Plus500 tanks 40pc, as hedge funds profit

HEDGE funds betting against the fortunes of Plus500 earned millions after its stock dived as much as 40pc following a profit warning.

The online spread better tanked after it said that profits would be lower than expected due to a crackdown by regulators.

The crash will net a bumper profit for hedge funds which have shortsold 10.2pc of its stock, meaning they make a profit if the share price falls.

Israel-based Plus500 is expecting a hit for its 2019 profits from moves by watchdogs to limit the sale of high-risk contracts for difference. These allow punters to bet on whether markets will rise or fall, and can open them up to massive losses.

It comes after a bumper two-year rally which has seen the firm’s share price nearly quadruple.

But growing doubts have made it the fifth mostshorted stock on the London market. Hedge funds will have reaped the most cash from the share dip.

Profits for 2018 surged 90pc to £295m but this year they will be materially below what the markets are expecting. The shares closed down 30.8pc, or 503p, to 1133p.