eToro is a multi-regulated FX and CFDs broker famous among investors due to its sophisticated social trading platform. Moreover, it has a built-in web trading platform with many trading tools and $500,000 availability of assets.
It is an Israeli fintech company with multiple regulations to provide services in several countries. It is regulated under two tier-1 jurisdictions and one tier-2 jurisdiction making it a safe broker for FX and CFDs trading.
How to start trading with an eToro broker?
Only adult citizens can trade assets. It is straightforward to open an account on the eToro broker website. You need to go to the Registration section and select Create a new account. When registering with Google or Facebook, some fields are filled in automatically.
Next, an email with a link will be sent to the email address specified during registration with eToro. You will need to click on it to confirm the creation of the profile.
How do I complete my eToro profile correctly?
- First, you only need to provide actual data — a fictitious name or surname is not allowed.
- Secondly, you will have to go through additional verification, but more on that later.
When filling out the questionnaire, the trader indicates:
- Address of residence, registration.
- Experience in trading, investing.
- Financial or economic education.
The section indicating trading experience can be supplemented with interesting facts. They are unlikely to be checked, but detailed information about yourself will expand the list of trading opportunities. For example, instead of 1-5 types of investments, indicate 20, and instead of the number of investments of $500, indicate $2,000.
In addition to trading experience, we strongly recommend that all traders take a test of knowledge of the basic rules and principles of trading. And also choose the tools for the job. Even if the questionnaire is 100% filled, the investor will not start trading. Full account verification is required.
So there are five simple steps to get started with eToro:
Step 1. Register at etoro.com.
Step 2. Pass verification by providing factual information about yourself.
Step 3. Open a trading account with eToro.
Step 4. Make your first deposit of $200 or more or the equivalent in another currency.
Step 5. Start trading on the broker’s website.
Customer support at the eToro broker
If the client has any questions related to the work of eToro or the withdrawal of money, he can contact the consultants of the trading platform. In addition, the site has an FAQ section with a vast database of questions and answers that traders most often ask. It’s called eToropedia, similar to Wikipedia.
- Online chat
It is the fastest way to get in touch. It works around the clock from Monday to Friday. Saturday and Sunday are days off.
Year of foundation
eToro was originally named RetailFX. It was founded in 2006 but renamed eToro a year later. The platform was created by the Yoni brothers and their partner David Ring. The founders set an ambitious goal to launch an open and user-friendly online trading platform. It should be distinguished from competitors by a friendly interface and suitable for investors of any level. This is how eToro was born.
The broker is geographically divided into three companies located in different jurisdictions:
- eToro (Europe) — CySEC regulator (Cyprus, l. No. 109/10)
- eToro (UK) — FCA regulator (UK, l. FRN583263)
- eToro (AUS) — ASIC regulator (Australia, license number 491139)
Brokerage activities are carried out following the European MiFID directive.
Key broker features
eToro does not charge subscription fees. But if the client hasn’t used an account for a year, he will have to pay $10. Instead of a commission for each financial transaction, eToro adds a small spread to the market quotes. All spreads vary depending on the terms and conditions of the trading broker.
USD/CAD — three pips
USD/JPY — two pips
EUR/USD — three pips
EUR/AUD — seven pips
EUR/CHF — five pips
Overall, eToro’s fees and rates are outstanding and can compete with other brokers.
Stock & ETFs fees
- Management fees: no
- Rollover fees: no
- Ticket fees: no
- Additional broker fees: no
- Cryptocurrency transfer fee: 0.005 unit
- Spread: minimum 0.75%
- Currency pairs: starts from 1 pip
- Commodities: starts from 2 pips
- Indices: starts from 100 pips
- Stocks and ETFs: stats from 0.09%
- Cryptocurrencies (CFDs): starts from 0.75%
- Overnight fees: no
- Deposit fee: free
- Withdrawal fee: $5
- Currency conversion fee: 50 pips
- Inactivity fee: $10 per month after 12 months of inactivity
Based on our findings, spreads are higher in eToro than other brokers. However, it does not have any commission or overnight fees in regular trading accounts.
