Though originally designed for use in the eCommerce space, its speed, safety and simplicity mean more traders are now looking to use it to fund their trading accounts. As a result, there is an increasing number of stockbrokers that accept PayPal for deposits and withdrawals. This article looks at the pros and cons of a PayPal trading account and offers reputable online brokers that use it. It in no way constitutes financial advice and should be viewed only as a starting point for your own due diligence. Please note: Pepperstone offers stocks as CFDs only. Founded in 2010, Pepperstone has been quick to adapt to the social copy trading trend, providing plenty of tools for traders to share and mimic trading styles. Traders can opt for payments via PayPal, which will be processed instantly. With over 1,200 instruments, it offers two account types:

Standard – The Standard account comes with market average spreads and zero commission Razor – This account operates on a commission basis but with exceptionally low spreads

Pepperstone offers the TradingVies, MT4, MT5 and cTrader platforms, as well as supporting DupliTrade for copy trading. They normally recommend a minimum of 100 – 200 USD to start trading with them. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78.8% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money. This award-winning broker offers PayPal trading accounts through the user-friendly WebTrader platform. WebTrader is available in web-based and mobile versions, and users can access an unlimited free demo to test out the platform without risk. It has a clean layout that makes trade execution simple and offers advanced functionality with a range of tools for research and analysis, as well as real-time market information. Offering its services since 2008, Plus500 has a trusted reputation, and with highly competitive fees and tight spreads, it is a popular choice for traders of all styles and experience levels. Copy trading is not available. But, if you are confident in your strategies, there is a range of instruments available, making Plus500 a good broker of choice. Trading with CFDs is suitable only for short-term investments.

XTB Trading was established in 2004 and has since built a solid reputation among the online trading community. Retail accounts are available at both standard and pro level, with professional accounts offered for experienced traders that meet certain qualifying criteria. The most beneficial aspect of a PayPal trading account with XTB is its powerful proprietary platform, xStation 5. This includes a range of features that allow for in-depth analysis and performance monitoring, helping users identify patterns in their trading style. If you prefer the MetaTrader platform, MT4 is also available to XTB account holders. The broker provides a library of educational materials, including live webinars and video tutorials. Its Trading Academy is also a valuable resource for those new to the markets, with lessons split into basic, intermediate, expert and premium. Spreads and fees vary depending on account type, so be sure to check these before registration. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. City Index has built its reputation on spread betting. This is where you can trade on rising and falling price movements rather than purchasing stock. This is a popular choice for those looking for tax-free investments as you are investing in movements rather than assets. As spread betting is about movements, this is ideal for those looking to maximize short-term profits rather than investing in long-term opportunities. City Index has an interactive dashboard that allows you to view different markets at a glance. With multiple charts and 65 technical indicators, this is more suited to experienced investors who know what they are doing.

With low fees and high leverage available, IC Markets is a well-established broker catering to traders dealing in various instruments and is a highly popular choice for forex traders in particular. Users have access to a choice of three trading platforms in MT4, MT5 and cTrader. The broker also works with Myfxbook and ZuluTrade to facilitate copy trading strategies. Although they vary between account type and platform used, IC Markets’ spreads are highly competitive. Its Raw Spread account offers some of the best available and with relatively low commissions, making it an ideal choice for day traders. Account holders have access to many video tutorials and webinars, and the IC Markets Trading Knowledge center provides information on everything from market conditions to fundamental and technical analysis.

Primarily classed as a forex broker, but with other instruments available including shares and cryptocurrencies, fpmarkets has been around since 2005 and has several industry awards under its belt. Traders can choose from a standard account or a raw account, both compatible with MT4 and MT5. The raw account offers tighter spreads but with additional commission charges, whereas the standard account is zero commission but with less competitive spreads. Unlike some of the brokers that facilitate PayPal trading accounts, fpmarkets does also offer automated and copy trading through Myfxbook Autotrade. Account holders will find a range of educational resources by way of eBooks and video tutorials, as well as having access to fpmarkets’ Traders Hub, complete with an economic calendar, forex calculator, technical and fundamental analysis, and knowledge center.

There is no need to input sensitive payment information into a third-party website – all you need are your account ID and password.

Deposits and Withdrawals Are Quick and Typically Free

So long as there are funds available in your account or through one of your registered payment methods, deposits made via PayPal are usually instantaneous. Withdrawals need to be approved, so may take longer, but are still much quicker than other methods. Bear in mind certain brokers may have associated charges, which you should be able to find out beforehand, but most provide service via PayPal for free.

If you have used PayPal for online shopping, you know how easy it is to use funds from your registered accounts, and the same goes for trading. By linking multiple accounts, you will have easy and secure access to a range of funding sources.

