Forex broker Pepperstone offers ECN broker pricing with a commission of $3.50, choice of MetaTrader 4, 5 and cTrader trading platforms, leverage up to 500:1 and social trading. Plus500 is a market maker with no commission and large choice for trading CFDs including 9 cryptocurrencies
When Compare Forex analysed Pepperstone vs Plus500 as best forex brokers in the category of spreads, it is apparent Plus500 spreads are much wider. A wider spread means you will pay more in transaction costs.
Spreads on 02/10/2018
EUR/USD
USD/JPY
AUD/USD
GBP/USD
Pepperstone (Avg)
0.16
0.25
0.27
0.49
Plus500 on 5/03/2020
0.60 or 0.00006
0.70 or 0.007
0.80 or 0.00008
0.90 or 0.00009
Our data from the table above comes from each brokers account that offers their best spreads. As Plus500 only offers a single trading account and do not provide their average spreads therefore, we have taken a spread sample at a point in time. Our sample should not be taken to be official as spreads change rapidly throughout the day.
50 deep pool of liquidity providers for industry-leading low spreads
Scalping, hedging
Expert Advisors or EAs are also supported.
Pepperstone offers a choice of two other accounts. These are:
Pepperstone Standard Account
Designed for novice traders, this account offers all the same features as the Razor Account but without commission. In place of commission 1 pip is added to the spread.
No commissions
Spreads from 1 pip GBP USD
Available for MetaTrader 4, MetaTrader 5
Best for novice traders not wanting commission costs
Pepperstone Swap Free Account
This account is exactly the same as the Razor account but in place of overnight holding fee or rolling interest, there is a small admin charge. This account has no swap fee which means it is compliant with sharia law which forbids Muslims from receiving or paying swaps. To be eligible for this account, you must be able to prove you are Muslim.
Active Trader – Savings through rebates
If you are a high volume trader, Pepperstone can offer you rebates through their Active Trader program. If you trade at least 100 lots a month then you can receive rebates which will be paid directly into your bank account.
Why Pepperstone spreads are narrower
Pepperstone uses an Electronic Communication Network (ECN) pricing. As Pepperstone is the issuer of their own products, they cannot be called a true ECN broker in a strict sense of the word. Pepperstone connect you with liquidity provider via ECN and have no dealing desk, requotes or price manipulation meaning they can provide ECN pricing as they pass prices directly to you.
We recommend the Razor account as this account offers the narrowest spreads.
Plus500 Live/Pro Account
Plus500 only offers 1 type of Account with the following features:
Plus500 is a Market Maker
No minimum or maximum trade size in lots apply
No Commission charged
Minimum trading deposit of $100
Spreads from 0.01
Leverage of up to 300:1 with ASIC regulation
Leverage of up to 30:1 for retail traders and 300:1 for professional traders with FCA regulation
Over 60 Currency Pairs to choose from and trade
Why Plus500 spreads are wider
Plus500 is a market maker or dealing desk broker. In practice, this means that Plus500 set their own prices for which they will commit to buy or sell for each currency pair. Market makers hold security and use this to play the role of the other side of the trade. That is if you want to place an order to buy a currency pair, Plus500 will sell you the security they have. If you want to sell a forex pair, Plus500 will buy the security off you.
Spreads which are the difference between the buy and sell price of the currency pair are wider because the broker will add 1-5 pips (percentage in point) into the spread for their services. This is how a market maker such as Plus500 make their profit.
While Plus500 does not charge commission there do have other fees. These include:
Plus500 Premium Fee (also called an overnight fee) – A fee is charged by the broker if traders hold onto their position when markets are closed.
Plus500 Inactivity Fee – Account that has no activity over 3 months will incur $10USD fee
Guaranteed Stop Order – We delve more into this lower down. If Guaranteed Stop Orders are used it generally means a wider spread
Trading Spreads and Fees Conclusion
When deciding between each account you will need to consider between 2 basic features these are
Spreads – Generally, high volume traders will benefit greater from tighter spreads combined with larger lot size despite the commissions. You will need to do the numbers but wider spreads and lower lots size may end up with greater cost saving.
