Plus500 vs IG Markets

Trading Spreads and Fees Plus500 vs IG Markets

When trading there are 3 basic types of fees you will want to be aware of. These consist of:

1. Trading Fees: The expenses you incur when you trade. These will be in the form of spreads or commissions.
2. Holding Fees: Occurs if you hold a leveraged trading position overnight.
3. No Trading/Account Fees: Includes deposit and withdrawal fees, inactivity fees and fees for risk management tools.

Let’s review each of these categories one by one.

Trading Fees

Both Plus500 and IG Markets spread fees are relatively low for a market maker. However, they are high when we compare these fees to a broker that has no dealing desk (NDD). No dealing desk brokers include those that use Straight Through Processing (STP),  Electronic Communications Networks (ECN), and Direct Market Access (DMA). Plus500 and IG Markets offer clients higher bid/ask spreads because they do not charge a commission. Instead, all compensation to the broker for facilitating trades is included in the spread.

Looking at the spreads we can see that Plus500 generally offers lower spreads than IG for standard accounts. Using standard accounts is a like for like comparison between each broker. With the standard account fees are incorporated into the spread.  IG Markets Forex Direct account has the lowest raw spreads as it uses Direct Access (DMA) for execution, similar to ECN spreads. The narrower spreads that direct access offer can mean greater savings, however, one does need to consider the commission charges that apply.  It is also worth noting that Forex Direct is only available as professional accounts and not retail investor accounts.

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‘Your capital is at risk.’

Holding Fees (AKA Overnight or Swap Fees)

With Plus500 you can calculate the swap fee using following formula ‘Trade size x Opening Rate x Daily Overnight Funding % ‘. The ‘overnight funding time’ and the ‘daily overnight funding percentage’ when you click on ‘detail’ for the trading instrument on your platform.

With IG Market charge an admin fee of 0.3% per annum as part of their holding costs. You can calculate the overnight fee with the formula ‘Trade Size x (tom-next rate + admin fee). The tom-next rate can be found on the platform for the instrument you are using.

No Trading Fees

Plus500 charge the following:

Inactivity fee:

Funding Charges

The withdrawal process may take between 1-3 days business days, proceeding through various security checks and so on. Receipt of payment will be dependent on the payment method and the 3rd party incorporated.

It is worth noting that there is a minimum $450 deposit when using debit, credit or PayPal for IG Markets.  There are no minimum amounts for other transfer methods.

Risk Management

Guaranteed Stop Loss Order (GSLO)

Spreads are slightly wider when purchasing a ‘Guaranteed Stop Loss Order’. However, the wider spread might be worthwhile if you lack trading experience or the forex markets are experiencing volatility and therefore high risk levels. How wide the spread is will vary depending on liquidity provides volatility and other factors that implement the forex market.

Account Features

Plus500 Account Features

Originally, Plus500 only offered a standard retail investor account. Yet, now they allow high volume traders to upgrade to pro or VIP accounts. The main thing to note with Plus500 is they do not allow expert advisers or algorithmic trading. This means if you are a day trader then Plus500 may not be a suitable broker.

IG Markets Account Features

IG Markets offer two types of accounts. These are “Limited Risk” and “Plus/Trader” accounts for retail traders. Additionally, they offer an account for frequent, high volume professional traders.

The ‘Limited Risk’ account requires that you purchase a Guaranteed Stop Loss Order when opening a position. As you need to purchase a Guaranteed Stop Loss Order, you cannot use other types of stops such as trailing stops.

On the other hand, Plus/Trader or Standard Accounts differ from Limited Risk Accounts in that there is no requirement to purchase a ‘Guaranteed Stop Loss Order’ and use all available risk management tools.

Professional or institutional traders have access to a forex direct account, providing access to an ECN-style trading environment created by top-tier liquidity providers. This means they can access forex trading using Direct Market Access (DMA). To use the professional account you must have nets assets of at least AUD$2.5 million.

Conclusion – Plus500 vs IG Markets

We recommend Plus500 as they offer narrower spreads when compared to IG Markets. While IG Markets offer ‘Direct Forex Accounts’ that provide ECN-like spreads, the account is not available to most retail clients.

