CFD broker Plus500 does not offer spread betting. It only offers CFDs (contracts for difference). So why does the nation’s financial media get it wrong all the time?
There are some fairly significant differences between financial spread betting and CFDs. I’m not going to go into them here, but you can watch our video discussion on CFDs Vs Spread betting or, read one of the many articles we discuss the pros and cons of each type of online trading.
I don’t know why Plus500 don’t offer spread betting; it’s one question that I’d like to ask the CEO when we get to interview them. After all, we’ve interviewed the CEOs of most of the major CFD brokers, but for some reason, Plus500 never want to talk to us about anything. Maybe that says all you need to know. If you want to see what actual spread betting brokers think, you can read our interviews here:
- IG – June Felix Interview
- CMC – Peter Cruddas Interview
- Pepperstone – Tamas Szabo Interview
- Spreadex – Jonathan Hufford Interview
- ETX Capital – Phil Adler Interview
We have a comparison table of UK-regulated spread betting brokers here.
But the reasons Plus500 don’t offer spread betting is probably because the spread betting market in the UK is utterly saturated and has been for some time. There are around 100,000 to 120,000 spread betting traders in the UK that would generate revenue for spread betting brokers. Which is not a lot.
There are of course millions of traders, but many are so small that to a broker that doesn’t profit entirely from the B-book, probably not worth going after.
Spread betting is unique to the UK because there is no tax on profitsΒ (see why spread betting is tax-free here – it’s quite a funny story).
CFDs can be offered globally. So it makes sense that Plus 500, which is a pretty basic broker doesn’t complicate their offered by segregating spread betting and CFD traders.
Also, I would say that as a basic broker Plus 500 won’t attract serious traders or large accounts, so the tax breaks that spread betting offers probably wouldn’t be a big enough draw to make it worth their while.
You can read our Plus500 review here and see what their customers have to say about trading with Plus500.
Even way back in 2017 when Plus500’s market cap first topped Β£1bn, the national press were getting it wrong.
Yes that’s right, back then little old Plus500 who was for years nipping at the heals of the industry became worth over Β£1bn.
The statement, which is somewhat representative of their brokerage services, offered nothing other than the bare essentials, read:
Plus500, a leading online service provider for retail customers to trade CFDs internationally, is pleased to announce that its business continues to trade strongly.Β Accordingly,Β the Board anticipates that revenues and profitsΒ for the year ending 31 December 2017 will be ahead ofΒ market expectations.
Further details will be announced in the Company’s scheduled third quarter trading update which will be issued on 31 October 2017.
You can see the RNS announcement released by the London Stock Exchange here.
Obviously this got a lot of press with most of the national paper saying that spread betting broker Plus 500 blah blah blah. It really gets my goat, Plus 500 are not a spread betting broker, never have been.
Especially as it’s from big news agencies such as ReutersΒ &Β City AM, who for some reason are unable to tell the difference between a CFD broker and a spread betting broker. Shame…
Examples of Plus 500 being called a spread betting broker
The list goes on endlessly if you look back through the archives, but as Plus500 released a trading update today, they have been in the press. here are some examples of Plus500 being called a spread betting broker when they are not:
- The FT: https://www.ft.com/content/11aa8695-8cef-497d-9485-7e1dffa44476
- The Times: https://www.thetimes.co.uk/article/plus-500-attracts-new-customers-vj28nx5rl
- Daily Mail: https://www.thisismoney.co.uk/money/markets/article-8398005/BUSINESS-LIVE-Car-dealer-Lookers-warns-suspected-fraud-Tesco-accounting-probe-ends.html
- Bloomberg: https://www.bloomberg.com/news/articles/2020-04-07/virus-driven-spread-bet-boom-drives-500-revenue-gain-at-plus500
- The Telegraph: https://www.telegraph.co.uk/investing/shares/investors-have-turned-spread-betting-works-risks/
You could potentially argue that Plus500 could be called a spread betting broker because they make money on the spread between the bid/offer, but they don’t really do that as pricing is so narrow these days. Plus500 make money taking the other side of clients’ trades (or not hedging them) and also charging a very high rate of interest on overnight positions.

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