Is Plus500 a scam? Is Plus500 trustworthy?
Many people wonder if Plus500 is a scam. On Plus500 you can invest in CFD shares, cryptocurrencies (Instrument availability subject to regulations) and commodities without commissions. Because of this many people doubt the legitimacy of Plus500. In this article, we investigate whether Plus500 is a con broker.
Tip: try it out yourself
Are you wondering if Plus500 is a con? You can try trading with Plus500 yourself! Plus500 offers new costumers a free demo. The demo gives you the possibility to try out the possibilities for free and without risk. That way, you can, for example, contact customer service yourself to test whether they respond quickly to questions. Use the button below to create a free account right away:
Is Plus500 a scam?
After extensive research we came to the conclusion that Plus500 is not a scam. There are many negative reactions on the internet. This is mainly because many people trade with Plus500 without knowing what they are doing. Because of this they lose a lot of money. It is important to practice with the software before investing with large amounts.
On the Plus500 platform you can use a leverage. This makes it possible to trade on margin: you then open a large trade with a limited amount of money. However, if you use too much leverage, you can quickly lose the full amount in your account. For example, with a leverage of 1:30, you already lose the full amount in your account when the price drops 3.33 percent. Therefore, be careful with the use of leverage when you start trading with Plus500.
How secure is your money at Plus500?
Some people fear that Plus500 is a con or scam company that steals money. Fortunately, this is not the case. Plus500 has been around since 2008 and handles the funds of all users well. All money is stored in separate accounts and Plus500 does not speculate with the money itself. This makes it secure to deposit money on Plus500. In the image below, you can see how Plus500 handles customer funds:
Is there supervision?
Plus500 is also supervised by various parties. It is common for financial companies to be under the supervision of a supervisor authority. Supervisors ensure that a company complies with all applicable laws. Below you can find an overview of the supervisory authorities who monitor Plus500:
- Plus500UK Ltd authorized & regulated by the FCA (#509909).
- Plus500CY Ltd authorized & regulated by the CySEC (#250/14).
- Plus500SG Pte Ltd, licensed by MAS (#CMS100648-1) and IE Singapore (#PLUS/CBL/2018).
- Plus500AU Pty Ltd (ACN 153301681), licensed by: ASIC in Australia, AFSL #417727, FMA in New Zealand, FSP #486026; authorized financial provider in South Africa, FSP #47546
The fact that Plus500 is supervised makes the company legit and not a scam. Always pay close attention to whether the company you want to trade with is under supervision.
How legitimate is Plus500?
Plus500 is 100% legit. We extensively researched the company and found that Plus500 served more than 200,000 customers and completed 35 million transactions in 2019. Plus500 is listed on the London Stock Exchange and is monitored by all shareholders in this way. The company is also the main sponsor of Atlético Madrid. It is unlikely that a scam company could run its business this way. In our review you can read more about Plus500.
Why are so many things free on Plus500?
On Plus500 you can use many free services. Plus500 offers all customers a free demo. However, this is not surprising: Plus500 hopes that more people will become enthusiastic about the trading platform by first trying the program. Offering a demo does not cost Plus500 anything. So, there is a win-win situation here.
Many users fear that Plus500 is a con because they offer trading without commissions. However, this is quite common for CFD brokers. Plus500 still makes money by calculating a spread. You can read how this works exactly in the article how much does investing at Plus500 cost?
Be careful not to lose any money
It is now clear that Plus500 is not a scam. At the same time, it’s a fact that many people lose money by trading with Plus500. It is therefore important to properly manage your risks when you start trading on Plus500. But how do you lower the chance of loss?
You can do this by always using a stop loss. With a stop loss you ensure that your positions are automatically closed at a certain loss. This way you avoid losing the full amount in your trading account because you make a mistake.
It’s also important to apply the leverage in moderation. Use the lever only on securities that are not very volatile. Otherwise, you may just lose the full amount in your available in your trading account.