Plus500 fees like any CFD provider can be categorised into three areas:
The analysis below examines these four areas and key strengths and weaknesses of forex trading with Plus500.
Spreads for Plus500 are not fixed. This mean the difference between the buy and sell price of any currency pairing will variate during the day based on market factors. To provide an idea of spreads we have looked at the major pairings on the 12/03/2018 for a snapshot in time.
The spread for the Australian to American dollar is $0.95 per unit also know as 0.03%. At the time of this Plus500 fees analysis the exact spread was 1.9pips.
The Euro to Australian Dollar has a spread per unit of $2.20 (the same percentage as the AUD/USD). The spread on the 13th of October was 4.4 pips for this currency pairing.
The British Pound to Australian dollar has a lower spread percentage of 0.02% compared to the two currency pairings above. The spread per unit is AU$0.64 and at the time of this review the actual live spread was 3.2pips.
The overall spreads are not the lowest in the industry with several ECN forex brokers offering lower rates as you can view on the forex trading comparison table. There are however reasons for this being the case and these are explained in the next section.
Plus500 has no commissions on any of their trades. If you’re new to the concept of commissions, the below explains this concept in greater detail:
Why Do Some Forex Brokers Charge Commissions?
The main way a forex broker makes money is similar to a currency exchange business at an airport with a different rate charged to buy back the currency or sell the currency to an individual. The difference between these rates is know as the spread. The issue though with a spread is that unless they are fixed (which Easy Forex Offers) they can widen and shorten every hour and day. This makes trading costs inconsistent which can difficult for frequent traders working on systems.
To minimise spreads and make trading costs more consistent when forex trading, commissions were introduced. By having a set percentage fee based on volume the spreads can be reduced and in some rare circumstances can even be 0 pips. It is debatable if commission brokers result in lower overall fees so traders choose a mix of options based on their trading styles.
There are a handful of additional fees Plus500 charge when trading forex, CFDs, cryptocurrencies or other instruments:
When traders hold positions over an hour (which is indicated within the forex platform ‘instrument detail section’) a premium fee is applied. This covers the funding costs associated with the leverage (300:1) Plus 500 offers. The time of market close is also shown within the forex platform within the details page to provide greater transparency.
A premium is three times higher if held over the weekend. This means a position is opened on a Friday (or earlier) and not closed until the following Monday or later. It’s critical therefore to ensure when forex trading position are closed or the fees are known when choosing to hold a position.
2) Plus500 Inactivity Fee
A $10USD fee is charged to traders who don’t trade for a predefined period as stated on the Plus500 user agreement. Such inactivity fees are common when currency trading due to the costs of the forex platform and other technologies used.
3) Plus500 Overnight Fee
Similar to the ‘Premium’ discussed above. Whenever a position is left open after a certain point in time, a fee or premium is added to or deducted from your account. To better understand what the cut-off times are and how much of a premium Plus500 charges for their overnight fee, click on the ‘Details’ hyperlink next to the instrument name found on the main screen of your Plus500 trading platform.
4) Plus500 Withdrawal Fees
Plus500 don’t charge their customers withdrawal fees. However, if the funds you withdraw from your trading account are not in your local currency you can expect to lose a bit on foreign exchange fees. If you’re withdrawing funds to PayPal expect to receive slightly less as PayPal foreign exchange rates are slightly worse than if transferring to your bank account.
5) Plus500 Bitcoin Fees
Like with trading other financial instruments, Plus500 is largely compensated for its brokerage services via the bid & ask spreads they offer. They don’t charge any special bitcoin or cryptocurrency fees. Some of the cryptocurrencies they offer for trading include Bitcoin, Ethereum, Litecoin, Bitcoin Cash, Ripple and IOTA.
Other Plus500 Instruments
Plus500 Ltd is listed on the AIM section of the London Stock Exchange with a market cap of approx $750 million USD. While this Plus500 fee review focuses on forex trading, there are also other trading options including:
20 different markets can be traded ranging from the UK, USA to Germany. Traders can utilise leverage through Contracts For Difference (CFDs) with no commission charged on any trades. Australian shares can be traded go short or go long. With leverage, small deposits can help achieve the impact or larger volumes amplifying gains or losses. For this reason, Plus500 allows share traders to pre-define profit/loss positions to close positions once reached.
Major indices such as the NASDAQ 100 FTSE 100, S&P 500 and DAX 30 can be traded. Leverage of up to 300:1 can be applied to these indices due to their historic low movement levels on a daily basis. Trading on these indices can be done real-time and opening an account and position can be done in minutes.
Gold, Silver and even oil can be traded from $100 AUD. Leverage on commodities is slightly lower than other markets at 300:1 (maximum).
Exchange-traded funds with advantage trading tools market trading EFTs through contracts for difference a popular option. 1:100 leverage is made available which means for example, $200 could mean an exposure of up to $20,000.
Plus500 provides traders the ability to call or put option CFDs on AEX 25, CAC 40 Dax 30, S&P500 or MIB 40. This provides the ability to hedge major indices and be impacted by rising, side-wards or falling market. Advanced charting options help inform traders of trends and the latest movements within the market.
The Introduction of Crypto Trading
Cryptocurrencies have taken the world by storm and in 2017 Plus500 started offering customers the ability to trade and speculate on the price fluctuations of the major cryptos including (but not limited to) Bitcoin, Litecoin and Ethereum. Given the prices fluctuate quite wildly, Plus500 limit the leverage they offer to 20:1. This means that if you deposit the minimum $200, you could essentially commence trading with up to $4,000 in capital. Bid/ask spreads are also pretty competitive to other players.
Please note, before you commence trading cryptos make sure you fully understand the risks associated with trading highly volatile, leveraged products.
Plus500 Fees Conclusion
Forex trading costs vary dramatically by the forex broker chosen. Plus500 fees stack up quite well and as explained earlier, their higher fees are offset by there ‘no commission policy’. There are other Plus500 fees such as holding positions and inactivity fees but these are aligned to industry standards. While fees are critical, it’s also important to make sure the leverage, forex platform and customer service suit your trading requirements. Read our full Plus500 review for more details on these areas.