Features – If you plan to use features such as scalping, hedging and EAs then you will want to consider Pepperstone as Plus500 don’t allow these.
From our perspective we consider Pepperstone offer better value as being an ECN trader means their costs are more transparent.
Plus500 offers one of the most diverse ranges of CFDs among all foreign exchange brokers in the markets. Unique offerings when trading CFDs extend to soft commodities such as lean hogs, live cattle and feeder cattle. We have not seen other brokers allow you to buy and sell securities of these types.
They also offer several cryptocurrencies, Shares CFD, Options and ETF round out their trading suite which is also not necessarily available with other brokers.
The diverse range of instruments is why Plus500 has specifically designed their platform so users can take advantage of all these instruments without being overwhelmed with data.
Pepperstone CFDs
Pepperstone offers a solid range of CFDs for trading. These include the following:
Indices – 14 Indices (0.50% margin)
Soft commodities – 5 commodities and a margin of 2%
Precious metals –5 crosses for Gold/Silver (0.2% margin), Platinum and Palladium (0.2% margin)
Energies – 3 Energies (0.2% – 1%)
Shares CFD – NYSE 60+ stocks (5% margin) and cost of per share of 0.02c.
Currency Index CFD – USDX basket (leverage of 100:1)
Cryptocurrencies CFD
Trading of cryptocurrencies has emerged as a populator option for traders in recent years. Trading of cryptocurrency is exciting because it is so volatile which means opportunities for large rewards.
Plus500 Cryptos
Plus500 offers one of the largest range of cryptos of all online forex brokers. Not only do they offer the more common ones like Bitcoin, Bitcoin Cash, Ethereum, Dash, Litecoin but they offer some rare ones like NEO, Monero, IOTA and EOS.
These cryptos are available with a margin of 5% (1:20) to 10% (1:10)
Pepperstone Cryptos
The collection of cryptocurrencies Pepperstone offer is quite broad but not as diverse a Plus500 offer. Cryptos include Bitcoin, Bitcoin Cash, Ethereum, Dash, Litecoin.
All Cryptos are available with leverage of 1:20 or 5% margin.
Pepperstone vs Plus500 CFDs Conclusion
Plus500, when compared with Pepperstone, offer a larger range of CFDs. If you are looking for a broker that offers a great range of different trading options then we recommend Plus500.
Pepperstone vs Plus500 Forex Trading Platforms
In our review of the available trading platforms, each broker offers different trading platforms with different features. All Pepperstone platforms offer Webtrader to use in browsers and can be used with iOS, Android tablets and mobiles and Mac and Windows PCs.
Pepperstone Trading Platforms – MetaTrader 4
MetaTrader 4 offered by Pepperstone is our favourite forex trading platform. MT4 is the world’s most popular forex trading platform and includes features such as:
Easy to use interface
One-click trading for prompt order management
Expert Traders (EAs) which is algorithmic automated trading. (Plus500s does not allow this)
9 timeframes including M1/5/15/30, H4, Daily, Weekly, Monthly
30 indicators
4 pending order types
3 chart types (line, bar, candlesticks) and direct trading from the chart
31 graphical objects
Hedging
32 bit, mono-threaded platform. Uses less memory
Expert advisors for algorithmic trading
Pepperstone MT4 Add-On
Smart Trader Tools is Pepperstone own an add-on enhancement tool for MT4. There are some 13 features that can lead to better and more successful trading.
Alarm Manager – Price alerts via SMS, email, web popup, sound alerts and twitter of activities. Can open, close and place pending order.
Connect – a centralised portal that provides relevant news and technical analysis to help with investment decisions
Correlation Matrix – allows for analysis of the correlation between your chosen instruments.
Correlation Trader – allows for easy comparison of market charts and direct trading from the tool.
Excel RTD – Puts account, ticket and price data into Excel spreadsheet with basic formulas. Trading commands can be sent from Excel if you have programming skills.
Market Manager – Watch lists and account and order activity can be controlled from a separate convenient window.
Sentiment Trader – this tool allows you to follow the general sentiment of other traders regarding your chosen instruments.
