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Social and copy Trading

 

eToro is an online trading platform that was founded in 2007 by the Assia siblings and their friend David Ring in Tel Aviv, Israel. Formerly known as RetailFX, eToro is the pioneering online broker for social trading. Their Openbook social trading platform in fact changed the nature of the way beginner online traders can trade the financial markets. It made the markets accessible to everyone, no matter what their level of experience by creating a user-friendly environment and allowing traders to copy the trades of other traders’ strategies automatically.

eToro’s trading platform is also unique in the sense that it also allows experienced traders within the eToro social community to become “leaders” and earn from leading their “followers”. eToro initially started off as a broker only offering forex trading. Today, the broker has expanded its product offerings to include other assets classes such as cryptocurrencies, commodities, stocks and market indices.

eToro is very well known due to its advertising of sporting events such as football matches and its marketing of public transport in the UK and other countries.

General Information

Official Site:https://www.etoro.com

Regulated By:ASIC, CySEC, FCA

Foundation Year:2007

Headquarters:Kanika International Business Center 7th Floor, 4 Profiti Ilia Street Germasogeia, Limassol, Cyprus

Min Deposit:$200

Max Leverage:1:30

Publicly Traded:No

Deposit Options:Credit Card, Moneybookers, Neteller, PayPal, Skrill, Webmoney, Wire Transfer

Withdrawal Options:Credit Card, Moneybookers, Neteller, PayPal, Skrill, Webmoney, Wire Transfer

Tradable Assets:Currencies, Commodities, Indices, Stocks, Bonds, Crypto

Trading Platforms:cTrader, Currenex, eToro Platform, Keystone, Marketspulse, Mirror Trader, MT4, MT5, Tradologic, Zulutrade

Commission on Trades:Yes

Fixed spreads:No

Trading Desk Type:Market Maker, No dealing desk, STP

OS Compatibility:N/A

Mobile trading:N/A


 

76% of retail investor accounts lose money when trading CFDs with this provider. 
You should consider whether you can afford to take the high risk of losing your money.

Investor Protection & Regulations

“Regulated by FCA, CySEC and ASIC, highly reputable and strict regulatory budies.”

The eToro brand is managed by different companies in the eToro group of companies. In the UK, eToro is managed by eToro (UK) Ltd and as such comes under the jurisdiction of the Financial Conduct Authority (FCA). The company is registered with FCA with the license number FRN 583263. As an FCA regulated financial services provider, traders trading through the eToro (UK) Ltd portal are covered under the Financial Services Compensation Scheme (FSCS).

On continental Europe, eToro is managed by eToro (Europe) Ltd, a Cyprus Investment Firm (CIF). The company is regulated by the Cyprus Securities Exchange Commission (CySEC) with CIF license number license # 109/10. For traders who trade through eToro (Europe) Ltd, their funds are protected under the Investor Compensation Scheme.

For traders in Australia, the eToro brand is managed by eToro AUS Capital Pty Ltd. It is regulated by the Australian Securities and Investments Commission (ASIC) with the license number 491139.

Reliability

“A broker which enacted the latest encryption technology, they offer risk management tools and they abide by strict regulatory requirements.”

They have a section on responsible trading, which they seem to take very seriously. They provide free guidance to novices while experienced traders are given a range of risk management tools to help them manage their trading risks better. In addition, eToro as a fully regulated broker abides by all the strict regulatory requirements imposed by the regulatory bodies.

To accomplish safety of clients’ funds and data protection, which of course is an important element of being regulated, the broker uses the latest encryption technology and security system to protect its servers from any intrusion. In addition, all the clients’ funds are kept in Tier 1 banks.

Finally, eToro operates with full transparency with regards to its social trading platform. All the profiles of the “leaders” are available for all to see inclusive of all their trading performance data. eToro also does not have any hidden fees. It is all laid out clearly on their website. eToro also take steps to inform its clients of the additional risks that they will undertake when trading in cryptocurrencies. For example, traders are informed of the fact that cryptocurrency trading is not covered under the Financial Services Compensation Scheme and the Investor Compensation Fund scheme.

