Plus500 Share Discussion Threads

[technovator] 02/11/2018 22:52

moneypenny, i have been too long working in this industry not to spot you! You are like clones !

IMHO short covering on my part will not be required.

[moneypenny2018] 02/11/2018 21:17

Why are you looking for a job ;)

Plus pays me with the fat dividends I ll be receiving as an imvestor while you’ll be running to cover your short.

[technovator] 02/11/2018 20:29

moneyPenny, how much do you get paid to promote Plus500?

[elcapital2018] 02/11/2018 19:00

down from 20 quid to 13...........

[rifleshot3] 02/11/2018 17:47

Money Penny or anyone... quick question given you have familiarity with Plus's Products...

Any sense of Plus's reliance/emphasis on currencies and other non equity related products? Read across from Saxo, it would be good to hear that the business is skewed towards equity trading. The VIX is perfect for longs at current levels, but it is a barometer of volatility in (U.S) Equities, not other financial instruments? It would be good to have a feel for how the volatility we are currently experiencing benefits Plus's core products?

[moneypenny2018] 02/11/2018 16:55

you wanted volatility here you go... Traders are all happy on Twitter. This was a one in 5 years opportunity for some because this correction was also technical...

Volatility is here to stay...

[dumbbunny] 02/11/2018 15:59

Blue meaning, those that like to trade (bet) on markets also like to bet on sport. July was the world cup. Day trading CFD punters were distracted during July, hence activity, volumes, and revenue were low, very low. They surged back in August despite ESMA.

It appears some people are confusing low Q3 trading opportunities, customer activity, and revenues as entirely a consequence of the introduction ESMA reduced leverage rules.

The industry trading data now being released for October appears to evidence that whilst ESMA has had an impact, it's not to the extent that those that misread Q3 suggest.

[elcapital2018] 02/11/2018 15:49

no doubt nothing about plus on that post either from rees4 aka rackers

[gettingrichslow] 02/11/2018 11:10

Moneypenny, I don't think ElCap goes in for a lot of maths, he adopts a 'guesswork' approach. US/China trade talks will really stir up some volatility over next few weeks I suspect. And a reasonable chance Italy could be about to trigger a major crisis in europe.

[bgw1970] 02/11/2018 10:33

Saxo October volumes up 25% on September, with equity volumes up 87%

[moneypenny2018] 02/11/2018 10:18

Feeling quite awake mate. Had my morning coffee and see JP have added, one other institutional client has added and the usual shake the tree is not working this morning either...

The shorts need to wake up... This is like going short a Wind Farm asset when the wind for this quarter and the ones to come (as markets are expecting more volatility going forward) is expected to be more then average... You go do the maths and I ll see you at Q4 announcement

[elcapital2018] 02/11/2018 10:02

idiots reading the liberum notes! wake up!

[jplus] 02/11/2018 08:34

No. It's about revenue. August was higher than July.

[burn248] 02/11/2018 08:32

JPMorgan look to have added!!!

[blue meaning] 02/11/2018 08:28

The liberum note presumably is commenting on volatility in August being higher than July? My post is about revenues. I’m not sure the higher volatility in August would directly translate into higher revenues in the same way as it did previously. The only real fact is that last time Quarterly revenues were at £100m the shares were at £8, the rest is still up for debate.

[moneypenny2018] 01/11/2018 23:08

Think I cover some of these in another post. Having gone through the process myself in September to opt for professional status as I opened account with them in August. Have been trading with IG previously.

1) you need to do a certain number of trades a year to qualify for professional status and either have sufficient personal wealth (I.e above [£100,000?]) or have traded similar products at a professional capacity (I.e finance or IB background etc)

For point 1) the critical question is how many clients are actually not able to convert to professional status based on above criteria (my expectation is small or at least much smalller then what people might think initially)

2) even if you remain a retail investor you can still trade with leverage by using options (they keep expanding the options being offered)... please don’t ignore this point. Options swing +- 50% a day and it’s the product that most investors use in the US market to trade anyway ... The spread they achieve from these products is super healthy... yes it takes time to adjust and find your way on how to get access to volatility at a low margin if you want to but you can. I know this from personal experience. To me it made no difference retail or professional... August and September is probably as not as low as people think. They offered two new products during that period (Argentinian pesei vs USD and Turkish Lira ve USD). Both had healthy spreads for Plus and both had super high volatility that even with small retail margin account you could trade big. The company has this operating flexibility and as I said previously traders are not drawn by products because they like the names but because they are volatile and and want to speculate. There will always be such opportunities for increased volatility. Let’s face is Plus500 clients are clients that want to speculate and want volatility...

3) Finaly those who are not able to switch to professional status, they really shouldn’t be given that leverage anyway... If 80% of retail lose money because of leverage then reducing the leverage to this type on client will make their trading more sustainable (and potentially can move into professional after some time). What use is there to have a retail client who can’t afford to trade with leverage and blow up his account in a few trades... it’s about quality of earrings for these type of clients which will yes generate initially less revenue (assuming they don’t use options) but then they will remain active clients for longer as their account will not be blown up.

I think ESMA is actually positive and I am surprised people don’t realise this. You kind give a bazooka to a guy that can’t handle a pistol... What this will do is reduce the % of retail clients that lose money. Because for these type of clients leverage is always been against them.

I am really not sure if my message comes across but I am very convinced about this because I understand the business and I have personally spend many years investing with these platforms.

[jplus] 01/11/2018 22:46

The number of confirmed at the end of H1 was 5% accounting for 20% of EAA rev. At end of Q3 it was 8% accounting for 38%. I would expect that number to rise again Q4, especially with high vol. compared to low vol. q3 encouraging people to make the effort to apply as conditions are more favourable for increased trading.

[74sjh] 01/11/2018 22:15

Thanks for the replies - very interesting. Perhaps 70m for July is a little optimistic on balance, but still questions remain relating to how much of the 100m revenue was pre and post Esma. And the link between Plus' performance and wider market volatility is not disregarded, but if retail need to have higher deposits to trade as they did previously, then I would expect them to trade less frequently regardless of the wider market volatility - they wouldn't have the margin for it. So the old links between the two must have been affected by Esma although the extent is still unclear? I also expect that whilst clients may elect to be professional, not all will be successful so perhaps number of confirmed professional clients would be more telling than just those who have merely applied?

[stuffee] 01/11/2018 21:36

Blue Meaning, interesting post and this view could certainly explain recent increased shorting.

However, I feel you (and maybe the bears) may have been far too pessimistic re ESMA effect. Plus has stated that ESMA restrictions only cover 30% of its business and it has also explained in presentations that not many of its clients representing this 30% ever traded at maximum leverage. Don't also forget that ESMA may eliminate many competitors who can't offer Plus' policy of protecting clients from negative balances.

I have learnt through following Plus (and its competitors) over last few years that volatility has far more critical effect on revenue and results. In its 23 Oct RNS, Plus stated that volatility in Q3 was low with Sept described as "very low". The chart of the VIX index (based on S&P Option prices) is highly relevant and consistent with Plus' statement; see ....

Q3 revenue at $100m was low, but I don't believe it earned anything like $70m in July and hence I guess August was far better than your suggestion of $15m. September was obviously poor.

I was encouraged by the thought that many bears may have too pessimistic view of the effect of ESMA and maybe not fully aware of the critical dependence on volatility, which could explain recent price weakness. I suggest their bearish interpretation is inconsistent with Plus' recent RNS..."Since the end of the quarter Plus500 has seen the return of higher volatility across asset classes, and consequently stronger trading."

My view anyway!