Plus500 vs City Index Forex Broker Comparison For Australia

Trading Spreads and Other Fees – Plus500 vs City Index

Both Plus500 and City Index are known as market makers with dealing desk. This means the brokers are always the counterparty when you execute a trade. This trading model is sometimes known as B-book, as the brokers keep the customer’s trades on their own books.

Although market maker types broker profits when your trades lose and can be therefore seen to be working against you, there are still good reasons to consider choosing a market maker. These include:

1. Your spreads will generally be fixed. Advantages of this include:
   • Easier to trade when large market shocks occur
   • Better consistency during peak and off-peak trading hours
2. No commissions add-ons to your costs
3. You trades are more likely to fill even when liquidity in the general market is low
4. Market maker spreads need to be competitive due to competition, so spreads will generally reflect market prices.

Spreads comparison

Looking at our sample of spreads, it does appear that Plus500 spreads are slightly more narrow than City Index using each broker’s own platforms. Spreads on MT4 for City Index are wider and so, therefore, more costly and not suitable for scalping.

It is worth noting that City Index spreads are taken from their website and is a time-weighted average for the first quarter of 2017. Plus500, on the other hand, don’t provide a time-weighted average and instead provide real-time quotes offering a transparent pricing model.

Given we are comparing spreads across a different time period, we can’t say with certainty that Plus500 spreads are going to be narrower than City Index but we can say they are likely to be very similar.

Other Costs

Guaranteed Stop Loss Order (GSLO) –

• Both brokers offer GSLO for a small premium

Inactivity Fees –

• If you don’t trade with your City Index account for a 24 month period, then you will incur a monthly $15 charge.
• If you don’t log into your account for 3 months, Plus500 will charge you USD$10 once a month until you log back in.

Deposit and Withdrawal Charges / Funding Charges

Additional Notes:

1. City Index allows a maximum of $20,000 for a single transaction
2. City Index allow $20,000 per 24 hours when you withdraw online with credit cards and debit cards

Spreads Conclusion – Plus500 vs City Index

We noted that Plus500 had slightly cheaper spreads than City Index however we realise we have applied sample spreads for a different time period. If choosing between Plus500 and City Index, we suggest looking at other criteria as part of your selection, as this is where the most noticeable differences will be found.

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Leverage – Plus500 vs City Index

Both brokers are multi-regulated and the leverage you’ll be offered is dependent on the subsidiary you are signed up to and the asset class you are trading.

Plus500’s maximum leverage is 300:1 and offered via its FSA regulated branch in Seychelles. In Singapore, MAS requires Plus500 to cap forex leverage at 20:1, while elsewhere in Australia (ASIC), NZ (FMA), Europe (CySEC), the UK (FCA) and South Africa (FSCA), the broker limits leverage to 30:1.

If you are a City Index trader, 30:1 is the highest leverage available through the brokers Australian, UK and Dubai (DFSA) subsidiaries. In line with MAS regulation, Singaporean offers maximum leverage of 20:1.

Leverage can be seen as a way to supercharge your earnings, as the brokers will lend you greater levels of cash for each dollar your deposit in your account. Generally, forex currency pairs do not change enough for major savings to occur however with greater funds invested, you can increase your profits despite marginal changes in currency.

It is important to note currency movements can be either favourable or unfavourable. When currency movements don’t move in your favour, you will make large losses which will need to be paid to the broker.

It is therefore important to use leverage responsibly. This means assessing the risks with your trade and the level of leverage you are willing to take on.

Conclusion

Plus500 offers the highest leverage via its offshore, FSA regulated branch in Seychelles. Elsewhere, both brokers are overseen by top-tier regulators and restricted to offering low leverage of 30:1 or less.

Risk Management Inclusions

Spread betting carries risks, but there there are tools that can help protect your investments against risk.

Both brokers offer the option of guaranteed stop-loss orders (GSLO).  GSLO provide a level of security for each trade you execute for a small premium in your spreads. These are useful if you lack experience in trading or are trading in a volatile market.

Plus500 include guaranteed negative balance protection when you sign up with them and do not charge for this. Negative balance protection is a feature not offered by many brokers. Most brokers will only offer a margin call system, which will notify you to top up your account when savings are below required limits and try (but not guarantee) to close your positions if your account balance looks like going into negative.

