Etoro was founded in 2007 and is regulated by two tier-1 jurisdictions and one tier-2 jurisdiction. Making it one of the safest brokers with the lowest risk for trading CFDs. eToro is praised for its excellent social copy trading and cryptocurrency trading experiences for new and experienced investors. The mobile app and web platform is user-friendly and easy to navigate. It is important to note that eToro is pricer than most of its competitors and research and educational tools are limited.
What is eToro?
eToro is a well-known fintech social trading broker. The company was established in 2007 and is based in Israel. It is reported that eToro is one of the world’s largest social trading and investment companies in the world. eToro has millions of clients in over 140 countries. Initially, eToro was a graphic-intensive forex platform, which has now integrated tools for crypto trading. Clients who are not in the US can trade additional asset classes such as CFDs and stocks on a variety of exchanges. The platform is a breeze for investors who have a basic understanding of cryptocurrency trading.
Who Founded eToro?
It is reported that eToro was founded by David Ring, Yoni and Ronnen Assia. The Assia brothers serve as CEO and CPO of eToro, while David serves as acting Chairman of eToro USA.
Is eToro Only for Experienced Investors?
The eToro platform serves traders in the U.S. Traders outside of the U.S can still trade stocks and CFD. One of the most striking features about this platform is the ease in which clients can implement copy trading. Traders can mimic successful traders strategies and use it to their advantage. However, it is important to note that even copy trading does not guarantee instant success for any trader.
Is eToro Safe to Use?
eToro is considered to be safe, since its UK and Australian arms are regulated by top-tier financial authorities. eToro is a well-known fintech start-up company. The company is fully transparent. However, it is not listed and does not publish any financial data in the media. Clients are always protected with eToro. Citizens of the UK are protected by the FCA; Australian clients are protected by ASIC, and other investors with their trading accounts with eToro (Europe) Limited, are protected by the Cypriot watchdog, CySEC
What Makes eToro Significant from its Competitors?
There are many CFD brokers and many Bitcoin Trading platforms around the world, but eToro is one of few platforms that is equipped for both services and its products are well designed and intelligent. Many traders have praised its user-friendly platform and mobile app. eToro is best known for its variety of social trading features, which makes the practice of investing such a rewarding experience for customers on all levels. The platform also offers many security and asset types and it now allows for cryptocurrency trading as well. Clients can trade cryptocurrency bitcoins and other cryptocurrency stock on eToro.
Pros and Cons of eToro
Pros
- Over 14 different cryptocurrencies that can be traded 24/7. Including Bitcoin, Ripple, and Ethereum, but also eos, Iota, Tron, and Tezos.
- User-friendly website interface. The mobile app is just as user-friendly and can be navigated with ease.
- Great community for cryptocurrency traders. Traders can learn from one another and share reccomendations.
- Free stock and ETF trading in the EU.
- Quick and easy account opening process.
Cons
- $25 minimum to buy cryptocurrency. This makes it difficult for smaller trading accounts to spread their balances.
- Wide spreads for trading cryptocurrency. Trades are executed with specific spreads that vary from coin to coin. Some of these spreads are fairly wide.
- Copy trading only requires a minimum fee. Most require a minimum of $200 for each copied trade, which is relatively high.
- There is a withdrawal fee of $5
- Only one account base currency is used.
How to Open an Account with eToro
1. Sign up
Opening an account with eToro is quick and easy. All a new client needs to do is go to their website where they will be asked for information such as name, surname and email address, after which they will be promoted to create a secure password and username. A verification email will be sent to the clients given address and after confirmation has been done, the new client will be able to link their accounts to a Facebook page or Google account, making logging in a seamless process.
2. KYC & Account verification
Verification is a mandatory process. It protects the client against fraud and scammers. Verification takes place upon signing up. You will be required to provide some personal information. Verification will take three-five days to complete. Only once the account is verified, a deposit will be required. Prior to verification, the demo account feature is available. This allows new clients to familiarise themselves with the platform.
3. Deposit Funds
One of the most significant features of eToro is that the platform accepts multiple payment methods. eToro is known for being a Paypal cryptocurrency platform. Once verified, clients are able to deposit as much as $2000 of real money, answer some simple questions, or submit government ID and proof of residency for higher deposits. Clients can still deposit $250 without verifying their account, but they will not be able to make any withdrawals until verified.