Tradable Products

“Covers 6 different asset classes including currency pairs, commodities, ETFs, stocks and market indices with an impressive selection of cryptos. You can trade all of these as CFD’s, some can be traded as underlined assets including cryptocurrencies, stocks and ETF’s.”

As for the markets covered by eToro, they cover a variety of asset classes such as currency pairs, commodities, cryptocurrencies, ETFs, stocks and market indices. You can trade all of these as CFD’s, some including indices, commodities, currencies and indices are only traded as CFD’s. The others can be traded as underlying assets too eg. where you actually take ownership of the asset rather than speculate on the price movements. This includes cryptocurrencies, stocks and ETF’s. Read more about the tradable products in eToro here.

The latest addition to the eToro trading platform is the ability of the platform to let you trade in cryptocurrencies with ease. Crypto trading is categorized into 3 categories, individual coins, crypto crosses and crypto-currency crosses. In total, you have selection of 30 different mixes of cryptoassets to trade.

For currency pairs, you have a maximum leverage of 1:30.

The following list shows some of the frequently traded assets on the eToro trading platform.

Commodities Stocks ETF’s tickers
Oil APPLE ACWI
Copper GOOGLE AGG
Natural Gas AIG AOA
Silver AON AOK
Platinum BARCLAYS AOR
Gold BP BOND
Currencies BHP GDXJ
EUR.USD BMW GLD
EUR.GBP OSRAM IEFA
EUR.JPY HELLA IEMG
USD.CHF EON IJH
USD.JPY AIRBUS IJPEL
USD.CAD SAF IPAL
USD.GBP HERMES ITOT
GBP.JPY SANOFI Indices
GBP.CHF PEUGEOT DJ30
GBP.AUD VIVENDI DAX30
GBP.NZD OHL FTSE100
AUD.JPY REPSOL HANG SENG
AUD.CAD Crypto SPX500
AUD.NZD Bitcoin NIKKEI225
CAD.CHF Litecoin CHINA50
USD.TRY Ethereum FRA40
EUR.SEK Bitcoin Cash AUS200
NOK.SEK Ripple NASDAQ
USD.SEK Dash STOXX
GBP.CAD Ethereum Classic
USD.PLN Cardano
IOTA
Stellar
EOS
NEO
Zcash
Binance Coin

*Data is taken from broker’s website at time of writing

Account Opening

“Simple to open an account with eToro. They only offer one account type. You must verify your identification, as of course this is a regulated brand.”

To keep things simple among trades, eToro only offer one type of trading account. The minimum deposit for this account varies from country to country. The amount required ranges from $200 and $500. To open a live account, you simply need to fill out the registration form or sign in with your facebook account. Once you have registered with eToro, you also need to verify your account to comply with anti-money laundering regulation. Verification covers the following:

  • Provision of Government issued ID
  • Phone number verification
  • Provision of Proof of address

Deposit & Withdrawals options

“One business day to process a withdrawal request. Make withdrawals on credit/debit cards, paypal, e-wallets and wire transfer. Withdrawal fee of $25 applies and minimum deposit is $50.”

It is important to note that you have to verify your account before you will be permitted to make any deposits or withdrawals. For the convenience of eToro’s clients, eToro supports the following payment methods:

  • Credit Cards
  • PayPal
  • Neteller
  • Skrill
  • WebMoney
  • Giropay
  • Yandex Money
  • Wire transfer

The minimum amount that can be withdrawn is $50 and eToro charges a withdrawal fee of $25. Withdrawal requests take one business day to be processed.

Web & Desktop Trading Platforms

“Copy trading platform featuring strategies, that also supports individual trading. The platform is web-based so can be logged into from anywhere.”

