Plus500 Experience – The online broker is specialized in CDF Trading. Is the provider’s business model reputable?

Global CFD broker Plus500 describes itself as: “the trading module for the entire world – reliable, simple, innovative”. But is there a serious business behind these words?

Plus500 is a trading platform for CFDs on stocks, indices, forex and crypto currencies. The company was founded in Israel in 2008. Today, the trading provider and its subsidiaries are registered in three marketplaces: Great Britain, Cyprus and Australia.

The Plus500 Trading Platform is a service of Plus500UK Ltd. According to its own statements, the trading platform is growing strongly in the CFD area. It currently offers over 2000 financial instruments. According to their website, Plus500’s headquarters are located in Haifa.

Plus500 is also represented on the stock exchange. The shares can be traded on the AIM market of the London Stock Exchange. Plus500 promises its clients attractive conditions, a modern trading platform and a wide range of tradable underlyings.

Plus500 is authorised and supervised by the British Financial Services Authority (FCA) with respect to its Contracts For Difference (CFD) offering. However, not all that glitters is gold: in recent months, negative reports and problems with the UK’s Financial Services Authority have also been reported.

Plus500 experiences – Investigation by the FCA

In May 2015, Plus500 suffered massive losses after the FCA discovered inconsistencies in its money laundering prevention measures. As a result, the provider had to freeze approximately 40,000 customer accounts, and the company’s shares lost almost 60 percent of their value.

For many investors, however, the company is still reputable, and in many places the regulation by the supervisory authorities is emphasized and the risks of the financial products offered are pointed out. One reason for dubious business practices and bad experiences with Plus500 could also be the high-risk contract for difference or CFDs.

Plus500 – Lawyers help

Our extensive experience with numerous CFD Trading providers, such as Plus500, shows that with many providers, partial or full refund of the deposited amounts is very well achievable.

The lawyers of the law firm Herfurtner offer you legal advice in case of possible losses in connection with the provider Plus500.

Please contact us if you would like our lawyers to assist you in claiming back your deposited funds from the respective broker.

What are CFDs?

Contracts for Difference (CFDs) are derivative financial instruments that serve to hedge against price fluctuations. For this reason, they can also be used in CFD trading as if they were a bet. Therefore, CFD trading at Plus500 involves the risk of a total loss of the invested amount.

There may even be an obligation to make additional contributions. CFDs, with the exception of CFDs on futures and defined maturity dates, do not have limited maturities. They are therefore not subject to any loss of fair value.

CFDs at Plus500 are traded primarily over-the-counter. In CFD trading, the parties agree to exchange the performance and income of an underlying asset for interest payments during the specified term. In CFD trading, the contract for difference therefore reflects the leveraged price development of the underlying asset.

The entire trading is handled directly with the CFD broker. The buying and selling prices and the conditions are determined by the broker. Market makers such as Commerzbank offer investors the opportunity to trade CFDs on shares, indices, commodities, precious metals, currencies, interest rates and futures.

Plus500 – Crypto Currency

Plus500 offers the ability to buy or sell Crypto Currency CFDs. The company promotes the world’s most popular crypto currencies with leverage and 24/7 availability. According to Plus500, the crypto-currency market is open 24 hours a day and weekends. Plus500 can trade the following digital currencies:

  • Bitcoin
  • Ethereum
  • Bitcoin Cash
  • Litecoin
  • NEO
  • Ripple
  • IOTA
  • Monero

Plus500 promises its customers enhanced tools and features that they can use to gain control of their accounts. The following tools are offered:

  • FREE messages
  • Stop-Limit / Stop-Loss / Trailing Stop
  • Protection against negative balance
  • Guaranteed Stop

Plus500 – App – Trading via Smartphone

Like many other trading platforms, Plus500 offers a smartphone app. In the Google Play Store, the online broker describes itself as “Europe’s No. 1 CFD provider by number of new traders”.

According to the description, the app offers an elegant and intuitive user interface that is suitable for trading at any time, anywhere. The app requires extensive access rights.

Trading CFDs at Plus500

In the past, CFDs were mainly used by professional traders to offset potential losses on larger trades.

But more and more private investors are interested in trading CFDs. This is because of the simple and transparent rules that make this trading work. But what should not be lost sight of: Trading with CFDs also involves high risks.

Many providers go along with the CFD trend. Many who used to offer binary options are now also offering contracts for difference or have completely changed their offer to contracts for difference.

Since there are many binary options providers who have fraudulent intentions, CFD providers should also be checked carefully to ensure that they are honest.

Our law firm has extensive experience with several CFD providers. In many individual cases, we have been able to obtain a partial or full refund of the funds paid.

Experience and tests

When trading CFDs, investors bet on the rising or falling prices of stocks, currencies, commodities and other indices. But without actually owning them. Since these are leveraged trades, CFD losses can be much greater than the total loss of the bet.

At the same time, the business practices of many providers are difficult to understand.

Furthermore, one should ask oneself, can one trust the real time prices quoted? Are the spreads between Asks and Bids too much in favour of the provider? Are potential winnings retained and are requested additional contributions justified?

Such issues are not only viewed critically by investors and law firms, but also by the supervisory authorities.

The trade with contracts for difference is therefore in the sights of the financial service supervision BaFin, in Belgium CFD business was already forbidden.

Legal Advice and Investor Protection: Help by Lawyer

The lawyers of the Herfurtner law firm assist clients in all European countries who have suffered losses in the field of CFD trading.

After the initial consultation with a lawyer, there is always an individual examination of legal steps to be taken, for example with regard to claims for damages, the validity of claims for additional payments or the effectiveness of the terms and conditions. We would also be pleased to check your individual claims and possibilities.

Herfurtner Rechtsanwälte advise clients in particular in the fields of banking and capital market law, corporate law and real estate law.

You are welcome to tell us in the comments how your experience with the provider Plus500 has been.