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Platforms

Plus500 Trading Platform

Plus500 has its own custom trading platform – Plus500 Trading Platform. The platform is available as a desktop platform for Mac and Windows, iOS and Android apps, as well as via web browsers. One unique feature is that you can access the platform via your Apple watch. Plus500 does not offer popular platforms like MetaTrader 4, Metatrader 5 and cTrader, instead traders are restricted to the brokers proprietary platform. Plus500’s trading platform is unique as it works across different desktops, laptops, mobiles and tablets seamlessly. This means you can easily use the Plus500 trading platform with different Windows, Android, iOS and Mac devices.

The Plus500 trading platform is known for being user-friendly with an intuitive interface.  The trading platform allows you to see prices from a wide range of derivatives including forex, commodities and indices all at once in a single screen. Other features include useful information such as open positions, pending orders and trading history.  Due to Plus500 trading platform being spilt into four section, a single screen can display a significant amount of information. One section shows the prices of currency pairs and is used to make trade orders, while another shows movements of currency pairs in a chart and indications of likely future price directions, while the third section shows account information such as the funds you have in your account and profit and loss information.

One really useful feature is the ability to easily switch between the live account and the demo account. This means you can test trading strategies ‘on the go’ before putting them to practice. As CFDs are complex instructions, the ability to simulate trading strategies prior to employing them in the marketplace is an excellent risk management tool. Using demo accounts to practise strategies can reduce the potential to lose money when trading CFDs.

IG Markets Trading Platforms

IG Markets offers one of the largest selection of trading platforms among all online brokers. Below is a chart showing the range of platforms IG Markets offer along with the features available.

When selecting a platform with IG Markets, the most important thing to be aware of is that you select a platform that will work with your chosen method of trading execution. For example, if you intend to trade forex in an ECN-like environment with Direct Market Access (DMA), then you will need to use L2 Dealer.  If you want to utilise algorithmic trading features such as Expert Advisors for automatic trading, then you will use either MetaTrader 4 or RealLivePro, with our recommendation being MetaTrader 4. MT4 is a proven platform used by more brokers and traders than any other platform in the world. MetaTrader 4 offers great execution speeds, expert advisers and a customisable interface. As a bonus, IG also includes 18 additional bespoke tools with MetaTrader 4. These bespoke tools give you access to more information, charts and management tools than usually available on MetaTrader 4.

Conclusion –  Plus500 vs IG Markets

IG Markets offer a greater choice of platforms when compared to Plus500. Most people only require one platform to trade with so it comes down to personal requirements and preferences when selecting a platform.

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Leverage

Both brokers offer low leverage by industry standards. While most brokers offer leverage up to 500:1, Plus500 maximum leverage is limited to 300:1 with IG Markets offering 200:1.  As CFDs are complex instruments that come with a high risk of losing money, modest leverage should not be an issue for most traders.

Conclusion – Plus500 vs IG Markets

Plus500 offers higher leverage margins when compared to IG Markets. There is no advantage to select IG Markets when it comes to leverage and margins as you can reduce your leverage with Plus500 if you wish to trade with lower margins.

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Risk Management

Both Plus500 and IG Markets are some of the better brokers when it comes to risk management tools. In particular, IG Markets offer comprehensive risk management resources to reduce to risk of losing money when trading CFDs.

Here is a list of tools each broker offer:

In addition to basic risk management tools such as price alerts and stop losses, both brokers offer Guaranteed Stop Loss Orders (GSLO). A GSLO can help reduce the risk of a major loss as CFDs are complex instruments that carry high risk. For a small fee (that is part of the spread) the brokers guarantee they will sell your investment at your set limit.

Both brokers allow users to set their leverage up to the maximum offers. However, the leverage you set with Plus500 will depend on your ‘Total Position Value’ and ‘Equity’. These values will depend on how much you have the funding you have in your account.

IG Markets also offer excellent risk management educational resources. This not only teaches you how to trade responsibility, but also how to protect all your investments.

Conclusion – Plus500 vs IG Markets

Both brokers offer ‘guaranteed negative balance protection’ which many brokers do not offer and it is for this reason both brokers are worth considering when choosing a broker. IG Markets, however, do offer a greater range of risk management features and you may consider some of these features useful if you are a risk-averse trader.