Stealth Orders – Allows you to hide your pending orders and set entry and exit positions from the market.
Indicators – SO traders can see potential profit and loss results based on historically proven strategies.
Session Map – Provides a quick overview of the world’s major markets and their time zone.
Trade Terminal – provides an alternative view of your MT4 window with different analysis features. Can assist with faster and more precise trading.
Tick Chart Trader – tick display of instrument performance to help with lead to faster decision-maker and therefore enhance the benefit of the one-click trading feature.
Mini Terminal – An extension of the Trade Terminal for those that want a terminal for each market.
Pepperstone Trading Platform – MetaTrader 5
This platform is an upgrade on MetaTrader 4. Not only does it offer all the features MetaTrader 4 offer, but improves on many of these features. While MT5 is as popular as MT4, it is growing and it is expected that MetaTrader might phase out MetaTrader 4 support in future.
Shares CFD trading (not available on MT4)
Ability to view up to 100 charts with21 time-frames
44 graphical objects
38 built-in indicators
80 MetaTrader indicators (more can be purchased from codebase)
Netting and Hedging accounting modes for orders and trades
Superior testing capability
Advanced depth of market (DOM)
1 more order execution type and 2 extra pending order types (compared to MetaTrader 4)
A 64-bit multithreaded platform for speed and efficiency
Expert advisors for trading automation
Pepperstone Trading Platform – cTrader
cTrader is a popular alternative to the MetaTrader platform. Many people find the platforms clean and uncluttered interface better than what MetaTrader offer. This makes it a great option for those new to trading. It is also popular as it offers advanced charting features.
Some key differenced include:
Level II pricing
charts that are detachable for multiple monitors
Advanced backtesting tools
cAlgo with C# for trading automation
Ability to store profiles, passwords and templates in the cloud
3 chart modes -single, multi and free chart.
Advanced order protection – wide choice of order types
The Plus500 Forex Trading Platforms
Plus500 have their own custom proprietary trading platform and do not offer MT4. In our review of the ‘Plus500 Trading Platform” we found the platform to be a very user-friendly and intuitive platform thanks to clutter-free with minimal button interface.
Available for desktops, browser, mobile and tablets the ‘Plus500 Trader Platform’ is not feature-rich but still manages to make you feel that you have the tools you will need at your disposal when needed. From the main window, you can see 4 sections each with a different purpose. The key feature that you can see a range of CFDs along with open positions, pending orders and quotes and price movements without needing to open different windows. Given Plus500 offer around 2000 trading instruments which can be overwhelming this simplicity is very useful. The main windows also contain charts which can show graphical representations of price movements.
One big plus is the platform is integrated with the trading section on the brokers’ website. This means you can trade without installing the platform once you have signed up. There are however a few limitations with the platform. No scalping or EAs are allowed and it does not have a social trading feature. With simplicity comes a lack of advanced features that can help with trade management, decision making and execution.
Plus500 Trading Platform in our opinion is great for beginners or for those looking to trade with a wide variety of CFDs. The platform, however, is ideal if you are looking to use EAs and advanced tools. Check out our full Plus500 review when compared to IG Markets.
Forex Trading Platforms Conclusion
We believe MT4 provides is a proven platform for by both beginner and advanced users. The Smart Trader Tools offered by Pepperstone allow users a wealth of trading tools you can use EAs, hedging and scalping which are not available or allowed with Plus500, therefore we are recommending Pepperstone when it comes to platforms.
In our review, we found Pepperstone offer superior Customer Service when we compare with Plus500. Pepperstone customer service has won numerous awards by the CFD industry, a reflection of the excellent service they offer.
Plus500 got the thumbs up from us because their live chat available 24 hours a day for all 7 days of the week Pepperstone only offer this service during business hours Monday to Friday. We felt that Pepperstone customer support was superior in all other ways. For example, Pepperstone offers phone and email support in a range of different countries. Plus500, on the other hand, do not offer phone support at all. We found it surprising Plus500 does not offer phone support given this type of service is a basic expectation from clients.
Another example is Pepperstone provide email contact of all the individual departments you might want to address a question to. Plus500 integrate their email system directly into their web portal so we don’t actually know who we are addressing our questions to.
