bank accounts in accordance with the Financial Conduct Authority rules.

Also, the company and its subsidiaries are currently regulated by:

  • Plus500UK Ltd is authorized and regulated by the Financial Conduct Authority (FRN 509909). Office Address: Plus500UK Ltd, 78 Cornhill | London EC3V 3QQ
  • Plus500AU Pty Ltd holds AFSL #417727 issued by ASIC, FSP No. 486026 issued by the FMA in New Zealand and Authorized Financial Services Provider #47546 issued by the FSCA in South Africa.
  • Plus500CY Ltd is authorized and regulated by the Cyprus Securities and Exchange Commission (License No. 250/14).
  • 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).

where plus500 is regulated

Additionally, the company is a member of the Financial Services Compensation Scheme, and traders whereby cover is £85,000 per person per firm.

The trading experience.

The Plus500 trading platform is filled with information about the different financial instruments they offer.

Whether you choose an index, a cryptocurrency or an option, a side window will be displayed with all the information you need to make an informed trade.

This includes overnight funding rates, initial margin required, maintenance margin, the expiration date of the instrument and the trader’s sentiment towards the asset.

Additionally, the platform features a highly useful alert and notification system that allows you to set system alerts send via SMS, E-mail or Push Notifications to your registered devices, whenever the price of the instrument or its performance changes or reaches a certain threshold.

Furthermore, users can access their trading platforms through mobile apps designed for both iOS and Android.

The iOS version has obtained a rating of 4.3 stars and the Android version has been granted 4 stars.

This shows that the platform while it may have some minor flaws, it works alright for most users.

Additional information.

Additional information can be found on Plus500 Frequently Asked Questions section or you can also refer to the full library of Terms, Conditions and Agreements available on the company’s website.

Open your account with Plus500.

Plus500 is one of our favorite CFD brokers, open a demo or live trading account and start to invest in your favorite financial assets today!