Investment in Bitcoins is currently booming due to the opportunities offered by the high volatility of the price of this virtual currency . One of the best ways to trade with Bitcoins is to do it through trading through an online CFD broker ( What are CFDs? ). In this article we are going to see how to trade Bitcoins in Plus500 (CFD Service), one of the best online CFD brokers and probably the one that offers the most intuitive and easy to use trading platform .
The main advantages of using Plus500 (CFD Service) to trade Bitcoins are:
– Agility and security : Through Plus500 (CFD Service) we can obtain benefits from the fluctuations of the value of Bitcoin without the need to acquire them in property. Therefore, it is an agile method since we do not have to look for buyers and sellers of Bitcoins to obtain benefits and insurance since we do not depend on money exchanges with strangers nor do we have to take care of the custody of Bitcoins.
– Leverage : Plus500 (CFD Service) allows us to trade Bitcoins with leverage. That is, you could get to obtain benefits from operating in Bitcoins with an amount several times higher than the one you deposit as a guarantee.
– Go long or go short : With Plus500 (CFD Service) you can benefit from both the price rises and falls in Bitcoin. If you think the price will rise you can open a buy position (“go long”). On the other hand, if you think the price will go down, you can open a sell position (“go short”).
– Start trading Bitcoins from just € 100 : In Plus500 (CFD Service) you can open an account with just € 100 deposit. This broker also offers a free demo account, with no time limit, to familiarize you with its trading platform.
(*) Risk warning: 80.5% of retail CFD accounts lose money.
How to trade Bitcoins with Plus500?
1- Access the Plus500 trading platform by clicking here .
2- Select the ” Real money ” option to open an account and start trading or ” Trial Mode ” to practice with play money before putting your money at risk.
3- Once the trading platform has started, on the left side we go to the section of ” Crypto ” >> ” Cryptocurrencies ” and there we find Bitcoin with its current purchase and sale price.
4- Click on the link ” Instrument Data (information icon) ” and we see the following data:
Purchase price / Sale price : They reflect the current purchase and sale prices of Bitcoin in Plus500 (CFD Service). The difference between the two is the commission that the broker stays (it is called the spread).
Premium time / Premium purchase / Premium sale : If we maintain an open position beyond the daily premium time, a maintenance premium will be applied, which is indicated in Premium purchase if we have opened a purchase position o Premium Sale if we have opened a sale position. You can decide to trade Bitcoins throughout the day and close your positions before the premium time or keep them open and assume the cost of the premium.
Leverage : It is the leverage available in Plus500 for Bitcoins.
UPDATE: The new regulation on trading with leverage approved by the European Securities and Markets Authority (ESMA) that entered into force on August 1, 2018 limits the leverage available to retail clients of brokers based in the European Union. The maximum available leverage varies between 1:30 and 1: 2 depending on the volatility of the underlying asset:
- 1:30 for the major currency pairs.
- 1:20 for secondary currency pairs, gold and major indices.
- 1:10 for non-gold raw materials and secondary indices.
- 1: 5 for stocks and other securities.
- 1: 2 for cryptocurrencies.
These limits do not affect professional clients or brokers that operate from countries outside the European Union.
Initial Margin / Maintenance Margin : These are the additional funds guarantees required to keep your positions open. Regarding the value of the Bitcoins you are buying or selling, you have to have more funds available as guarantees to withstand possible fluctuations in the value of the Bitcoins.
Expiration date (Expires in): It is the following date in which the contract expires for difference and in case you keep open positions they will be closed on that date and time indicated.
5- According to the current trend, seeing the price evolution charts or following economic news that may affect the price of Bitcoin, decide whether to buy or sell Bitcoins .
In the following example we decided to buy Bitcoins with Plus500 (CFD Service) in anticipation of its value increasing.
We see that the current price is $ 13,636.13. We select the number of contracts (minimum units available) and see what their value is . The following indicates the guarantees that we need to provide (required margin) to open the position. In this example we see that we can operate with € 480.05 in Bitcoins only with guarantees of € 96.01 (it is the 5th part as the available leverage is 1: 5). Remember that you must have more available balance in the account to support the maintenance margins and possible fluctuations in the value of Bitcoin.
6- To protect you against losses and also to set your profit target we have 2 instruments below:
Closing when it goes up to : (called take profit) allows us to set a profit target. When the value of Bitcoin reaches that level the position will be closed and we will collect benefits. It is used to prefix a profit target instead of being exposed to subsequent fluctuations by having to execute a manual closing of the position.
Close with losses : (called stop loss) allows us to set a maximum loss target that we are willing to assume. If the value of Bitcoin does not advance in our favor, the position will be automatically closed when it reaches this level, thus allowing us to minimize the risks of a greater fall.
Keep in mind that you must give the stop loss a sufficient margin to support the fluctuations that the price is having. If you place it very close to the current value, the minimum fluctuation will cause the position to close automatically even though it could come back and advance in your favor with a little more time.
Discover our real experience on how to open a Plus500 account, deposit funds and withdraw money . We show you step by step , with screenshots and we explain all the details you should know:HOW DOES PLUS500 WORK?
If you want more information you can see this other article on how to invest in bitcoin . You can also send us your questions, opinions or experiences from the comments form that you will find a little further down. Thank you.