# Plus500 fees

## Spreads & fees at Plus500 at a glance

If you have ever looked more closely at the costs that can be incurred with a Forex or CFD broker, you will certainly already have encountered the spread. This is the main cost factor you should expect to incur with any Forex broker. After all, it is the spread, i.e. the difference between the buy and sell price, with which the broker generally earns most of his income. However, it must also be said that this cost factor is certainly often overestimated to the extent that it is only a very small percentage of the total transaction amount. Depending on the currency pair, the spreads, converted into percentages, usually amount to only between 0.01 and 0.10 percent of the traded volume.

### The spread – explained briefly and simply

The spread is usually rarely given as a percentage, but rather in points or pips. Of course, we would like to explain the term “pips” in more detail as well. It is a digit after the decimal point, which depends on how many digits after the decimal point the price of a currency is quoted. Let’s take the currency pair Euro / US Dollar as an example: In this case, the rate is always quoted with four digits after the decimal point, for example 1.3250 dollars for one euro. In this case, the “0” as the fourth decimal place would be the basis for possible differences between buying and selling rates. For example, if the broker plus500 were to quote a buy price of \$1.3253, but the sell price was \$1.3250, this would be a difference of three pips. The fourth decimal place has therefore changed by three pips in so far as the broker pays out slightly less money than he receives when the trader buys a currency.

### The costs of the Broker plus500 at a glance

First of all, we would like to give you a brief overview of the costs that can be incurred by Broker plus500 in principle and, of course, will be charged in each case. You do not need to worry about any transaction or custody account fees, as they occur mainly with online brokers who offer trading in securities. These costs do not normally exist with Forex brokers like plus500. Instead, other fees are the main focus.

With broker plus500, we have noticed the following four types of costs, but they do not affect every trade and every client:

• Overnight fee / financing costs
• Inactivity fee

In the following we would like to go into these four possible cost types, which have to be considered with the Broker plus500, in more detail.

We do not need to go into the fee mentioned in the first place in our listing, namely the spread, after the previous remarks. If you would like to know in detail what spreads the broker calculates, you can easily find out the spread for each tradable underlying asset on his website. You can do this for the following financial products:

• Foreign exchange
• Raw materials
• Indices
• Shares

As the broker plus500 provides CFD trading in addition to forex trading, it is therefore advisable to call up the respective spreads for the values that come into question as trading instruments. In Forex trading, the spreads start as usual with two pips for the most frequently traded currency pair (Euro / US dollar).

A possible fee with Broker plus500 is the so-called overnight fee, or roll-over fee. Ultimately, this is the interest that the customer has to pay if he holds a position beyond the day. Usually this fee is added for short positions (short), while for long positions (long) the financing costs are subtracted from the account. Thus, the premium fee is ultimately the financing costs that every Forex broker charges his clients.

### Inactivity fee and costs for PayPal withdrawals

A special fee, which by far not every broker offers, is the inactivity fee. For this reason, we would like to go into this cost factor in detail, but it will only affect some of the broker’s customers. What is hidden behind this fee can easily be deduced from the name. In detail, plus500 charges a fee of up to ten dollars if the trader is inactive. This means that he will not log into his customer account or place an order for a longer period of time. Specifically, this is the case after three months at the latest, so that the customer must then pay the inactivity fee. The Broker justifies these costs for the customer with the fact that the inactivity fee serves to guarantee the service used. The inactivity fee can therefore basically be avoided relatively easily. The customer does not even have to trade actively, but it is sufficient if he logs into his trading account at certain intervals, for example every three weeks.

### How can costs be avoided?

At this point, we would of course not only like to explain to you what fees and costs you can expect from Broker plus500. We also understand good service to mean that we give you tips on how you can avoid the one or other fee. As you can see from the previous explanations, there are four possible types of costs that you can expect to incur with Broker plus500. Only one cost factor cannot be avoided in active trading, namely the spread. However, you can avoid all three other types of fees by following our tips.

1. You can avoid the financing costs (premium fee) by not holding a long position overnight. Of course, this will not always work, because it makes no sense to sell a loss-making position early just to save the financing costs.
2. The inactivity fee is relatively easy to avoid by simply logging into your trading account from time to time. This is already sufficient, because the broker does not require you to trade actively to avoid this fee.
3. You should not necessarily choose PayPal as the only foreign payment method that is subject to a fee. You can easily avoid these fees by choosing, for example, bank transfer or credit card payment.

### Conclusion on the costs

There are a total of four cost elements that can basically be incurred when trading via Broker plus500. Two of these cost factors are typical for almost every Forex and CFD broker, namely the spreads on the one hand and the financing costs on the other hand, which the broker plus500 calls premium fees. Two other cost factors, however, are somewhat unusual, namely the inactivity fee on the one hand, and the fees that are incurred when withdrawing funds via PayPal on the other. While the inactivity fees for traders who want to put their account at plus500 on hold for a certain period of time are not necessarily optimal, the fees for payouts via PayPal are not directly fees of the broker. Here the fees are charged by the payment provider. However, you can easily avoid both costs by logging into your trading account from time to time and choosing a different payout method than the PayPal electronic wallet.