Do you add dividends? Dividends are the portion of corporate profits that are allocated to shareholders, and the cut-off date for share ownership in order to qualify for a dividend... more " /> Financial Instruments - Plus500 Review

Financial Instruments

Do you add dividends?

Dividends are the portion of corporate profits that are allocated to shareholders, and the cut-off date for share ownership in order to qualify for a dividend is known as ex-dividend date.If you have an equity CFD position open on the ex-dividend date, an adjustment will be made to your account in respect of the dividend or distribution attributable to the related instrument in the underlying market. If you hold a buy position you will receive the dividend as a positive adjustment to your account, however, if you hold a short (sell) position there will be a negative adjustment to your account for the dividend. Please note that voting rights are not acquired with equity CFDs.

Do you offer a Rollover Service?

Most of the instruments we offer, that are based on a futures contract, have a rollover date. You can find this information by clicking on the “Details” link on the main trading platform screen next to each instrument.Whenever a futures contract reaches its automatic rollover date as defined for the instrument, all open positions and Orders are automatically rolled-over to the next futures contract. In order to nullify the impact on the valuation of the open position, given the change in the underlying instrument’s rate (price) for the new contract period, a compensating adjustment is made to the account. Stop Orders and Limit Orders are also adjusted, to reflect the rate (price) of the instrument in the new contract. In other words, when a position is automatically rolled over from one contract period to the next period, an adjustment is made to your account to reflect the difference between the rate of the previous contract and the rate of the new contract. The value of your position continues to reflect the impact of market movement based on your original opening level. Accordingly, the adjustment is compensated for in the value of your open position. These actions complement each other, and ensure accurate profit/loss calculations for each contract period. For example, you have a Buy position on Cocoa for the amount of 20 contracts. The last Sell rate for Cocoa’s previous contract was 9.5, whilst the first Sell rate for the new contract is 10, this means that your open position is now valued $10 higher, ie: (10 – 9.5) x 20 = 10. An adjustment of $10 will be deducted from your account, ie: (9.5-10) X 20 = -10.

If the futures contract is not subjected to rollover, the position will close upon the expiry date set for the instrument, also available via the “Details” link. For more information about expiry of positions, please read: “What is an expiry date of an instrument?”

How do you determine the instruments’ rates (prices)?

Plus500 quotes prices with reference to the price of the relevant underlying financial instrument, and its spread. This price is obtained from a range of third party reference sources, various nominated independent financial market data providers, who, in turn source their price feeds from relevant exchanges.Plus500 offers dynamic spreads on several instruments.Please note that the prices for those instruments that are based on futures contracts, for example: commodities and indices, are derived from the price of the futures contract and not the price of the underlying instrument.

How do you handle corporate actions?

A corporate action is an event initiated by a public company that affects the shares/equities issued by the company. For example: rights issue, stock split, takeover, etc.As you do not own the physical share/equity you neither acquire voting rights, nor any rights under a rights issue or similar event such as stock split, etc. However, please note that when such an event occurs, we will always take measures to minimise the impact on your position(s) by applying a relevant adjustment to your trading account.

What can cause an instrument to be greyed out/unavailable?

Occasionally instruments are temporarily unavailable for trading when market events restrict price feeds, for example but not limited to: extreme volatility, illiquidity, underlying market suspensions, etc.

What is an expiry date of an instrument?

Instruments that are based on a futures contract either have an expiry date or a rollover date. You can find out which by clicking on the “Details” link on the main trading platform screen next to the instrument’s name. Whenever a futures contract reaches its expiry date, all open positions and Orders for that instrument are terminated, regardless of any associated Orders you may have set beforehand.

For more information on rollover dates, please read “Do you offer a Rollover service?”

What is a Spread?

The spread can be calculated by subtracting the sell price from the buy price of the instrument, and can change whilst your position is open. Plus500 is compensated for its services through the “market spread”. For example, when trading EUR/USD, if the buy rate is 1.3128 and the sell rate would be 1.3126, and the market spread would be 2 pips. While some instruments have a fixed spread, others have a dynamic spread, which is constantly adjusted according to the market spread.

Where do I find information regarding each instrument?

Useful instrument information can be found in the “Details” tab for each instrument on the trading platform. These details may change from time to time, therefore please ensure you verify the information before trading (any change will only affect new positions).

Which types of trading instruments do you offer?

Plus500 provides you with the opportunity to trade CFDs on the world’s most traded Shares as well as on Forex, Indices, Commodities, ETFs and Options.

  1. Shares – also known as stocks or equities, represent units into which a company’s capital is divided for investment and ownership purposes. When trading CFD Shares, you would enjoy all the benefits of having an interest in the price movement of the share, without having to physically own it. Plus500’s trading platform allows you to trade through CFDs the world’s most actively traded shares. For as little as the equivalent of 10% initial margin, you can gain up to 10 times leveraged exposure to the most actively traded shares listed on the world’s stock exchanges.
  2. Forex – is the foreign exchange market for trading currencies. When referring to CFD Forex trading, we refer to the exchange of one currency for another at an agreed exchange price. In order to conduct foreign trade and business, currencies need to be exchanged, therefore it is no surprise that the Forex market is the largest market in the world. At Plus500, you can trade CFDs on some of the world’s most popular FX (Forex) pairs. You can get up to 200 times leveraged exposure to the most actively traded FX pairs for as little as the equivalent of 0.5% initial margin.
  3. Indices – a stock index is a statistic that reflects the composite value of a group of stocks. The stocks listed within an index bear similar characteristics such as trading on the same stock exchange, being in the same industry, having comparable market capitalisations, etc. World leading indices are available for trading through CFDs at Plus500. For as little as the equivalent of 0.34% initial margin, you gain up to 294 times leveraged exposure to leading equity indices.
  4. Commodities – are hard assets ranging from wheat to gold to oil, and as there are so many, they are grouped together in three major categories: agriculture, energy and metals. Commodities are traded by dealers on an open exchange. That means that the prices change every day. Commodities futures are an agreement to buy or sell a commodity at a specific date in the future, at a specific price. Just like the price of bananas at the grocery store, the prices of commodities change on a weekly or even daily basis. The world’s key commodities are available for trading through CFDs at Plus500. You can gain up to 152 times leveraged exposure to the key commodities for as little as the equivalent of 0.66% initial margin.
  5. ETFs – (Exchange Traded Funds) – are funds that track indices and commodities like the NASDAQ-100 Index, S&P 500, Dow Jones, Gold etc. The ETF replicates the indices and the commodity markets’ performance. The ETF trades like a common stock and undergoes events such as stock splits and dividend distributions. At Plus500, you can trade through CFDs on some of the world’s most popular ETFs. For as little as the equivalent of 2% initial margin, you can gain up to 50 times leveraged exposure to these key ETFs.
  6. Options – are contracts through which a seller gives the buyer the right, but not the obligation, to buy or sell a specified number of units of the underlying asset at a predetermined price (“Strike Price”) within a set time period (by a stated expiry date). The buyer has an option to buy (“Call”) or sell (“Put”) the underlying asset . The factors that determine the price of an Option include, amongst others: the difference between the current price and the strike price. At Plus500, you can trade through CFDs Options on Indices at various strike prices that are the most relevant to the underlying index rate. You can gain up to 5 times leveraged exposure to these Options for as little as the equivalent of 20% initial margin.

Please note that the leverage and margin data provided above may variate depending on your country of residence.

Remember that CFDs are a leveraged product and can result in the loss of your entire capital. Trading CFDs may not be suitable for you. Please ensure you fully understand the risks involved.

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