4. Start Buying Cryptocurrency
Once a new client has made a deposit, they can now start trading by clicking on the “Trade Markets” button on the eToro platform. There they will see all available securities, Forex and crypto markets. Clients will also be able to search for specific assets or copy other traders using various social trading tools. The most accessed markets will appear on the Watchlist. Once the client has selected an asset to trade, they should click on it and choose from a “Market”, “Limit”, or “Stop-loss” order type. Market orders will sell for what price is currently available, Limit orders will allow clients to wait for a specific price and Stop-Loss orders will liquidate if the price falls to a certain level.
5. Selling Your Cryptocurrency
New and experienced clients can sell their positions at any time. All they need to do is choose the “Buy” position and they can make money if the price of the asset increases, beyond the upper limit of the spread. If a client took a “Short position”, they will make money if the asset falls beneath the lower limit of the spread. Clients can withdraw any balance of $50 or greater.
The eToro Trading Platform
The latest version of the eToro trading platform is a combination of many different service offerings. eToro has a simple CFD trading for a variety of different securities and assets. New clients are also permitted to use CopyTrader which is used to mimic trading decisions of traders on the platform. This incredible feature is a great tool in social trading, a concept that is indigenenous to eToro. Social trading allows any client, new and experienced, an opportunity to be successful on the platform. eToro also has an eToro Wallet, which is a blockchain based cryptocurrency trading technology that’s totally different from CFD-based trading. With eToro wallets, clients can actually buy cryptocurrencies, rather than making price predictions as with the CFD products on the main eToro trading app.
Pricing and Fees
eToro charges a $5 withdrawal fee. Withdrawals sent to non USD currencies will also have a conversion fee. eToro also charges a fee for accounts that are inactive. Deposit fees are not charged. Brokers will charge clients various fees, since they are responsible for mobile trading apps, financial research tools, educational resources and maintaining the trading platform. The only way for a broker, like eToro to generate revenue, is to charge its clients a fee for using the brokerage services. eToro’s fees depend on the client’s location and the asset class traded.
Customers in the U.S who are trading cryptocurrencies pay 0.75%-5.0%, depending on which currency is traded. Non-U.S customers who are trading stocks are not liable to pay commission for opening or closing a long position. However, short sales incur a commission of 0.18% of the value of the trade. Non-U.S. clients who are planning to buy assets that are not in their home currency will also be liable to pay a conversion fee. Accounts that have been dormant for a year, will be charged an inactivity fee of $10 USD. There are no withdrawal fees for U.S clients, but a client must withdraw a minimum of $30. Outside of the U.S clients will be charged a withdrawal fee of $5.
Cryptocurrency fees
The cryptocurrency trading spreads are wider than the other assets. This is because the cryptocurrency market is always volatile. For an asset like Bitcoin, where the price fluctuates daily, large spreads make sense. Cryptocurrency spreads are between 0.75% and 3.45%, since Bitcoin is more stable, it is the cheapest to trade.
Commodity fees
eToro’s pricing is much more transparent than with most of its competitors. With eToro there is no hidden commission and there is no deposit fee. The platform makes all of its money on the “spread”, price thresholds and below the market prices of assets. The spread is set as 0.09% per side, most of the time.However, there are some spread differences with cryptocurrencies. eToro only accepts USD.
ETF fees
ETF fees are not as complex since all ETFs trade at 0.09% per side.
Stock fees
Stock trade with 0.09% spread and overnight fees are charged for stock positions held for more than 24 hours.
Forex fees
Forex spreads are measured in Percentage in Point or Pips. Pip spreads are very small for the stable, and popular currency trading pairs. Most Forex pip spreads are 20 or less.
Regulations
eToro is regulated by several top tier national and international regulatory bodies. In Europe, it complies with international directives about company policy, practice and client security. In the UK, it complies to the Financial Conduct Authority (FCA). In Cyprus it complies to the Cyprus Securities and Exchange Commission, best known as CySEC. With each product or service added to its offering, eToro has to improve its compliance with regulatory agencies listed above. eToro is currently expanding into the US and other major markets, this means that they will now have to comply with the Securities and Exchange Commision and other bodies.
