Overview of Plus500
The Plus500 exchange is less of an exchange in the sense that most cryptocurrency investors would think of it, and more of a place to trade contracts or agreements between parties. This type of platform is more akin to something like options trading, where you are trading the rights to an asset, and not actually trading the asset itself. Plus500 users trade what are known as “Contracts For Difference” (CFDs); so if you’re looking to own some cryptocurrency, then this is not for you, and you should check out an exchange such as Binance if you would prefer to actually own cryptocurrency.
However, if you are interested in trading CFDs, then Plus500 is one of the best places to do so. This particular exchange offers some interesting opportunities that you will likely not find anywhere else. While they started out with more traditional assets like forex and commodities, In 2013 they were the first company in the world to introduce the Bitcoin CFD to potential investors, and their offering has grown from there, featuring other prominent alt coins such as Ethereum and Litecoin.
Plus500 is an Israel based company, and they were founded in 2008 to bring the world of CFDs to investors. They currently offer several hundred different financial instruments to over a million clients throughout Europe and Asia. Please note that they do not serve clients in the United States, likely due to the hindering financial regulations inherent with this relationship. The Plus500 platform aggregates many different asset exchanges all over the world, and their relationship with their providers affords them the ability to offer traders these tools with no added commission rates. They are a fully licensed and regulated*.
Plus500 were the first to offer CFD trading for cryptocurrencies in 2013, and they continue to add new assets to their roster that they find promising. Keep in mind that these will most always be high market cap options, as the risk inherent with cryptocurrencies is too great for anything else. However, there are quite a few options here, and it’s likely you can find something you’re interested in trading. The top payment coins are here, but there are also some more unusual options which can be found below.
Banking at Plus500
Plus500 Step by Step
- Create an account
- Verify your email address
- Submit account verification
- Submit verification document (possibly optional)
- Deposit funds to your account
- Find the commodity that you want to trade
- Select an asset
- Purchase your asset
The first step is to create an account. You should be aware that there are two account types at Plus500. They have a demo account, and a “real money account”. The demo account will allow you to explore their features, learn how to place trades, and experience what this type of trading is like first hand. It’s highly recommended that you start out with this before moving on to trading real currency. All you need to create an account initially is an email address and a password.
The next step is to verify your email address. Plus500 will send you an email confirming that you have joined. Just click on this link to activate your account. You may have your privileges restricted until you complete this step, so go ahead and do it now.
Plus500 does not allow for any unverified trading accounts. You’ll need to submit all of the appropriate information before you will be allowed to trade with real money. The verification centre will prompt you to enter basic information such as your name, birthdate, address, ect. Make sure that everything you enter matches what is on your ID card exactly.
They will also serve you a short verification questionnaire. These will be general questions that could pertain to things such as addresses you’ve lived at previously, or perhaps accounts you’ve held with certain financial institutions. In most cases, traders will be able to be electronically verified by this questionnaire. However, if they can not verify you based on this information you may need to submit certain documents to gain approval manually.
This step may be optional. However, if your identity can’t be verified via the provided questionnaire, then you will need to upload some verification documents that will prove that you are who you say you are. You will need two documents: a government issued photo ID, and something that can verify your place of residence, such as a utility bill, property tax bill or credit card statement. Their FAQ lists the full list of documents which you can use for this verification procedure, but hopefully you will be able to bypass this step entirely.
After your verification information is approved, you’ll need to deposit funds to your account. You can do this by visiting your account menu, and then clicking on deposit. Plus500 offers traders the ability to deposit funds using a bank transfer, Paypal accounts, Skrill accounts, or by using their credit or debit cards. The process is very straightforward, simply follow the instructions, and your account will be quickly credited for the amount that you specify. If you have any problems, click on live chat to get assistance.
After funding your account, the next step is to click on the trade button to the left. This will bring up the exchange market for all of Plus500’s available commodities. If you’re interested in trading cryptocurrency CFDs, then you can click on cryptocurrencies. However, Plus500 offers a ton of other varied investment vehicles if you’re interested in gaining positions in markets outside of crypto. This can be a good way to widen your exposure to other equally important markets like foreign currency or consumer staples.
Next we’ll need to select an asset to trade. In our example we’ve chosen NEO. This screen will display all of the relevant information about your trade, including a chart of the current market activity for this asset and the required amount of margin you will require to purchase contracts. Remember that you are trading on margin here, and that means that you need to be extra careful about the trades you execute. It’s very easy to overextend yourself trading this way.
All you need to do to purchase an asset is to fill in the number of contracts that you would like on the right, and then select buy. As long as you have enough funds in your account for what you have input, your account will be debited for the purchase. Please remember that you are not actually purchasing cryptocurrency here and you will not be able to withdraw NEO to your wallet. Instead, you are simply betting against these contracts, and the performance of the coin. If you don’t yet understand this, then please learn about CFDs, and utilize the demo trading platform before jumping in with any of your own hard earned money. This is quite a different animal than a normal exchange’s buy and hold situation that you may be used to.
Cryptocurrency CFDs with Plus500
The terminology used on Plus500 can be a tad confusing for new investors. Since they are using the words “buy”, some may assume that they will actually be owning the cryptocurrency that they are bidding on, but that is not the case. This exchange deals purely in speculative CFDs, where investors are betting against the direction that an asset will take without actually purchasing it themselves.
A CFD is essentially a contract, and in this contract those two parties are agreeing to exchange the difference in value between the price of an asset upon the start, and the close of that contract. Some traders utilize these as tools to diversify their investment options or to hedge against a position that they may be unsure of. This is a popular option for people who would like to take advantage of price movements in a particular market, like cryptocurrency, without being fully exposed to their volatility.