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Contracts for Difference (CFDs)

Plus500 CFDs

A wide range of instruments and derivatives are available with Plus 500 via its trading platform. These include:

1. Indices: Popular Indices around the world including the USA 500, US-TECH 100 and France 40, with leverage.
2. Commodities: All the main popular commodities including oil, gold, gas and copper.
3. Cryptocurrencies: including BitCoin, Ethereum, LiteCoin.
4. Shares: Australian and International Shares.
5. Options – Major Indices such as Hong Kong 50 and UK 100, plus well-known brands such as Apple, Facebook, Alphabet (Google).
6. ETFs – Over 80 Exchange-Traded Funds and products.

Plus500 offers one of the widest range of cryptocurrencies on the market. Not only do they offer the common cryptocurrencies like BitCoin, but they also offer rarely offered cryptos such as Tron, Cardana, EOS and Monero.

IG Markets CFDs

If you have an IG Markets account then you not only get exposure to forex markets but also a wide range of other markets and asset classes. IG is one of the best brokers when it comes to product range.

The following are available

1. Shares: Australian and international shares.
2. Indices: Over 31 global Indices.
3. Commodities: Over 26 primary hard and soft commodity markets.
4. Options: Available with Indices, Shares and Forex.
5. Interest Rates: Trading is available on global interest rate movements.
6. Bonds: The ability to hedge against government bonds.
7. ETPs, ETFs and IPOs – you can access Exchange-Traded Funds and Products, as well as Initial Public Offerings.
8. Cryptocurrency – a range of cryptocurrencies are available for investment.

Some trading platforms work better with certain CFDs so make sure you select the right platform for your needs.

Conclusion – Plus500 vs IG Markets

Both Plus500 and IG Markets offer an extensive range of derivatives or contracts for difference. IG Markets is slightly more extensive with the ability to trade against interest rate movements and IPOs, but Plus500 are likely to also offer any derivatives you may wish to trade with.

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Bonus Offers

Plus500 will reward you with a bonus for signing on with them. The more you deposit when you sign up, the larger your sign-on bonus will be.

Although IG Markets do not offer a sign-on bonus, they do have a refer a friend program. With this program, you and your friend will receive trading credits for each friend that you introduce to IG.

Conclusion – Plus500 vs IG Markets.

We like the sign-on program that Plus500 offer. Receiving a bonus simply for signing up and making a deposit is a sweetener that no one complains about.

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Customer Service

Plus500 Customer Service

You can contact Plus500 customer service 24/7 via live chat and email. Unfortunately, Plus500 does not provide phone support, but our team has had no real issues with the customer support provided. We put their customer service to the test and found there were able to answer all our questions quickly and reliably.

Plus500 does offer education features, with numerous Trader’s Guides available to customers on the main website, in line with industry standards.

Plus500 offers one of the better demo accounts among online forex brokers. This is because Plus500 does not provide a time or fund limits with their demo account. It is common for demo accounts to have a limit of 30 days and a restriction on available virtual funds. With Plus500, when your account drops to $200, then it will automatically return to the initial demo amount.

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IG Markets Customer Service

Unlike Plus500 which provide 24/7 customer support, IG only provides customer support from Saturday 1 pm to Saturday 9 am. However, IG Markets have a greater range of contact methods including email, live chat, phone and even twitter support.

IG also provides an excellent range of self-service tools which should allow you to find answers to your questions without the need for customer support. Tools include forums, FAQ, a glossary and user guides.

Lastly, IG provides solid education features. IG Markets education suite is part of their ‘IG Academy’. It is a comprehensive library of educational resources and consists of nine trading courses for both forex and CFDs. You have a choice of different delivery methods including webinars and mobile apps.

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Deposits and Withdrawals

Plus500 have a policy of no fees when making deposits or withdrawals. The broker advises that users may sometime incur a fee from the payment issuer or merchant. Payment can be made using Debit Card, Credit Card (Visa and MasterCard), MoneyBookers, Skrill, PayPal or via wire transfer.  Funding must come from accounts in your name, meaning you cannot use company or friends accounts. Plus500 have a minimum deposit of $100.

Withdrawals with traditional methods like bank transfer and cards will take one to three business days to complete, yet will vary depending on the type of withdrawal. PayPal and Skrill withdrawals will take three to seven business days. When making a withdrawal there is a withdrawal minimum of $100.

Unlike Plus500, IG Markets do charge funding fees. Use of credit cards will incur a 1% charge for visa and a 0.5% charge for MasterCard, while PayPal incurs a 1% fee. Debit Cards (Visa and MasterCard), Bank Transfer and BPay are free. If you are depositing funds using debit or credit card or PayPal there is a minimum of $500.

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