Education and Trading Tools
We encourage all clients planning to use eToro, to make use of the demo account feature. No real money is required to use the demo feature and this gives new clients an opportunity to explore the platform. With the demo account, clients will have access to $100,00 in make believe money and will be able to trade with it, just like on the live platform. eToro does offer a few other basic education tutorials covering important topics around cryptocurrency. There is also a series of Fintech articles We recommend that clients focus especially on the eToro portfolio chapter, if they’re interested in following other traders. For non-U.S. clients, there are weekly webinars hosted by eToro. This webinar link does not exist on the U.S website. Non U.S. customers can also access eToro’s media centre, where there are guides, podcasts, video tutorials and blogs.
Key Feature of eToro
- User-friendly interface.
- Non-US clients can trade cryptocurrencies.
- No explicit commissions charged.
- Traders can follow and copy the trades of other profitable traders.
Usability
Opening a new account is quick and easy. All a new trader needs to have to complete the process is an active internet line. Once all the information and documentation is submitted, there is a 1-4 day verification process. All U.S and Australian residents are able to open a new account for $50. Residents outside of these countries require $200 to open a new account. Only U.S account holders can open cash accounts.
Trading Experience
Placing a trade is just as easy as opening a new account. All you need to do is click the trade button. Your eToro broker will be able to assist you with all the necessary steps to get you going.
Range of Offerings
Only U.S clients have the option to trade in cryptocurrencies. Outside the U.S it depends on your nationality and country residence. A U.S citizen cannot open an account unless they reside in the U.S. Below is a list of service offerings:
- Eligible U.S. customers: 15 cryptocurrencies
- Non-U.S. customers: 16 cryptocurrencies
- Non-U.S. customers: 47 currency pairs
- Non-U.S. customers: 30+ Contracts for difference (CFDs)
- Non-U.S. customers: Approximately 2,000 stocks and 150 exchange-traded funds (ETFs) from 16 countries
Accounts Features
eToro allows clients to open an account as a retail or professional client. Retail clients get all access to all of the eToro trading assets and can trade manually or in copy trade mode. A retail client has certain restrictions when it comes to leverage. For example, they may receive a negative balance protection and margin closeout restrictions. Traders who opt for being a professional client must complete a suitability test. It is important to note that eToro does not offer portfolio margining and does not have a stock loan program. No interest is paid on cash or cryptocurrencies for accounts under $5,000. Traders will also not be able to enroll in dividend reinvest plans.
Research Features
Unfortunately, there is no research hub on the eToro platform. There is information available on each cryptocurrency, including charting and some technical advice on the website. Clients can also find user testimonials on the website that will provide some perspective on the platform and its successes.
Deposits and Withdrawals on eToro
Deposits and withdrawals are quick and easy with eToro. All new clients need to complete a single user profile questionnaire to deposit up to $2,000. Proof of identity and residency is required to deposit more. There is also no deposit fee with eToro and there are a range of payment methods for new clients to use, such as:
- Bank Transfer
- Credit/Debit Card
- PayPal
- Skrill
- Neteller
- Webmoney
However, eToro does charge $25 for all withdrawals and the minimum withdrawal is $50. The $25 is more expensive compared to other CFD brokers, but with large withdrawals it is trivial. It is important to note that the $25 cost is not fixed.
Customer Service
eToro offers new trader 24 hour customer service, seven days a week. New traders will be able to reach eToro by logging a support ticket or by calling them. There have been cases where traders experienced some difficulty getting support during times of heavy customer demand. Support ticket requests are addressed within a few hours, while it may take longer to reach a consultant telephonically.
Clients with accounts under $5,000 can access help online. Clients will be able to chat to a live agent once they are provided with a customer service chat link. Members with accounts over $5,000 are assigned a dedicated account manager. Accounts over $25,000 are categorized into the Platinum Club level, which has greater perks and rewards. Phone support is only available in Australia and there is no live broker support.
