8th Jun 2020 09:14
(Alliance News) - Plus500 Ltd said Monday it has continued to see record levels of customer trading activity as heightened levels of market volatility persisted into April and May, but with customers winning at Plus500's expense more often than not.
Shares in the contracts for difference trading provider were down 7.8% at 1,119.50 pence, the worst performer in the FTSE 250 on Monday morning.
Plus500 differentiates itself from online trading peers as it acts as a "market maker" for its customers, meaning if the customers bet right more often than wrong, the company can lose money.
More positively, Plus500 said it has added 100,574 new customers since the start of the second quarter, which is already ahead of its expectations for the entire quarter. This is also in excess of the 82,951 new customers added in the first quarter.
Plus500 said revenue from customer income remains at record levels, generating around USD249.0 million in the second quarter to date. Revenue from customer income means revenue from customer spreads and overnight charges.
However, the company said that total revenue for the second quarter to date stands at less than half of that, at USD102.5 million, as customer trading performance has been positive for the customers and negative for Plus500.
"We have consistently stated that customer trading performance is subject to significant market movements and is therefore likely to fluctuate. This is magnified during periods of heightened market volatility such as those we are currently experiencing and given the growing scale of the business. Nonetheless, we continue to expect this performance to revert to a medium-term historic level of near-zero and our outlook for the year remains unchanged," Interim Chief Executive Officer David Zruia said.
Plus500 said it continues to expect full-year revenue and profit to be in line with market consensus expectations.
By Arvind Bhunjun; [email protected]
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