eToro is a popular and user-friendly social trading online platform with more than 15 million users worldwide. The platform is specially designed for online investing. eToro is best known for its copy trading option and 0% commission on trading stocks and ETFs. With eToro you can trade stocks, currencies, indices, CFDs and other types of securities. You trade completely online and everything is easily managed via a smartphone or the web application. But is this broker reliable ? And what about the eToro fees ? Read all about it in our eToro review.
What is eToro?
Brief Overview
Open account: Free
Trading Stocks & ETFs: Free
Minimum investment: first deposit: $50
Cash withdrawal: $5
Minimum cash withdrawal: $30
Inactivity Fees: $10 per month after 1 year of inactivity
CopyTrading: Possible
Free demo account: Yes
Compatible with iDEAL: Yes
Investment products: stocks, crypto, ETFs, indices, CFDs, forex, commodities
Minimum age: 18 years
Supervisor: eToro is regulated by CySEC and FCA
Exchange rate storage: 50 pips (in decimal: 0.0050)
Countries: South Africa, France, Italy, Germany, Australia, Switzerland, Great Britain, Spain, Europe, Portugal. Financial regulators: FCA (UK), CySEC (Cyprus), ASIC (Australia), MiFID (EU).
Other: Affiliate programs. Payment systems: Bank, WebMoney, Skrill, Neteller, PayPal. Features: Mobile application. Indices: GB (FTSE 100), France (CAC 40), Germany 30 (FDAX), EU Stocks 50 (FESX), NASDAQ 100, S&P 500, Dow Jones (DJIA 30), Japan 225 (Nikkei), China 50 (HSI ), Spain 35. Currencies: Bitcoin, Bitcoin Cash, EOS, Ethereum, Litecoin, EUR/USD, GBP/USD, USD/JPY, USD/CAD, USD/RUB. Metals: Gold, Copper, Platinum, Silver. Energy carriers: Natural gas, Oil. Training: Free. Autotrading: Copy trading (social). Trading instruments: CFD, Cryptocurrency.
eToro is an online broker that gives private traders and investors access to the financial markets. It is one of the world's largest investment networks and a social platform where traders and private investors can discuss, tip, exchange experiences and copy each other's strategies. Most assets are traded via CFDs, but it is now also possible to buy the underlying asset. You do not buy a contract for difference (CFD), but the "real" shares.
A CFD (Contract For Difference) is an investment instrument that can be used to respond to a price increase or decrease of an underlying product. It is, like the Turbo and the Sprinter, a leveraged product. It is a contract between the buyer and the seller. When purchasing a CFD, the buyer does not become the owner of the underlying product. With CFDs you can respond to both a price increase (long) and a price decrease (short) of a share or an index. This makes eToro quite unique in that they offer both options under one roof (stocks and CFDs). Another unique aspect is the so-called 'Copy Trading'. More on that later.
Here's a selection from the range:
• Stocks (such as Netflix and Amazon);
• Commodities (such as oil and gold);
• Forex (like the Euro/Dollar);
• Indexes (such as the Dow Jones);
• Cryptocurrencies (such as Ethereum & Cardano).
The range of equities is enormous, but in some markets (such as commodities) the range could, in our opinion, be expanded a bit further.
How Does eToro Work?
eToro makes the global trading markets accessible to every trader from the moment you log in. You can immediately benefit from price increases and decreases by buying and selling. In addition, eToro offers the option of using leverage (CFD), which allows you to open a large position with a relatively small bet.
eToro allows you to trade stocks and ETFs commission-free. Opening an account is quick and very easy. The platform offers innovative features such as social trading, which allows you to copy the strategies of other traders.
Pros
Free stock and ETF trading (0% commission);
Opening an account is very easy;
Social trading experience;
Disadvantages are high forex costs and withdrawing money is slow. In addition, a fee of $5 is charged per withdrawal. Also, the platform only offers one base currency (USD) with which you can trade. So you will have to exchange your euros on the platform during the deposit to dollars. Fortunately, this happens automatically, but in our opinion this is a flaw in our review. We believe that direct trading in euros should also be possible.
Cons
High rates for forex trade;
Withdrawing money is slow and expensive;
Only trade in USD.
Can eToro Be Trusted?
An important aspect of any trading platform is reliability. As a novice investor looking for a broker, you naturally want to know whether eToro is reliable. It's about your own hard-earned money and you don't just deposit it somewhere. In this part of our eToro review, we answer the question of whether eToro is reliable.
eToro has been around since 2007 and has therefore been active on the financial market for over 10 years. They have millions of customers around the world. This makes the platform one of the market leaders in this field. That gives confidence.
Is eToro Regulated?
One of the most important factors in determining whether or not a broker is reliable is its licensing and regulations.