Unlike phone and email support, live chat is available with both brokers. We put the live chat feature of each broker to the test and found Pepperstone was able to answer all some complex questions in a timely manner and professional manner. Plus500 struggled with some of our technical questions and the waiting time seemed to be longer.
When it comes to education tools, Pepperstone has a large library of educational tools including a glossary of trading terms, webinars, trading guides and FAQ. Plus500 did not seem to offer any education of note.
Both brokers offer a demo account that is free to use for an unlimited time. This can be an invaluable tool for learning forex trading until you gain the confidence and experience needed for successful trading.
Pepperstone vs Plus500 Customer Service Conclusion
We believe the customer service of Pepperstone is among the best on offer in the industry. We, therefore, recommend them over Plus500.
Pepperstone vs Plus500 Deposits and Withdrawals
Funding with Pepperstone
Except for bank wire withdrawals, Pepperstone does not charge fees for its funding services. This means you can make deposits using a method such as debit cards and credit cards using Visa or MasterCard, Digital wallets such as Paypal, Neteller, Skrill, the Australian e-wallets BPAY and POli and Chinese merchant Unionpaywithout any fees from the broker. If you make your withdrawal before 7 am AEST then you can receive your funds on the same day. After this time and you can receive your funds a day later. Your account must be in your name and linked with your Pepperstone account. If you are using bank wire, your fund can take 3-5 working days to show in your account. Bank wire withdrawals will incur a fee of USD $20.
Funding with Plus500
Making a deposit or withdrawal does not incur fees from Plus500 however your payment merchant may charge fees.
With Plus500 you can deposit money with the following methods
Debit/Credit card – Visa and Mastercard
Paypal
Skrill
Bank transfer
Plus500 advise you can expect fees from the merchant for the following situations:
Overseas credit cards
Bank transfer
Forex Conversions
Withdrawals generally take about 3-7 days to process but this will vary depending on the method you have used for payment.
Pepperstone vs Plus500 Deposits and Withdrawals Conclusion
Ultimately, you’ll need to decide who you prefer to use as your payment issuer and investigate what charges with issuer has from their end. Pepperstone offers zippy deposits and withdrawals. Plus500 offers some funding methods not available with Pepperstone.
Pepperstone is regulated in the following regions:
Australia with the Australian Securities and Investment Commission also known as ASIC
The United Kingdom / Europe with the Financial Conduct Authority also known as FCA
Plus500 have the following regulation in addition to ASIC and FCA
Cyprus with Cyprus Securities and Exchange Commission also known as CYSEC
New Zealand with Financial Markets Authority also known as FMA
Singapore with Monetary Authority of Singapore also known as MAS
Trading with speculative stock can be high risk, it is therefore important to choose a broker that is regulated by a tier-one authority. These regulators can help protect your funds by requiring that the broker keep your funds in a tier-1 bank account, that the broker provides a product disclosure statements (PDS) and establish a complaints process.
Pepperstone vs Plus500 Execution Speeds and Risk Management
In our review of execution speeds, we found that Pepperstone offers excellent execution speed while Plus500 don’t publicise their execution speeds. Instead, Plus500 offers a range of risk management tools which may help manage the risks of slippage.
Pepperstone Execution Technology
Pepperstone is very active about promoting the quality of its execution technology and execution speeds on their website. The broker claims an average execution speed of <50ms and a maximum speed of 240ms. This infrastructure helps ensure risks associated with ‘slippage’ are minimised as they use variable spreads. This exceptional speed is achieved via the following methods
Dedicated Fibre Optic Cable – Dedicated cables mean less data congestion. Fibre Optic is currently the fastest available technology for transmitting data.
Equinix Servers near liquidity centres – Pepperstone use servers in data centres near the New York financial centres. This strategy means there less distance for data to travel when you execute an order.
Virtual Private Server (VPS) Partnerships – For traders needing 24/7 up-time and extra fast latency and speed Pepperstone have partnered with New York City VPS servers. A promotional code is available for a 20% discount.