There Are High Maximum Transfer Allowances

With a maximum transfer amount of $10,000 as standard, PayPal limits are more than sufficient for most beginner traders. Once your PayPal account is verified, which simply involves linking an active bank account or credit/debit card, the maximum increases to $60,000.

PayPal Adopts Strong Anti-Money Laundering Policies

PayPal utilizes the latest technology in digital security and enforces strict regulation, so you have peace of mind your assets are protected. Those that offer PayPal trading accounts must abide by these regulations, so you can also have increased confidence that you’re dealing with a reputable broker.

Disadvantages of Using a PayPal Trading Account

Charges on Trading Transactions

When using a PayPal trading account, you do need to factor in the charges applied to your trading transactions and how these affect your profit margin. These are not too dissimilar to other e-wallets like Skrill and Neteller, but every broker will apply different charges, so be sure to do your research.

No Chargebacks on Financial Instruments

One of the main benefits of using PayPal for online transactions is the chargeback facility – essentially the ability to request a transaction reversal should you wish to dispute it. However, this only applies to physical goods so is not available in a trading context.

High Transfer Fees

As well as charges on trading transactions applied by your broker, you also need to account for PayPal’s own fees. This includes currency conversion fees (typically 2.5% above the current base rate) and fees for withdrawing to a credit/debit card. Transfer fees are also a major consideration as these can be quite high, ranging between 4% and 12% of your transfer amount. Trading of any kind comes with associated risks and choosing the wrong broker can bring potentially devastating results. With that in mind, it is imperative to conduct thorough research before opening a PayPal trading account. Here are a few key things to look out for:

Is the PayPal Broker Regulated?

This is by far the most important consideration when choosing an online stockbroker, no matter the method you use to fund your account. Regulation gives you peace of mind that the broker operates in a legitimate, professional manner and that its accounts are regularly audited to ensure legal compliance. Regulation also affords a level of financial protection. Client funds and company funds must always be kept separate, and should the broker go out of business, there are practices in place that cover the security of your assets.

Does It Have a Good Reputation?

The experience other users have had with a broker is a good indication of credibility. Search for user feedback on trusted review sites and trading Q&A platforms to get a feel for the kind of service they provide. Think beyond costs, payment options and trading platforms. You may want to consider what additional support they offer by way of educational resources, chatrooms and, of course, a good level of customer service. For stockbrokers that accept PayPal, you will also want peace of mind that other users have not encountered serious issues funding their accounts through the e-wallet.

How User Friendly Is the Platform?

Depending on the type of trader you are and your level of experience, you will want a platform that is user-friendly, easy to navigate and offers a range of tools that allow you to make well-informed, profitable investments. MetaTrader (both MT4 and MT5), ZuluTrade and cTrader are all common platforms offered by a variety of brokers, including those that accept PayPal as a funding method. Most also offer their own proprietary platform. Before opening your PayPal trading account, see if there is a free demo period available. If you are not comfortable with a stockbroker’s platform, it is unlikely you will turn a profit trading through them.

What Additional Features Are on Offer?

Alongside the platforms available, another thing to look for when choosing a PayPal trading account is additional features like trading tools and educational resources. Charting software, trading signals and analysis tools all help to inform better trading strategies, and things like economic calendars and financial news help you stay abreast of market influencing factors. Training programs are also of huge benefit, particularly if you are new to the world of trading. Most brokers offer some level of education to account holders, so keep an eye out for this.

Does the PayPal Broker Fit with Your Trading Style?

The type of trader you are largely dictates what you need from a broker. Look at things like minimum deposit requirements and maximum withdrawal limits to make sure they are within your ideal range. You also need to consider spreads, swap rates and leverage, as well as trade-associated fees like rollover charges, interest rates and withdrawal costs. All these things influence your profit margin and vary widely from broker to broker. The right PayPal trading account for you will be with a broker that offers the most competitive rates for the type of trades you wish to execute.

Plus500 Pepperstone

Pepperstone Plus500

In the same way that you would transfer funds from your bank account to your chosen trading platform, you will be able to perform these actions with your PayPal account. Some of these, such as Pepperstone, will also allow users to make deposits, transfers and withdrawals by linking their PayPal accounts to their trading accounts. If you predict these will impact your profit margin too much, there are probably other funding options better suited to your trading style. However, for most beginner traders, these costs are far outweighed by the financial protection on offer. Though the list of stockbrokers that accept PayPal deposits and withdrawals is still limited, it is growing as brokers look to stay relevant and attract new clients with this sought-after option. WikiJob does not provide tax, investment, or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal capital.