There are currently three regulated companies operating under the eToro brand in three jurisdictions: eToro (Europe) Ltd, registered in Cyprus and the Cyprus Securities and Exchange Commission (CySEC), license No. 109/10, eToro (UK) Ltd with UK registered, regulated by the UK Financial Conduct Authority (FCA), license FRN583263 and eToro AUS Capital Pty Ltd, registered in Australia by the Australian Securities and Investments Commission (ASIC), Financial Services License No. 491139. Australian and UK-based eToro act as agent, with (Europe) Ltd as executing broker.
eToro is regulated in three countries and thus has the proper licenses to conduct their business. As a regulated broker, eToro must adhere to strict rules to keep your funds safe. One of the most important rules here is that the customers' money must be kept in a separate account. This means: separate from the company account. On their site you can read the following:
“We keep our clients' funds and assets in a segregated account so that clients' funds and assets are segregated from our own assets. Such segregation of accounts is monitored both internally and externally. We only work with reliable payment institutions and payment providers.”
Your money is therefore kept safe if something happens to the company itself. In addition, there is a guarantee fund from the regulator, which insures clients' money up to $20,000. Up to this amount, your money is therefore neatly protected in the unlikely event that something goes wrong.
If we summarize the above information:
♦ Active for more than 10 years;
♦ Millions of customers;
♦ One of the market leaders;
♦ Regulated by CySEC and FCA.
Then we can only conclude that eToro is reliable.
Is Demo Trading Available on eToro?
As a novice investor, it is useful to be able to test the platform without risk. eToro offers a free demo account with $100,000 play money for this, which allows you to get started undisturbed and to try out all functions at your leisure.
How Do I Open an eToro Account?
Opening an account is hassle-free and completely digital. You can easily register with your e-mail account or with your Apple, Facebook or Google+ account. After that, you can immediately access the trading platform and start trading with a $100,000 demo account. If you want to go ahead and invest with real money, you need to verify your identity and place of residence by uploading the required documents:
Proof of identity : a copy of your passport or personal ID;
Proof of Residence : A copy of a utility bill or bank statement.
Then a short investment quiz is shown to see if you have enough basic knowledge to start trading or investing.
How to Deposit Money into Your eToro Account?
There are several ways to deposit money into your eToro account. You can easily deposit money into your eToro account via iDEAL. The money is usually in your investor account within a few minutes. When you deposit money for the first time you can choose:
iDEAL;
Credit/debit card;
Fast transfer;
Sofort;
Bank transfer.
From the moment you deposit money for a second time, you can choose some extra payment options:
Skrill;
Neteller.
The minimum deposit with which you can start trading with eToro is currently $50 (at the time of writing this is ~42 euros). You can simply deposit euros with, for example, iDEAL at eToro. However, a small exchange rate of 50 pips is charged.
Example:
Initial deposit: EUR 10,000.
EUR/USD exchange rate: 1.1189, Deposit in USD: 10,000 * 1.1189 = 11,189 USD.
Deposit in USD (minus conversion fee) = (1.1189 – 0.0050) * 10,000 EUR = 11,139 USD.
Buying Stocks via eToro
Buying stocks with eToro is very easy. You only have to go through 5 steps and you can buy your first share in 5 minutes.
Enter your desired share in the search bar at the top;
At the top right, click 'Trade';
Enter your desired amount and leverage;
Click on 'Open transaction';
Finished! Your shares will be added to your eToro portfolio.
How to Cash Out Winnings at eToro?
Cashing out your winnings is very simple. You just have to click on 'Withdraw money' and enter the correct amount. Then click on 'Submit application' and your money will be paid out (usually within 5 days). The minimum amount you can withdraw at a time is $30. The money will be paid out in the way you deposited.
So if you deposited via bank transfer, the funds will be returned to that bank account. If you have transferred via PayPal, your payment will also be received there.
Sometimes, people want to have a payment made to a different account, via a different payment method or that the name differs. As a result, it can take an unnecessarily long time before the money is in your account. So pay attention to this.
Fees for Withdrawing Money from eToro
The fee for withdrawing money from eToro is currently $5. In our opinion, this is one of the biggest negatives of eToro. Our strategy is not to pay out every month, but every quarter or every year, for example. This way you save some extra money.
Spread Сosts on CFDs
The costs for trading and investing at eToro are in the spread and the overnight fee. You do not pay a commission on trading shares and ETFs.
The spread is the difference between buying and selling. And the overnight fee is what you pay if you want to keep your position open overnight. These spreads and fees differ per market.
For example, if we want to short the S&P500 index (sell it because we think it will fall), then for a $250 position with 10x leverage we would pay $0.23 overnight and $0.68 over the weekend. This only applies if we want to keep that trade open for longer than 1 day. The costs are all automatically settled, you don't have to do anything yourself. eToro is 100% transparent about the costs, so you will never be faced with surprises.
eToro Desktop Experience
The eToro social trading platform is completely online and focused on ease of use rather than complexity. Both less experienced clients, as well as more experienced traders, can appreciate the simplicity of the platform. The charts are surprisingly full-fledged, with 66 indicators and numerous drawing tools. Almost all common tools for technical analysis are included.