Lag time resulting in ‘slippage’ can potentially be costly. Pepperstone, therefore, promise extremely fast execution speeds. This means the price the client opens their trade should be the final price. Despite the low risk, Pepperstone does not give any guarantees slippage won’t occur. This means your account can still go into negative.
Plus500 and Risk Management
Plus500 is a market maker so the quoted buy and sell price at the time of execution should occur. Slippage may still occur if the broker does not hold enough liquidity at the time of order. If this happens then your position will go to the next available order. Slippage can also occur if the market is very volatile and the broker’s quotes are not up to date when you place your order. Plus500 offers a range of risk management tools that can help manage your profits and losses when trading CFDs that carry a high level of risk.
Risk Management tools on offer
Pending Order – Available with both Pepperstone and Plus500. A close at Profit [Limit] / Close at Loss [Stop Loss] is an instruction to buy or sell when defined preconditions are met. When your set level of profit or loss is hit then the broker will seek to buy or sell your position. Pending orders, however, do not protect you from losing money from ‘Slippage’ as the broker may not have the liquidity to buy or find a buyer to sell before a price movement occurs.
Guaranteed Stop/Loss – You can pre-set absolute limit on your trading position to protect yourself against potential losses. If price movement is unfavourable, your position will automatically be closed at price limit regardless if slippage occurs. You must select Guaranteed Stop Order when opening your position and a certain amount of pips will be added to the spread to cover the broker’s risks. With Pepperstone, protection against losses is not guaranteed. They only offer simple stop-loss or limit orders.
Trailing Stop – This helps you can lock in a certain amount of profit or protect a certain amount of loss when you place a pending order. Your position will remain open unless the price has moved a certain percentage away from its current market price. Neither Plus500 or Pepperstone provide a guarantee so you are still vulnerable to ‘slippage.
Negative Balance Protection – This helps protect your funds from going into debt. Should your account balance fall below a certain level of leverage margin’ then a Plus500 will make a ‘Margin Call for you to add funds to your account. If you don’t then they close your position. Your account can still be at risks if you don’t increase the balance as slippage may still occur. Pepperstone also offers this feature. Do note that neither broker guarantees this.
Pepperstone vs Plus500 Execution Conclusion
“Slippage” can result in a large difference between your expected profit/loss and your actual profit or loss. While Plus500 provides a range of risk management tools there is a lack of transparency in the liquidity they hold and their methods for obtaining quotes. For this reason, we prefer the tight spreads and fast execution offered by Pepperstone when managing slippage.
Leveraged Products offered by Pepperstone is 500:1 while Plus500 offers 300:1. Unless the forex market is very volatile, changes in currency pairs tend to be minimal, it is for this reason, traders may like high leverage as higher leverage can mean greater profits for minor forex changes. On the flip side, it can just as easily mean more dramatic losses.
Pepperstone vs Plus500 Leverage Conclusion
Many regulators around the world (such as in America) are starting to reduce available leverage. Experienced traders also don’t tend to use large leverage. While using large leverage does come down to individual preference and risk tolerance we recommend Plus500 because it does not allow excessive leverage. You don’t have to use the maximum available leverage however, you are free to reduce the leverage lower if you wish.
Pepperstone vs Plus500 Joining Bonus
Both Pepperstone and Plus500 offer a program that gives you bonuses for signing up with them. Depending on your need, the bonus may add some value to your account.
Pepperstone joining bonus
Plus500 joining bonus
Plus500 has first deposit bonus program which rewards you with extra funds to trade with. The more amount of funds you make on your first deposit, the more funds Plus500 will reward you with. To earn the bonus, you will need to achieve a minimum number of trades. Please see screenshot for a summary of each bonus level.
Spreads which are the difference between the buy and sell price of the currency pair are wider because the broker will add 1-5 pips (percentage in point) into the spread for their services. This is how a market maker such as Plus500 make their profit.
Plus500 CFDs
Pepperstone is very active about promoting the quality of its execution technology and execution speeds on their website. The broker claims an average execution speed of <50ms and a maximum speed of 240ms. This infrastructure helps ensure risks associated with ‘slippage’ are minimised as they use variable spreads. This exceptional speed is achieved via the following methods