The advantage of a contract based trading platform such as this is that you can enter a position with a good deal less than the entire amount of capital that would be required to purchase the asset outright. However, people who actually own these cryptocurrencies elsewhere might also participate in this market. Why would someone do this?
Well, if they were to open a contract that creates a bet that the price will go down, then they could create a sort of insurance policy for their much larger collection of owned assets if disaster strikes. They would hold their portfolio of cryptocurrency until it regains any capital lost, and then pocket the “insurance policy”, which may well have made up for the losses incurred. In other cases, traders may simply see the potential for short term gains based on news, but they are not interested in owning the underlying asset for the long haul.
While CFDs have many advantages, they also have many disadvantages as well. In order for contract based trading to be effective, your timing must be impeccable, and while not needing the full amount of funds to secure a trading position is appealing, frequent traders must also beware of fees. There are often high spread prices, which is the difference between the buy and the sell price that may eat up your profits if you aren’t careful. These fees are typically how an exchange or broker makes their money.
However, likely the worst part of a CFD is that you do not actually own anything. Cryptocurrency still has much room to grow, and it’s possible that a long haul investor could make a lot more money by buying and holding a coin or token instead of trying to short it, especially those who are very inexperienced with this contract trading.
Other Plus500 Features
- Offers over 2,000 different investment vehicles
- Offers multiple cryptocurrency options
- Economic calendar
- Risk management tools
- Trade alerts
- Mobile applications
- Allows credit card deposits
- 24/7 Support staff
- Negative balance protection
Traders can place bets for a large number of different assets and commodities including cryptocurrencies, forex, gold, silver, cattle, oil, natural gas, index funds, and even publicly traded stocks or funds. The large array of trading assets is likely their best feature, and if you are interested in learning about CFDs, then you should learn other markets as well.
While most finance platforms outside of the crypto space are only interested in Bitcoin, Plus500 offers some attractive alt coins as well. They presently offer popular coins such as Bitcoin Cash, Litecoin, Neo, EOS and Ethereum to name a few, and it’s likely they will add more in the future as the cryptocurrency market continues to grow, and demand for these assets rises.
The site tools section offers an economic calendar that traders can use to keep up with world events that might pertain to certain assets on the platform such as various world currencies or commodities. You can utilize this information to help you place your bets in the right place, at the right time.
The platform offers some professional level risk management tools that can help you close positions automatically. Since many of the platform’s instruments are 24 hour markets, it can be nerve wracking to think that you could be losing a fortune while you’re sleeping. Instead, utilize close at profit orders, trailing stops or guaranteed stops to keep you sane while you’re away from your computer.
The built in alert service allows you to be instantly notified based on criteria that you specify. This includes price changes, trading volume surges or percentage changes based on daily or hourly measurements. This can provide some excellent trading opportunities if you’re quick enough.
Plus500 offers their traders a full featured mobile application for both iOS and Android to allow for on the go trading and monitoring of your trades in real time.
Not many exchanges will allow credit card purchases, but this one will allow you to instantly fund your trading by way of your credit or debit card. It’s very easy to do, and the funds can be applied to your account instantly.
This exchange offers 2/7 support via email or live chat to assist you with any issues.
This means that if you make a mess of your trading you will not owe the broker any money. It’s not possible for you to have a negative balance like with other platforms or exchanges. This protection will make your trading experience far less exhausting.
Using a credit card to trade crypto CFDs
Plus500 allows traders to utilize credit cards in order to deposit money to their accounts. It can be a very convenient way to load up on funds. This is a very simple process, and it’s no more difficult than any other payment method.
Simply go to the deposit section of your account settings page, and then click on credit card in the payment options tab. Enter the amount that you want to pay, and enter your credit card information. Hit submit, and your transaction will be processed almost instantly. Keep in mind that they only accept Visa or Mastercard, and the availability of this payment method may depend upon your region. If you need help making a credit card purchase, you can contact support.
Plus500 offers 24/7 support either via email or their live chat function. If you need any assistance with your account, then the live chat is likely the way to go, as it will be quite fast.
This will be very refreshing to cryptocurrency traders, who are accustomed to waiting weeks for responses on some exchanges.
There have not been any known account exploits or vulnerabilities found in the exchange, but Plus500 has come under scrutiny from traders in the past over frozen accounts. While this was likely a regulatory problem, many people experienced prolonged delays before they could be let back into their account or to withdraw their money. As you can imagine, if they had open trades, this could be quite dangerous to them and their capital. Aside from this though, there have been very few issues reported about the company.
Frequently Asked Questions
Plus500 make their money by charging you a spread, which is the difference between the buy and sell price of an asset, but they also have some other fees which you should be aware of. You may need to visit the the specific page for the asset on the trading platform in order to see exactly how much these fees are, because they vary for every instrument.
- Overnight funding (Specific to each instrument, please see the asset’s details page)
- Inactivity fee ($10 fee if you have not traded within 3 months time)
- Guaranteed stop order (Subject to a wider spread price, see price in trading options)
No, in fact if you are from the United States you will not even be allowed to create a demo account. This is likely due to the regulation headaches that unfortunately plague US citizens, and as such, many exchanges simply exclude them from their platforms.
No, you can not withdraw cryptocurrency from Plus500, because you do not actually own any. This is a contract trading platform. You are not actually purchasing any assets, you are simply betting on which direction the market will go. If you would like to own cryptocurrency, then considering using an exchange like Binance or Coinbase.