We were pleasantly surprised by the extensive possibilities of the graphs. A nice addition is that you also have the option to choose a dark theme and you can follow multiple graphs at the same time in one window. Our desktop eToro experience was therefore smooth and pleasant.
eToro Mobile App Experience
The eToro mobile trading platform is available for iOS and Android. The app is available in 21 languages. The mobile platform has the same great functionality as the web platform. It makes good use of mobile features such as push notifications and screen gestures. For example, you can swipe left and right in your portfolio to access charts or open a new trade.
Social Trading and CopyTrading
eToro has a patented Copy Trading system, a unique feature of the eToro platform, which revolves around social investing . You can compare it a bit with Facebook for investors. Anyone who makes his or her profile public will have their own profile page on which your results and trades are visible to the other traders and investors on the platform. Of course, the exact numbers and amounts of the trades remain hidden, but followers can see the profit percentages and how successful someone has been during a certain period.
The most surprising thing about this whole feature is that you can simply directly copy the trades of successful traders. This can of course be done manually by simply opening the same trades, but also fully automatically. When copying, you use part of the money in your account to open the same trades as the person you are copying. In this way you instruct eToro to use part of your account to open the same trades as the investor you selected. Past performance is in no way an indication of future results and should not be used as the basis for your investment decisions.
Finding a suitable trader or investor is very easy and goes through a filter system. There are a number of filter options for this, such as location, account verification status (it only makes sense to copy investors whose account is 'verified', as these are real people instead of 'bots'), average risk score, investment products, etc.
You can also make your strategies public on the platform yourself. When your transactions are copied, you will receive a small fee per copied transaction. If you are a successful and active trader, this can be a good way to earn extra money.
eToro Customer Service
The best and fastest way to connect support service is through the eToro Customer Service Center.You can get in touch here via the excellent live chat, or open a ticket and receive a response at a later date. The live chat and ticket system are available 24 hours a day, 7 days a week. Do you have questions? You can also contact the help center . Here you will find detailed answers to the most frequently asked questions. Phone number: 1-800 778 439 For media inquiries and public relations, please send an email to: pr@eToro.com.
eToro Trading App for Android and iOS
The Android and IOS eToro customer experiences are positive. In the Google Play Store, the app gets a 4.2/5. The eToro trading app is a great continuation of the desktop app.
It is noticeable that they have paid as much attention to the trading app as to their platform. Everything is clear and well-arranged, and the functions are easy to use.
eToro Trading Academy: Free Online Trading Course
eToro also offers a wide range of trading and online trading information through the eToro Trading School. The following options are available:
► Live webinars with trading tips;
► An interactive eCourse (free trading course);
► Trading videos;
► podcasts.
These sources of information can all be found for free in the Trading Academy and represent excellent added value for serious traders and investors who want to significantly improve their skills.
eToro Pros
+ Trading US stocks, including fractional parts;
+ Possibility to connect to auto-following deals of the best managers;
+ CopyTrader;
+ For Asset Managers over $500K commission = 2% of assets;
+ Acceptable spreads and leverage up to 1:30;
+ Terminal and social network with traders chat available via Web browser;
+ Convenient application and exchange for trading cryptocurrencies.
eToro Cons
- For non-US clients, this is essentially a dealer: you do not acquire ownership of assets, you bet on the future rise/fall in asset prices, while when buying real shares, eToro acts as a fully regulated sub-broker.
- Has a brokerage license in Cyprus.
- Quotes of suppliers of prices are not always market-based, there are slippages.
Conclusion
eToro is a convenient, technologically advanced platform and chat for trading, auto-following and communication with the community. The terminal is conveniently implemented via a web interface. eToro is one of the largest social networks for traders in the world, therefore it has a reputation as a reliable CFD broker. Commission-Free Stock Trading: Whenever you open or close a leveraged CFD position, you pay no commissions, markups, maintenance or management fees.
eToro is a very attractive online broker and crypto exchange , especially for the novice investor. eToro's incredibly user-friendly platform, the social aspect of the whole thing, and the ability to start as a complete layman are definitely enough reasons to make eToro one of our favorite platforms. We are personally a big fan of the eToro Trading Academy, where we have been able to learn a lot about everything that has to do with investing and trading in an accessible way. Apart from a few negatives, our eToro experiences are fine. We therefore advise everyone to create a (demo) account, so that you can discover the platform at your own pace and explore all the possibilities.
Disclaimer
There is a risk involved in investing in stocks and CFDs. CFDs are risky instruments. 79% of retail investors lose money when trading CFDs. You should always consider your own skills before trading. Only invest with capital that you are willing to lose. Past performance is not an indication of future results. The content on this page is for informational purposes only and does not constitute investment advice.