Beyond the standard risk management tools that all brokers offer such as stop loss and trailing, stops and price alerts, City Index offers some features Plus500 do not. These include:

• IF Done-Orders –  A contingent order is actioned only in the event criteria for the first is fulfilled.
• One Cancel the Other – This is when you two orders are placed simultaneously. In the event one order is filled, the other will order will immediately close.
• Hedging

Conclusion – Plus500 vs City Index

Both brokers offer a better range of risk management features than you will find with most brokers. City Index, in particular, has a larger mix of unique risk management tools however we personally favour Plus500. The reason we like Plus500 is that they include guaranteed negative balance protection. Given Plus500 appear to have spreads that match City Index’s spreads and also include guaranteed negative balance protection means you will not pay extra to protect your funds.

Open a demo account >>Visit Plus500 >>

Trading Platforms – Plus500 vs City Index

Plus500 Trading Platform

Plus500 have their own propriety platform, they do offer MetaTrader, which is commonly available with other brokers. The platform is available for web, desktop and mobile apps(Android and iOS). Regardless of which medium you use for trading, the platform is the same for all tools, meaning you can seamlessly switch between trading mediums.

One unique feature is that the platform is available in 30 languages. This may appeal to you if English is not your preferred language.

The platform’s main feature is its user-friendly design. Its clean interface and ease of navigation are exceptionally good for those new to trading, as they will not be overwhelmed with too much information.  The main catch with this design is that the platform has limited customisation features.

On the main screen, you will find all the information you need along with 4 tabs where you can access your past and current positions.

The platform allows you access to 2000+ instruments and you can choose from over 100 technical indicators.

One issue some users may find with the platform is that one cannot add 3rd party tools to the platform. This means you can only use Plus500 charting tools.

City Index Trading Platforms

Web Trader Platform

Released in Sept 2018,  Web Trader is City Index’s online platform will Advantage Web, which is being phased out. Web Trader is built using HTML5 rather than Flash, which means better loading performance with less power.

The following key features are available:

Customisation

• 10 workspaces that you can build with your desired charts, news, positions and watch lists.
• Single click between workspaces. and ability to switch between them with a single click.
• Advanced charts which consist of custom indicators and drawing tool which can capture precise information
• Charts with an overlay of 2 different markets

Charts

• 10 different chart types powered by Trading View
• Trade within charts
• 57 indicators

Intelligent Tools

• Improved search functionality
  • Search by market name
  • Search by stock code
  • Browse by product
  • Browse by region
• P&L balance bar
• Risk management features in the smart trade ticket
  • Set ticket by P&L, price or points away.
  • Real-time ‘Margin required’ shown on the ticket price.
  • Set more than one stops and limit for each position on the trade ticket
  • hedging via trade ticket

360° Market view

• Reuters
• Latest market prices
• Economic Calendars

City Index AT Pro

Available as a download on desktop, AT Pro is for advanced users as it offers the most powerful trading features in the City Index trading suite. The following features are available:

• Creation custom templates  with .NET, C# or Visual Basic
• 140 indicators
• Backtesting tools
• 25 drawing tools
• 15 timeframes

City Index Apps for IOS and Android

• Apple. Android mobiles and tablets
• 60 indicators are available

MetaTrader 4 (MT4) – City Index

City Index offers MetaTrader 4. MetaTrader 4 is the most commonly used trading platform for both traders and brokers. Its popularity means you can sure to find all the essential features you will need for successful trading.

As MT4 is common, it means you can easily change to other brokers without needing to learn a new trading platform.

MT4 is best if you trade Forex or other decentralised assets such as commodities. It is not the best platform for assets that trade via a centralised exchange such as shares or stocks.

Conclusion – Plus500 vs City Index

Normally we would recommend MetaTrader 4 platform however we have previously noted that spreads with MT4 for City Index are wider so we advise looking at one of the brokers’ custom platforms.

Choosing between Plus500 or City Index custom platforms is a case of personal preference. We are impressed with City Index Web Trader platform because it all the charts, timeframes and indicators the majority of traders will require and is built to HTML5 meaning faster speeds and therefore less slippage.

