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Trading Contracts for Difference (CFDs) online is a very sophisticated form of financial exchange that requires a lot of preparation and forethought. Besides knowledge and experience, traders also need to invest some time into finding the brokerage of their liking.
While there are many trustworthy brokers on the market, all of them are different in one way or another: some focus more on trading terms and conditions, whereas the others offer more exclusive features like social trading.
In the following article, we’re going to compare eToro vs Plus500 – some of the most well-known brokerage companies on the market right now.
A brief roundup
Before we jump into the in-depth comparison between the two brokers, let’s have a quick roundup of their main advantages. eToro is a famous broker that offers complex social trading and investment platforms. With its CopyTrader, you can see other people’s trades, observe their decisions, and integrate their ideas into your own positions.
eToro offers quite an extensive package of instruments; it includes stocks, cryptocurrencies, currency pairs, etc. Trading terms and conditions for these assets are also quite decent: the maximum leverage goes up to 1:100, whereas the minimum spreads for the EUR/USD pair start from 3 pips.
When it comes to Plus500, you can see that the broker targets day traders with its low-commission and highly-leveraged platform. The maximum leverage at Plus500 goes up to 1:30 and spreads start from 0.6 pip.
As for the safety of these brokers, we can pretty easily say that both of them are properly regulated and full of fund protection mechanisms. If we compare eToro and Plus500, the former will have fewer licensing materials than the later, yet both of them feature the UK’s FCA and Cyprus’ CySEC licenses, not to mention fund insurance and negative balance protection mechanisms. In fact, why don’t we start our in-depth review with this section?
*Plus500 disclaimer: 76.4% 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.
Platform safety
The safety of funds is the single most important aspect that any broker should perfect on their platforms. It doesn’t matter how fancy their trading terms and conditions or additional features are; if they don’t protect their clients’ funds, they don’t deserve the people’s trust.
With eToro, you can be sure that the money you deposit will be tightly-secured at the platform. That is guaranteed by a double regulatory net that includes the licenses from:
- Financial Conduct Authority (FCA) of the UK
- Cyprus Securities and Exchange Commission (CySEC)
As you can see, both of the licenses originate from the EU, which ensures that all of the financial regulations that function in the area will have you covered. And whether you’re choosing eToro or Plus500, you’re not compromising on security as Plus500 also features quite an extensive array of licenses:
- Plus500UK Ltd authorized & regulated by the FCA (#509909).
- Plus500CY Ltd authorized & regulated by CySEC (#250/14).
- Plus500SG Pte Ltd, licensed by the MAS (#CMS100648-1) and IE Singapore (#PLUS/CBL/2018).
- Plus500SEY Ltd is authorised and regulated by the Seychelles Financial Services Authority (Licence No. SD039).
- 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.
You do not own or have any rights to the underlying assets. Please refer to the Disclosure documents available on the website.
As you can see, there are even more regulatory materials at Plus500 than at eToro, however, the result for both of the brokers remains the same: you invest your money into a platform that cannot even dare to think about scamming you. Both eToro and Plus500 feature negative balance protection, as well as the insurance of funds – up to 85,000 GBP for Plus500 and up to 50,000 GBP for eToro.
Comparison between eToro vs Plus500 trading offerings
Next up, let’s talk about the trading terms and conditions and find out, whether Plus500 is better than eToro. First, let’s see which assets you can trade or invest in with these brokers. At eToro, you can trade stocks, cryptocurrencies, commodities, indices, currencies, and ETFs; at Plus500, you can trade CFD’s on currencies, commodities, options, indices, stocks, cryptocurrencies, and ETFs.
Now, even though both of these platforms offer a multitude of tradable assets, it is important to note that eToro focuses more on long-term investments and social trading features rather than high-end trading conditions. Conversely, Plus500 offers conditions that are much more beneficial for short-term traders, also known as day traders.
At eToro, the maximum leverage you can get is 1:100. What’s interesting to note here is that the broker has actually reduced the leverage ratio back in 2015, in compliance with the FCA regulations. Yet it still doesn’t mean that 1:100 leverage won’t help you get larger profits. But in the eToro vs Plus500 comparison, this number is still pretty low when you see Plus500’s 1:30 leverage offering.
As for the platform commissions, both eToro and Plus500 majorly capitalize on bid/ask spreads. With eToro, the minimum spread for EUR/USD currency pair goes as low as 3 pip, whereas the spreads for the S&P index and Bitcoin are 75 pips and 1.5% per side respectively. On 18.08.2020 at 9:11 CET, spreads were significantly lower at Plus500, with EUR/USD pair at 0.6 pip, S&P index 50 pips, and Bitcoin 0.85% per side.
As you can see, Plus500 definitely has more lucrative terms and conditions than eToro. And that is quite understandable, considering the fact that the latter is heavily focused on long-term investments and social trading features.
Trading platforms
Next up, let’s do a thorough comparison of the trading platforms of eToro and Plus500 side by side. One big similarity between the two brokers is that both of them offer their own proprietary platforms with quite unique features. With eToro’s web-based trading platform, you can get the following trading specs:
- Stop-loss, take-profit, and trailing stop orders
- Professional charts
- Offline trading
- One-click trading
- And, of course, the famous social trading
Then there are Plus500’s proprietary platforms that support both desktop and web platforms. They offer:
- 4+ order types
- Guaranteed stop
- 2,000+ financial instruments
- Price alerts
What’s more, both eToro’s and Plus500’s trading platforms are fully-accessible to iOS and Android devices. This means that wherever you go, as long as you have a network connection, you can do trades and investments with both of these brokers.
Research and educational tools
Moving on, the next discussion topic of our comparison is going to be the research section. If you try to distinguish between eToro or Plus500 who is better, this is probably going to be the biggest contributor to your assessment. On the one hand, there is eToro with quite extensive research tools and features. First off, the broker features a killer social trading platform called CopyTrader. With its help, you can copy other people’s trades, their ideas, and integrate them within your trades.
In addition, you can also get market news from trusted sources such as Tipranks, as well as daily analysis delivered to you via email. Unfortunately, Plus500 doesn’t offer as extensive research platform as eToro. It only features technical indicators (which are also available at eToro), several trading signals, and an economic calendar.
And when it comes to education, the differences between eToro and Plus500 are less visible. Neither of the brokers has complex educational platforms that would make you a trading phenomenon; they feature a certain number of educational videos and allow you to create a demo account, which is one of the best gateways to a better trading career.
Is eToro better than Plus500? – The final verdict
In the following comparison between eToro vs Plus500, we have set these two famous brokerages against one another. First, we compared the two broker’s licenses. While Plus500 features a lot more licenses than eToro, it is safe to say that both companies are quite trustworthy as both of them feature European licenses, as well as comprehensive fund protection mechanisms.
Then we reviewed the actual trading terms and conditions of the two brokers. We have determined that with its special social trading feature and relatively modest trading offerings, eToro is much more focused on long-term investors that aren’t as focused on high-leverage and low-spread conditions. With Plus500, that’s exactly the opposite of what we’ve seen: leverage up to 1:30 and tight fixed and variable spreads, starting from 0.6 pips.
After that, we moved on to the trading platform comparison and found out that both of the brokers feature their own pieces of software with quite impressive offerings. In short, we can say that both eToro and Plus500 are very high-tier trading brokerages that are best on their niche markets.
*Plus500 disclaimer: 76.4% 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.