Past performance is not an indication of future results. Trading history presented is less than 5 complete years and may not suffice as basis for investment decision. This is not investment advice.

eToro uses a proprietary platform which they have built in house and are constantly working on. The platform allows for individual trading as well as social trading from a single trading screen. There is no software to download and to install. You can access the platform directly using your web browser.

To trade individually, simply click on “Trade Markets” in the function menu on the left side of the trading screen. Once you have done that, you will be presented with a list of available assets grouped according to categories. Click on the selected asset to call up the trading chart. Alternatively, you can just click on the “Buy” and “Sell” button located on each of the asset icon. Self trading option comes with detailed charts that include a wide selection of indicators and customizable parameters. You can view sentiment indicators and select on assets to add to your watchlist.

IF you wish just to copy trade, click on “Copy People” to call up the list of traders that you can copy from. Just click on the individual picture to view their profile in more details.

As mentioned earlier, eToro also allows you to potentially earn by being a leading “Investor” where you can gather a following of copy traders who will follow your trades. By becoming a popular investor, you will get to earn a 2% management fee on your followers’ portfolios.

There are 4 levels in the investor program. It starts with the Cadet level and goes all the way up to the Elite level. Below is the summary of the benefits and requirements of each level.

Cadet Level

Featured in eToro Marketing

Minimum avg equity: $500

Responsible trading

Minimum Copiers: 1

Minimum AUM: $200

Minimum time in level: 2 Months

Rising Star Level

Featured in eToro Marketing

Fee Free Withdrawals

Minimum avg equity: $1000

Responsible trading

Minimum Copiers: 10

Minimum AUM: $40,000

Minimum time in level: 2 Months

Champion Level

Featured in eToro Marketing

Financial Times Subscription

Fee Free Withdrawals

Minimum avg equity: $5000

Responsible trading

Minimum Copiers: 10

Minimum AUM: $150,000

Elite Level

Featured in eToro Marketing

Platinum Account Manager

Financial Times Subscription

Fee Free Withdrawals

Minimum avg equity: $20,000

Responsible trading

Minimum Copiers: 10

Minimum AUM: $500,000

Minimum time in level: 2 Months

Mobile Trading Platforms

“Mobile trading apps available for both iOS and Android. You can access all the key features of the web-based platform including browsing traders, strategies and assets, managing your account and executing trades.”

eToro has provided its clients with a mobile-friendly version of its social trading platform. Depending on the operating system of your mobile devices, you can download the app for free at Google Play Store and Apple App Store. Here you can access all the key features of the web-based platform including browsing traders, strategies and assets, managing your account and executing trades.

Trading Features

“Copy other traders strategies and trading positions or self trade using the eToro platform.”

Perhaps one of eToro’s most remarkable products which is certainly pioneering is the CopyTrading product. It allows you to copy the trades of other more experienced traders or have them copy you. As a follower you can invest in two types of CopyPortfolios: Top Trader Portfolios which is built from the best performing traders on eToro, and Market Portfolios that group together a basket of CFD stocks, commodities or ETFs under one chosen strategy.

At the same time, eToro’s trading platform also lets you receive real time notifications regarding the markets and key movements throughout the day.

Commissions & Spreads

“Commission free trading on all asset classes, eToro charges a unified spread on CFD trading and when buying the underlying asset, rollovers are based on LIBOR rates”

eToro is very transparent regarding the trading costs. The broker doesn’t charge any commissions but instead a spread on the Bid/Ask quote. The spread varies according the type of asset traded. For currency pairs, the benchmark EUR/USD is charged a spread of 2 pips. For cryptocurrencies, the spread is based on a percentage rather than pips. This starts at 0.75% for Bitcoin and goes up from there. If you are buying and selling cryptos through the eToroX wallet you will incur other fees too including wallet fees and blockchain fees. Fees do not apply when trading individual cryptocurrencies without leverage. Fees do apply to leveraged BUY positions, as well as to all SELL positions, and to all crypto pair positions. For CFD trading of stocks and ETF’s, the spread on each side is 0.09% also for underlying assets. Additionally they charge no management fees. Indices charge 100 pips on AUS200 benchmark. Stocks, ETFS and in fact all asset overnight prices are charged according to LIBOR rates. This is a benchmark rate that represents the interest rate at which banks offer to lend funds to one another. Furthermore the daily fee/credit is multiplied 3 times for positions carried over Friday nights. The fees will be charged at 17:00 New York time for any position open at this time.

