Plus500 vs Spread Co

Plus500 or Spread Co?

A wide range of instruments or offers Hedging?

If you’re a trader looking for a broker that offers a wide variety of instruments to trade, Plus500 is likely the better option out of these brokers. However, if you want a broker that offers hedging as a trading strategy, Spread Co may be more suitable.

*Plus500 spreads & fees data: Refer to the Plus500 website for the most updated spread amounts
*Plus500 does not offer Spot Forex.
*Plus500 offers Negative balance protection according to the EU regulations

Which broker is more reliable?

You can determine a broker’s reliability & trustworthiness by looking at eight factors:

• Who are they regulated by?
• How long have they been around for?
• Do they hold your money in a separate bank account?
• Do they use reputable “tier-1” banks like Barclays, Goldman Sachs or HSBC?
• Have they been fined or penalised in the last five years?
• The popularity of their service/website
• Are they publicly listed?
• Where are they located?

Based on these eight factors, we consider Plus500 to be the more reliable broker. We’ve broken down why below:

Who are they regulated by?

Plus500 is regulated by Financial Conduct Authority (FRN 509909) and Cyprus Securities and Exchange Commission (License No. 250/14). Plus500AU Pty Ltd (ACN 153301681), licensed by: ASIC in Australia, AFSL #417727, FMA in New Zealand, FSP #486026; Authorised Financial Services Provider in South Africa, FSP #47546, while Spread Co is regulated by Financial Conduct Authority.

AvaTrade are regulated by Central Bank of Ireland, ASIC, IIROC, FSA, FSB, UAE and BVI

How long have they been around for?

If a broker has been around for a long period of time, they’re likely to be more reliable (in comparison, most scam brokers only exist for several years before they disappear).

This also suggests that a broker has good risk management processes that have prevented them being caught out by major financial events, as was the case with Alpari UK going bust when they were there was a policy reversal of capping the Swiss Franc against the Euro.

Plus500 has been around for 14 years, while Spread Co have been around for 17 years. Our third alternative broker, AvaTrade, have been around for 16 years.

Do they hold your money in a separate bank account?

You wouldn’t want your broker paying their staff out of the same bank account account that you’re depositing your trading funds into, would you?

Fortunately, all regulated brokers must use segregated bank accounts to hold client money. This is one of the reasons why we only feature regulated brokers here on BrokerNotes.

All three brokers above will hold your money in a separate bank account.

Do they use reputable “tier-1” banks like Barclays, Goldman Sachs or HSBC?

Most tier-1 banks like Barclays and HSBC have been around for over 100 years and manage trillions of dollars of assets, proving that they have stood the test of time.

Plus500 does not use tier one banks as their banking partner. Spread Co uses tier one banks as their banking partner.

Have they been fined or penalised in the last five years?

If a broker has been penalised by a regulator in the past five years, it may mean that they were caught doing something they shouldn’t be doing - which may be of concern to you as an end client.

We’re not aware of any penalties or fines imposed by regulators on Plus500 or Spread Co in the past five years.

How popular is their service/website?

While not always the case, the number of traders a broker has can be a good metric for understanding how reputable a brokers is.

According to their websites, Plus500 is more popular with over 300,000 traders, while Spread Co is used by 5,000 traders. AvaTrade, in comparison, is used by 200,000.

Are they publicly listed?

Companies that are publicly listed on a stock exchange tend to be considered more reputable as they will be required to disclose their financials, and aspects of their operations, to the public.

Plus500 is a publicly listed company, while on the other hand Spread Co is still a privately owned company.

Where are they located?

Most reputable brokers tend to be headquartered in a major capital city or a financial hub such as Cyprus.

Plus500 are based in Haifa, Israel, while Spread Co are based in London, UK .

Do they offer the features you need?

Assuming the brokers you’re choosing between are reputable, the next point to consider is whether they offer all of the features you require to trade.

This can be broken down into three categories:

• Services & instruments
• Platforms & account types
• Trading features, risk management tools & funding methods

Services and Instruments

If you’re looking to trade currency pairs, both Plus500 and Spread Co offer forex trading. Plus500 have a slightly larger variety of currency pairs with 61 pairs, compared to 40 offered by Spread Co. Also, if you’re looking to trade cryptocurrencies, Plus500 offers a handful of cryptocurrency CFDs to trade, including Bitcoin, Ethereum and Ripple.

Both Plus500 and Spread Co allow you to trade commodities like gold, silver and crude oil.

Platforms & Account Types

In addition to the platform, you’ll also want to ensure that the broker you choose offers the account type best suited to your needs. AvaTrade, for example, offer a mini account, standard account and VIP account.

Trading features, risk management tools & funding methods

If you have a certain trading style (e.g. scalping, hedging, or using EAs), you’ll want to double check that the broker you choose allows this, as not all of them do.

While Spread Co does not allow scalping but does allow hedging. You can't trade EAs (expert advisors) with either Plus500 or Spread Co.

In terms of risk management tools, Plus500 does offer negative balance protection to prevent you owing your broker more than you’ve deposited, but Spread Co doesn't offer this.

Plus500 also offer stop losses, limit orders, and price alerts to help you automate aspects of your trading strategy.

Plus500 accept Paypal while Spread Co accept Skrill.

Are they affordable for what you need?

Comparing the fee structures of different brokers can be a minefield at times. The important thing to consider is what the spreads & fees are on the specific instruments and account type that you will be using.

For trading EUR/USD, Plus500 charges 0.60 points, while Spread Co charges points. Therefore, Spread Co is the more affordable for this instrument. If you want to compare their spreads across more instruments, You can jump back up to our comparison of their currency pair & indice spreads above.

Another consideration is whether or not your broker charges inactivity, deposit/withdrawal fees, or commissions on trades. If you’re a frequent trader, inactivity fees are unlikely to be an issue.

The Verdict: Plus500 or Spread Co?

There’s no such thing as a perfect broker, but some are going to be a better fit for you than others.

Objectively, Plus500 is more reliable based on our criteria above. Plus500 has a wider range of instruments to trade. Plus500 offer lower spreads on popular forex instruments like EUR/USD and are used by more traders.

Both brokers offer demo accounts, allowing you to test their platforms to see which is suitable for you. You can test drive their demos using the links below:

• Try Plus500’s demo account (72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.)
• Try Spread Co’s demo account (61.8% of retail investor accounts lose money when trading CFDs with this provider)
• Try AvaTrade’s demo account (71% of retail investor accounts lose money when trading CFDs with this provider.)

Finally, if you’re really not sure you can always use our free tool (takes 15 seconds) that will help you find a suitable broker based on your precise requirements here.