Tools and Platforms
Social trading is considered to be one of eToros most unique features. It is reported that eToro was created by a team of people who understood that cryptocurrency investment may be complex to understand for new investors. Investing does not come as second nature to many people. The social trading feature equips new investors with knowledge and wealth. This feature allows new investors to mimic traders of other successful traders. Trades can be replicated by everyone in the eToro network. This gives new traders a chance at success and also gives eToro a competitive edge. eToro is easy to navigate and apparently more user friendly than Facebook.
CopyTrades
CopyTrades is eToro’s most significant feature. New traders are given the opportunity to look at the portfolio and history of hundreds of successful eToro traders, then decide whether they would want to replicate these portfolios. CopyTrades gives new traders tons of statistics that explain each portfolio in great detail. New traders will be able to invest between $2000 and $500,000 in up to 100 different portfolios. The only con is that the portfolios can only be sold as a whole.
CopyPortfolio Trading
CopyPortfolio is basically bundles of stocks and other assets, that can be invested like a mutual fund. These are CFD positions only and not holdings of actual securities. However, they do trade just like ETFs. There are different CopyPortfolio themes. If a new trader were to invest in a banking theme, they would receive the positions of large banks and fintech companies. There are also other themes such as Consumer Tech CopyPortfolio or a Cannabis Medical Copy Portfolio.The choice is yours.
OpenBook
eToro was originally known as Web Trader and was one with OpenBook to conceptualise the one-stop-shop for its traders and clients. eToro OpenBook is not just an app for trading but it is a social app as well. On here, you can view the profiles of other traders and check the market prices, and use the tools like CopyPortfolios and CopyTrader simultaneously.
eToro functions much like the popular social media app, Twitter. It gives traders a chance to learn the ropes fast and experts can share their best trading tips, with the rest of the eToro community. Every trader has a customized news feed tailored to their interests. Traders can also make updates on the platform, discuss strategies and tag one another in conversations. Traders also get alerts or notifications when the market is volatile.
Products
eToro offers new clients two main products: the eToro Blockchain Wallet and eToro Trading platform. The eToro Blockchain Wallet, is a seperate phone app made for the purpose of trading popular cryptocurrencies. Coins can be purchased and sold using blockchain addresses and private keys.
The eToro Trading Platform can be downloaded to any computer with an active internet connection. The platform is fully functioning and users will be able to find their way around easily. The eToro Trading platform also has prominent features, such as social trading, CopyPortfolios and CopyTraders.
Markets
Forex Platform
Forex currency pairs can be traded on the eToro platform. There are many pairs to choose from and each pair has a different spread.
Stocks Platform
Stock trading can also be done on the eToro Trading Platform. It is the recommended choice for new traders looking to invest in stock markets. eToro outperforms its competitors when it comes to stock trading apps.
CFD Platform
New traders can invest in CFDs on the eToro Trading Platform. This is obviously based on the current value of the stocks. The spread is 0.09% for all stock CFDs.
ETFs
ETFs refers to Exchange Traded Funds. ETFs are reported to be some of the most popular securities in traditional investment markets. ETFs are basically thousands of stocks that trade like a single asset. eToro users can make CFD trades on ETF prices. ETF spreads will never exceed 0.09% with eToro.
Are There Significant Differences Between eToro and Other Brokers?
There are dozens, if not, hundreds of different investment brokers around the world. We decided to check out the best cryptocurrency trading platforms on the market.
eToro comes out top for CFD brokers, whereas competitors like Plus500 and Markets.com are complex and dated, compared to the intuitive, user-friendly experience offered by eToro. eToro also has better fees than other CFD brokers, since it doesn’t charge deposit fees and there are no hidden commissions. However, eToro is considered to be fairly new, when compared to its competitors. Traders may find that platforms like Binance offer many more altcoins than eToro has available.
It is important to note that eToro does accept fiat payments, which platforms like Binance do not. eToro happens to be very similar to Coinbase and Gemini. eToro is user friendly and versatile.
eToro Research Offers
eToro understands that markets such as CFDs, may be complex to understand for new traders entering the market. Therefore, eToro offers an education center, filled with tons of information, for new and experienced traders. There are two main courses on offer:
1. Trader Course
The trader course demystifies complex forex terms and provides some basic trading strategies, with a glossary of financial concepts.