We suggest signing up for a demo of each broker’s platform and testing them out for yourself.

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Contracts for Difference (CFDs) – Plus500 vs City Index

Both brokers offer a good range of CFDs. In terms of forex market access, City Index provide access to 65 currency pairs, while Plus500 offer over 60 fx pairs.

• City Index CFDs: Forex, indices, shares, cryptocurrency, metals, bonds, options and interest rates.
• Plus500 CFDs: Forex, shares, commodities, indices, cryptos, options and ETFs.

Shares

If you buy shares CFDs with City Index, then you will pay 0.08% / $5 for Australian shares and 2 cents per share / $15 for international shares.

Plus500, on the other hand, don’t charge a commission for trading share CFDs.

Commodities

City Index offers both cash CFD and futures for trade. Cash CFDs are ideal for short-term trading and have tighter spreads. Futures are better for long-term trade and have wider spreads, but you won’t incur overnight finance charges.

Disclaimer: The FCA (Financial Conduct Authority) ban on the sales of digital cryptocurrencies to retail clients prohibits UK traders from accessing these types of financial services. However, clients from Europe, Australia and the rest of the world can still trade crypto assets via their retail investor accounts.

Conclusion – Plus500 vs City Index

Both brokers offer a diverse range of CFD products. We recommend deciding on the CFDs you may wish to trade with and investigate the spreads, margins/leverage each broker offers or will require. Global financial regulators consider CFDs as complex instruments that need to be treated with caution.

Open a demo account >>Visit Plus500 >>

Customer Service – Plus500 vs City Index

It is interesting to note that Plus500 doesn’t offer phone contact with their customer services. If you desire human interaction for your support, then City Index will be a better option for you.

Research and Education:

Plus500 offers little in the way of research tools. Research tools are valued by traders as it can help them makes the right trading decisions in order to be profitable. Many of City Index’s research tools are powered by Trading Central.  This company specialises in providing award-winning analysis and pattern recognition tools that help traders better participate in financial markets.

As you can see Plus 500 don’t offer Education tools. City Index, however, offers a wealth of educational resources.

City Index offers a training course that will teach you all about training strategy. This course is valued at $5000 and is developed by TECHFX TRADERS. The course covers 3 different modules “including forex”, “learn to trade” and “How to trade like a pro”

TECHFX TRADERS are an independent firm that offers top quality and timely technical analysis to traders. They know the trading industry inside and out, so are able to provide information that will help grow your trading knowledge.

TECHFX TRADERS also manage to run the City Index Webinars. Here a range of trading topic is covered over the web, where you will have the opportunity to ask questions as part of the session.

Demo Account:

With City Index, you can choose if you wish to use City Index CFD platform or MT4. The demo account has a limit of 12 weeks however, you can contact support and they will reactivate the account at the end of the 12 week period. This refresh means you will lose access to existing virtual funds.

Plus500, however, offer unlimited access with their demo account. If your virtual funds dip below $200, then your virtual funds will reset to default.

Conclusion – Plus500 vs City Index

Without a doubt, City Index offers better customer support tools. If you need assistance, City Index has contact you can use to directly reach customer service for support. Plus500 does provide support however their customer support team doesn’t have the same immediate presence City Index have. For example, support contact in Australia.

City Index also offers free custom services like research, education tools and video tutorials. Plus500 does not offer any of these.

We do, however, like the fact Plus500 offer an unlimited time/funds platform demo. This is a feature we would like to see offered by more brokers.

Bonus Programs – Plus500 vs City Index

Plus500

The Plus500 offer a rebate and first deposit program. The higher your initial deposit to start trading is, the more trading credits Plus500 will reward you with. Likewise, the more you trade each month, the more T-points for trading credits you receive.

Plus500 First Deposit Program

Plus500 Rebate Program

For every $1500 traded, you will receive a different amount of TP points depending on your chosen currency pair.

City Index

A cash rebate program is on offer with City Index. City Index will reward you with rebates, provided you reach a certain level of trading volumes. Rebates will vary depending on your chosen asset class.