Understanding Leverage on Plus500

Leverage is one of the most powerful — and risky — tools available to traders. On Plus500, it allows you to control a larger position in the market with a relatively small amount of money. But while leverage can boost profits, it can also magnify losses just as quickly.

Whether you’re a complete beginner or a trader with some experience, understanding how leverage works on Plus500 is essential. This guide breaks it down clearly, with real-world examples, regional differences, and practical risk management tips.

What Is Leverage on Plus500?

Leverage on Plus500 is primarily used in CFD (Contract for Difference) trading. It allows you to open positions that are much larger than your account balance. For example, if you’re trading with 1:30 leverage, you can control $3,000 in the market with just $100 of your own funds.

It’s like using a loan from the broker to amplify your trading power — but you’re still responsible for any losses that occur.

How Leverage Works in CFD vs Invest Accounts

CFD Accounts (Where Leverage Is Applied)

Plus500 specializes in CFD trading, which includes leveraged products for:

• Forex
• Indices
• Commodities
• Shares
• Cryptocurrencies

The amount of leverage available depends on the asset. Here are some common examples under ESMA rules for retail traders in Europe and the UK:

• Forex: 1:30
• Indices: 1:20
• Commodities: 1:10
• Shares: 1:5
• Cryptocurrencies: 1:2

So if you trade a stock CFD with 1:5 leverage and invest $200 of your money, you’re controlling a $1,000 position.

Real-world users on Reddit and trading forums often mention the flexibility this gives them to open multiple trades — but many also caution that it’s easy to overexpose your account if you don’t manage risk properly.

Invest Accounts (No Leverage)

Plus500 also offers Invest accounts, which let you buy real shares without leverage. Here, you must pay the full value of the asset upfront. While this limits profit potential compared to leveraged CFDs, it also removes the risk of margin calls and rapid liquidation.

This type of account is more popular among long-term investors who prefer owning assets outright without added complexity. It’s great for building a slower, more stable portfolio.

Global and Regional Leverage Differences

Leverage availability isn’t the same everywhere. Depending on your country and regulatory environment, the amount of leverage you can access may vary.

Europe and UK (ESMA Regulation)

If you’re in the EU or UK, you’re limited to ESMA-mandated leverage caps for retail clients:

• Forex: 1:30
• Commodities: 1:10
• Shares: 1:5
• Crypto: 1:2

These rules are designed to protect retail traders from excessive risk. Some users have noted this can feel restrictive — especially in fast-moving markets — but it also reduces the chance of blowing up an account too quickly.

Non-EU Countries (Higher Leverage)

Outside the EU and UK, traders may have access to much higher leverage, sometimes up to 1:300 or more, depending on local laws and whether you qualify as a professional client.

Real users in regions like Asia, Latin America, and Africa report being able to trade with significantly higher exposure. But many also mention that this comes with increased volatility and a higher risk of loss, especially during market spikes.

If you’re outside a regulated region, it’s even more important to use tight risk controls.

A Quick Example: Leverage in Action

Let’s say you’re using 1:20 leverage to trade oil CFDs on Plus500. You invest $100 of your capital.

• With 1:20 leverage, you control a $2,000 position.
• If the price of oil rises 2%, your profit = $40 (a 40% return on your original $100).
• If the price of oil drops 2%, your loss = $40 (again, 40% of your investment).

This works both ways. A small price move in the market leads to a much larger change in your balance — that’s why risk management matters so much.

Risk Management Tips: How to Stay Safe with Leverage

Using leverage can be exciting, but without the right strategies, it can quickly lead to major losses. Here’s how to protect yourself while still making the most of leverage on Plus500:

Use Stop-Loss and Take-Profit Orders

A stop-loss helps limit your losses, while a take-profit locks in your gains automatically. Think of it as setting clear boundaries for your trade before emotions take over.

Example: You open a leveraged position on EUR/USD. You set a stop-loss 50 pips below your entry and a take-profit 100 pips above. Even if you’re away from your screen, the trade will close once either point is reached.

Keep Your Position Size Small

Just because you have access to high leverage doesn’t mean you should use all of it. Many experienced traders risk no more than 1–2% of their total balance on a single trade.

Real-world insight: Traders on Reddit often say they learned the hard way—overleveraging one trade can wipe out their account in minutes. Starting small and scaling up over time is a safer approach.

Maintain a Healthy Margin Level

Your margin level is the buffer between your open trades and your account balance. If your available margin drops too low, Plus500 will automatically close positions to protect against deeper losses.

Tip: Always keep a portion of your funds untouched in your account. This buffer reduces the chance of forced liquidation due to a temporary price move.

Avoid Trading Volatile Assets with High Leverage

Instruments like cryptocurrencies or small-cap stocks can swing wildly in minutes. Using high leverage on these assets increases the chance of getting stopped out or liquidated on a single spike.

Start with lower-leverage trades on more stable instruments, such as major forex pairs or indices, especially if you’re still learning.

Use a Demo Account to Practice

If you’re new to leverage, start with Plus500’s free demo account. You can test out position sizes, stop-loss settings, and different markets without risking real money. It’s a great way to learn how leverage behaves during live market conditions.

Final Thoughts

Leverage on Plus500 can be a helpful tool — but only when used with care. For short-term CFD traders, it offers the ability to control large positions with small capital. For long-term investors, the Invest account gives a safer path without the risks of leverage.

No matter your trading style or experience level, the key is this: know your limits, use stop-losses, and never risk more than you can afford to lose. By understanding how leverage works and using it responsibly, you can trade with more confidence — and avoid painful surprises.

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FAQs

1. Can I reduce the leverage on my trades on Plus500? Not manually. Plus500 sets leverage based on your account type and the instrument you’re trading. However, you can effectively reduce your exposure by trading smaller position sizes.

2. How do I know how much leverage is applied to my trade? Each instrument on Plus500 shows the applicable leverage in the asset info section. You’ll also see margin requirements when placing a trade. For example, a 20:1 leverage means you need to deposit 5% of the total trade value.

3. Can I lose more money than I deposit? No. Thanks to negative balance protection, your account cannot fall below zero. However, that doesn’t mean losses can’t be significant, especially if you don’t manage risk carefully.

4. Why is leverage different depending on where I live? Leverage is regulated by financial authorities. In the EU and UK, leverage is capped by ESMA to protect retail traders. In other regions, traders may be offered higher leverage based on local rules and whether you qualify as a professional client.

5. What is margin level, and why does it matter? Your margin level is a percentage that shows how much of your funds are being used to support open positions. If your margin level drops too low, Plus500 may close trades automatically. Maintaining a healthy margin is key to avoiding forced closures.

6. Is leverage always bad for new traders? Not necessarily, but it must be used cautiously. Many beginners get drawn in by the promise of fast profits and ignore risk. With proper education, small trades, and stop-losses, even new traders can use leverage safely.

7. What happens during overnight trading or big news events? Leverage can magnify sudden price movements, especially during economic reports, earnings releases, or overnight gaps. It’s wise to reduce your exposure or use tighter stop-losses during these times.

8. Can I combine leverage with hedging strategies on Plus500? Plus500 doesn’t offer traditional hedging tools like some platforms, but you can open opposite positions (e.g., long EUR/USD and short GBP/USD) to reduce exposure if used thoughtfully.