2. Investor Course
This course is more of a global trading course. It covers many important topics, such as capital management and several different ways of analyzing financial products, including advanced tech analysis. There are also a list of instructional videos and live trading webinars. The eToro blog is also a great source of information.
eToro in UK, USA, Australia
eToro has many clients in the UK, Australia and the United States. However, it is a relatively new brokerage company in the US but enjoys full licensing in America. Both products are available in all three of these major markets.
Our Conclusion
eToro was founded as a social trading brokerage firm and offers new clients and potential investors in cryptocurrency, an attractive platform that is easy to use and navigate. eToro is focused on the provision of Copy-trading services and takes pride in have the title of the world’s best social trading platform in the way it offers investment opportunities in both stocks and cryptocurrencies. However, U.S. based clients may have a different experience to those outside of the U.S.
FAQs
- In which countries is eToro accepted?
eToro is not accepted in all countries because of CFD regulations. Countries such as Belgium in Europe, the U.S. Brazil and Hong Kong, don’t have eToro CD services.
- How does the eToro Platform make money?
eToro charges clients a fee for using its services, as a means of revenue.
- Where can I find eToro offices?
eToro is based in Sydney, Australia, London, UK, New Jersey, USA, and Limassol Cyprus.
- What is the maximum leverage in eToro?
The maximum leverage for traders is 1:30.
- Can I transfer my eToro portfolio to another broker?
Certainly. eToro does make room for such requests. As well as offering CFDs, eToro users can also buy physical stock.
- Can eToro run my IRA or other retirement account?
Unfortunately not. eToro is not a retirement investment company and should not be thought of in this regard. The platform does offer social trading features, but this is not to be confused with automated investment services.
- Can Bitcoin be sent to an eToro Wallet?
Yes, the eToro wallet should be seen as an actual wallet where assets can be stored. Traders need to check what cryptocurrencies their wallet supports, then store as desired.
- Is it cheaper to buy actual stocks and ETFs, rather than use eToro CFDs?
Yes. With the right broker, new traders will be able to trade stocks and ETFs for free. Once you have purchased these stocks, there are very low holding costs. eToro CFDs are reported to be a convenient and fast way to invest.
- Can I access my eToro account using my smartphone?
Yes you can. With eToro, you have one account that is accessible through a variety of different app types, including the eToro app for Iphone.
- What cryptocurrencies does eToro support?
Here is a list of the cryptocurrencies you can trade on the eToro cryptocurrency exchange: bitcoin, Ethereum, Bitcoin Cash, Ripple, Dash, Litecoin, Cardano, IOTA, Stellar, EOS, NEO, Ethereum Classic, TRON, ZCASH, Binance Coin, Tezos and Gram.
- How much money should I deposit when I begin?
We recommend you start off with the bare minimum. The minimum deposit with eToro is currently $200. That’s probably a good deposit for most users to make. You can deposit up to $2000 for a basic account, then much more if you get your account authenticated with your ID and proof of residence. But let’s save high dollar investment until you’re accustomed to the platform.
- Can I use non-USD currency to pay for eToro trades?
eToro trades are all settled in US Dollars. You can use some other currencies like Euros, but these are converted into US Dollars by eToro, and you pay 0.25% in service charges for their trouble.
