Plus500 sees customer surge as lockdowns send financial traders home

[LONDON] Online trading platform Plus500 Ltd nearly doubled its customer base in the first quarter of 2020, driving a six-fold rise in revenue, as a market sell-off drove a boom in financial betting by retail traders locked down in their homes.

The company, one of the easy access mobile trading platforms which allow individual customers to make leveraged bets on financial markets from oil to currencies, said revenue for the quarter ended March 31 rose an astounding 487 per cent to US$316.6 million compared to a year earlier.

It attributed the surge in its number of active customers, to 194,024 from 97,921, to its strong offering and marketing algorithm, giving no indication of the type of individuals opening the accounts.

"This has been achieved as a result of significantly increased volatility across global financial markets, which has in turn driven higher levels of customer trading activity coupled with an increased rate of New Customer acquisition," Plus500 said.

Retail platforms, criticised for allowing ordinary individuals uneducated in financial engineering to make highly-leveraged and dangerous bets, have been reined in over the past three years and forced to institute more checks on customers' backgrounds.

Many professional traders with day jobs in the City run multiple personal accounts on Plus500 and rival platforms to make money outside of office hours but many amateur traders are also drawn to the industry's addictive mobile apps.

Rival CMC Markets last week flagged the growing popularity of its mobile app among traders working from home.

Plus500, which had already given upbeat forecast for the current year in March, repeated that full-year results are expected to be substantially ahead of current consensus.

Market volatility has surged in recent months, thereby boosting trading volumes, as investors scramble to exit their positions on fears over an expected recession in the world economy due to the coronavirus pandemic.

REUTERS