Bonus & Promotions

“No bonuses due to MiFID regulations.”

Due to the MiFID regulations, eToro does not offer its clients any kind of incentivized bonuses.

Customer Support

“24/6 support through telephone and support ticket. Response time is not instant with ticket. We had to wait a while.”

As for eToro customer support, the broker has translated its website into 15 different languages. The support service is available 24 hours a day from Sunday to Friday. Contact with the support team is by means of support ticket or telephone or fax. There is also live chat support at eToro.

The broker also has an active social media presence and can be followed and contacted through Facebook, Twitter, Instagram, Linkedin and YouTube.

Research

“Have real time news feed and they send push notifications on the market. They also have a blog with one or two daily pieces of market news or analysis and an earnings calendar.”

The broker provides an economic calendar and a blog with daily updates on the market highlights. The blog posts are not massively informative of market movements and traders may need to find another source for detailed analysis.

On the trading platform itself, you can also access the real time news feed. This is a live commentary created by the traders and investors at eToro. It gives others traders the opportunity to ask questions and comment.

Education

“Traders education is limited to several videos, this section of the site is very empty and could certainly do with some beefing up.”

With regards to the trading education, eToro has provided an “Interactive Trading Courses” section. The courses are divided into 2 categories, Trader Course and Investor Course. The course is quite limited and certainly not in-depth for traders that want to learn how to trade the markets. Additionally there is a platform guide which walks you through the platform use in 5 quick steps.

Trading Experience

“A platform that seems to genuinely meet the needs of both beginners and experienced traders. Simple to use, for people that want to engage in copy trading or self trading. A great way for expert traders to earn a second income through building up their own group of followers.”

The eToro trading platform suits both novices and experienced traders. For novices, their trading activities may be directed more towards trying to copy the investor traders. As for experienced traders, their trading activities will most likely be geared towards winning over as many followers as possible to capitalize on the 2% management fee earned by the investor. They can do this by marketing themselves and building up followers through the News Feed.

FAQ

Is eToro regulated?

Yes, eToro is regulated in the UK, Cyprus and Australia.

Where is eToro based?

eToro maintain offices in London UK, Sydney Australia, New Jersey USA, Israel and Limassol Cyprus.

How does eToro make money?

eToro makes its money by charging its clients a transparent spread on the Bid/Ask quote.

How do I deposit in eToro account?

Deposits can be done by wire transfer, credit cards or web payment portals.

What is the min. deposit for eToro?

The minimum deposit requirement at eToro depends where you are based but usually ranges between $200 and $500 and can even go up to $10,000.

How do I withdraw money from eToro?

Withdrawal of funds is done through the same methods used for making the initial deposit eg. ewallets, credit cards and wire transfers. They take a day to process and are charged a minimum of $25.

What is the max leverage in eToro?

The maximum leverage at eToro is 1:30 for traders.

How do I open an account with eToro?

The simplest way to open an account at eToro is to sign in using your Facebook account. Otherwise you can create an account by filling out a registration form and supplying your verification documents.

Does eToro use MetaTrader?

No, eToro does not use the MetaTrader trading platform. Instead the broker uses a proprietary platform.

Pros: Cons:
  • Highly regulated broker (FCA, CySEC and ASIC)
  • Innovative trading platform
  • Wide range of assets to trade with
  • Ability to earn 2% management fee as an Investor trader
  • Spreads are higher than average
  • Does not have the MetaTrader platform

eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFD assets.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% 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.

Cryptoassets are highly volatile unregulated investment product. No EU investor protection.

This content is intended for information and educational purposes only and should not be considered investment advice or investment recommendation.

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