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CFD Glossary
| Term | Definition |
| Contract for Difference (CFD) | A Contract for Difference is a well-known type of financial derivative instrument, much like indices, commodities, currencies,etc. |
| Contracts for Difference (CFDs) | A formal agreement between two parties/people to pay the difference in price from when the contract was opened until the contract is closed. |
| CFD Trading | Investors have the option to go short (sell a CFD) if they think a price will decrease or go long (buy a CFD) if they think the price will go up. |
| Margin | The margin refers to the minimum deposit required. |
| Initial Margin | The initial amount required in order to open the position. It is often also referred to as an initial deposit. |
| Average True Range | ATR refers to the measure of market volatility over a specific period of time. |
| Back Testing | Back testing occurs when a strategy is put to the test, by using historical data for validation. |
| Base Currency | The first listed currency in a pair. |
| Commodity CFD | A type of CFD that derives its value for an underlying commodity it’s meant to track. |
| Consolidation Market | A market that is stagnant, neither moving up or down. |
| Currency Pair | Forex is trading in currency pairs. It refers to the price quoted in terms of the relative values of one currency against another. |
| Leverage trading | Also referred to as margin trading. The process in which an investor borrows a large amount of money from a broker to open a larger position. |
| Leverage ratio | The amount of leverage/money provided by a broker to trade a leveraged product. The amounts typically offered are 5:1, 10:1 and 30:1. |
| Maintenance margin | The amount of minimum funds needed to keep positions on the account open. |
| Used Margin | The amount of money that is currently used to keep positions open. |
| Equity | The total value in an investors account. |
| Free Margin | Funds available on an account to trade with (not currently being used by open positions). |
| Overnight charges | A Fee charged by a broker for holding a position over night. It is also referred to as an overnight financial charge and is linked to the interest rate of the currency being traded. |
| Buy position (“going long”) | A long position is the purchasing of an asset, with the expectation that its value will increase. |
| Sell position (“going short”) | A short position refers to the sale of an asset. with the expectation that its market value is set to fall. |
| Slippage | The difference between a requested market price and the actual price the trade was filled at. |
| Debt-To-Equity Ratio | The ratio of the total debt of a company to the amount of capital that shareholders have invested in the company. |
| Derivatives | A financial instrument that obtains its price from underlying security, index, currency pair or commodity. |
| Donchian Channel | An indicator that has two boundary lines determined by the highest and lowest points. |
| Downtrend | A series of lower highs and lower lows in the cryptocurrency market. |
| Earnings Per Share (EPS) | The profit the company makes is divided by the number of outstanding shares the company has. |
| Ex-Dividend Date | The very first day, a buyer of a share no longer obligated to a payment of the dividend the stock (or CFD) offers. |
| Exposure | The sum total value of all your positions in the market at any particular time. |
| Finance Charge | The price charged to hold a given position from one trading day to the next. This charge is generally calculated, based on the country’s cash rate plus a small interest charge. |
| Fixed-Dollar Model | A certain fixed-dollar model, where a certain amount is allocated to risk on any given day. |
| Fixed Percent Risk Per Trade | This refers to a risk management model where a certain amount of money is allocated to overall trading capital. |
| Forward Testing | Testing a strategy in real time, while the movements in price unfolds. |
| Fundamental Analysis | A method developed to evaluate the value of a company relies on financial statements, PE ratios, future growth projections and company financial statements. |
| Post-market Auction | The last available trading opportunity for the day before the market closes. |
| Pre-Market Auction | The identical matching out of prices |
| Price-to-Earnings Ratio (PE) | Determining the projected worth of a project by dividing the current market price by the earnings per share. |
| Product Disclosure Statement (PDS) | A document held by every financial services company, to provide to their clients regarding their products or services. This document will outline how the product in question worked, its potential benefits, and associated risks. |
| Pyramiding | A rule where traders add to their existing position(s) in an attempt to maximize the potential profits on winning trades. |
| Range-Bound Trading | Trading in a range where the value fluctuates between two main points. The two points are typically referred to as “Support” and “Resistance.” |
| Return On Equity (ROE) | The return a company generates based on the net assets they hold. |
| Return On Investment (ROI) | The amount of return you’ve realized on your deposited capital. |
| Scaling In | Initiating a trade by opening a small position in order to determine your readiness to bring it up to a normal position. |
| Scaling Out | Gradually closing your trade as it moves in your favor or reaches some specified profit objective. |
| Technical Analysis | Any mathematical formulas used over the price and/or volume history of the market in an effort to determine the probable next move of any particular asset. |
| Volatile Breakout Trading | A type of trading strategy that attempts to take advantage of short, sharp movements in the market over relatively short periods of time. |
| Volume | A measure of the number of shares or contracts that are solidified over a set period of time. |
| Trend-Following Trading | A trading strategy that attempts to profit from markets that tend to move either up or down for extended periods of time. |
| Trend Line | A line drawn across a chart to line up successively higher bottoms in up-trending markets |