Retail CFD broker Plus500 will join the growing list of summer AIM debutants in the coming weeks. The company revealed that it had raised $75 million in what was said to be a substantially oversubscribed share placing which was valued at $200 million. This marks one of the most significant raise this year alone with the placing price which was valued at 115p per share and was backed up by institutional investors.

Plus500 provides investors with the stock market’s rather favourite derivative product, contracts for difference (CFDs). For the uninitiated, CFDs are perhaps the simplest way for individual investors to trade with the leverage.
Instead of simply taking a position in a stock the conventional way by purchasing shares, investors can opt to enter into a contract, typically with the provider whereby the investor in this case is fully exposed to the movement from a specific entry price.

It is crucial that the provider must charge the necessary margin between 10 %-25 % of the would be valued instead of just the cost of the entirety of the shareholding.

In a lot of ways, it is very similar to renting a shareholding for the general purpose of a trade. Moreover, since the stake is basically theoretically practiced, the holder of a CFD never physically owns the shares so as they are not burdened by settlement or stock delivery.

By allowing retail investors to trade with leverage and giving them the option to short, has ultimately made CFDs an increasingly popular product. However, they are also at a very high risk of having casual investors.
All the CFD trading is carried out over the company’s proprietary platform. The company said that it plans to raise money in order to increase its marketing brand as well as potential acquisitions.

The company believes that they were successful in building an attractive and scalable business which is underpinned by the group’s proprietary technology and self-developing trading platforms. Moreover, the company is very much excited to grow its business much further to better enhance shareholder value. With the strong level of support from institutional investors it is a well grounded profitable future ahead. With the placing and subsequent admission of AIM it will support businesses in order to bolster the growth of the market.