- Available stocks in nine categories.
- Lots of stocks to trade from 17 different exchanges.
- 24/7 trading in cryptocurrencies.
- Low trading cost in crypto trading: 0.75% for BTC.
- 31 available instruments in the commodity section, including gold, oil, copper, coffee, etc.
- Ability to perform or use social trading for commodity pairs.
- The broker offers currency pairs trading with more than 50 pairs, including majors, minors, and exotics.
- The broker provides the ability to trade personal accounts or take copy trading services from other traders through the eToro platform.
There is a wide range of stock indices available to trade today. Some of the most popular indices among traders include:
- The Dow Jones Industrial Average (DJ30): launched in 1885, the Dow Jones is one of the oldest stock indices in the world.
- The S&P 500 index (SPX500): a widely followed index, it is generally seen as a broad representation of the US stock market.
- The NASDAQ 100 (NSDQ100) is a technology-focused index that tracks the 100 largest non-financial companies listed on the NASDAQ exchange.
- The FTSE 100 index (UK100): a collection of 100 large-cap stocks listed on the London Stock Exchange.
- The DAX 30 (GER30): this index tracks 30 major German companies trading on the Frankfurt Stock Exchange.
- The Nikkei 225 (JPN225): the Nikkei 225 is Japan’s premier stock market index.
- The ASX 200 (AUS200): the ASX200 is Australia’s blue-chip stock index.
- The fund allows you to invest in a group of assets in a single trade. It could be dozens of stocks pegged to the FTSE 100 or a basket of tech stocks.
- eToro hosts over 260 ETFs from a variety of sectors.
It’s understandable why investors flock to ETFs when building and diversifying their portfolios. With the commission-free pass offered by eToro, this is a great way to invest in a wide variety of different assets in just one investment.
The broker offers traders three basic instruments. Let’s consider them in more detail.
The platform is a common thing for any broker. On eToro Webtrader, investors can chat and correspond with their peers in real-time. However, if this is unnecessary, the user selects the “invisible” status and calmly goes about his usual business – monitoring the exchange rate.
We could recommend this platform to all novice investors. First, the menu contains only the most essential and valuable information for making deals because of the simple interface. You can connect to the web platform from anywhere in the world.
It is a unique social network somewhat reminiscent of Facebook. It brings together millions of traders from different countries and continents. Users can see what other traders are doing, what stocks they are buying and selling. Analyzing the actions of successful stock market traders, you can try different strategies and find your own.
All market participants see each other’s statistics in real-time. The successful experience of other traders allows you to make intelligent, well-considered decisions, guided by statistics and specific facts, rather than guesses and emotions.
eToro Mobile version
Mobile technologies have embraced many business areas, and securities trading is no exception. A smartphone or tablet is always at hand, which means that you can sell and purchase assets even on the way to work. The Google Play and App Store offer eToro mobile apps for accessing Openbook and Webtrader from a smartphone.
It is possible to purchase all assets in fractional terms. There is no trading in options, futures, IPO investments are also not provided. Since leveraged positions and short orders are executed as CFDs, all trades are subject to additional fees. More than 40 currency and 100+ cryptocurrency pairs are available for trading.
eToro focused on fewer account types to make the process simple. We have found only two account types in eToro for retail and professional traders during our review.
eToro retail account
- Holders can trade all assets manually or via copy trades.
- Balance protection is available under Investor Compensation Fund and recourse to the Financial Ombudsman Service.
- There are some limitations on the leverage for retail traders.
- Negative balance protection is available for retail traders.
eToro professional account
This account requires retail traders to pass a test to determine their suitability as experienced traders. Let’s have a look at the requirements to be a professional account holder:
- Investors should have a portfolio of more than $500,000, excluding property and cash.
- Investors should show verified trading history with positions of significant size.
- A trader should have previous experience in trading and work as a professional trader in derivatives, speculation, and trading.
Besides, professional account holders will also enjoy negative balance protection and higher leverage than retail accounts.
eToro Islamic account
Besides the two account types, the Islamic account focused on Muslims who strictly follow Sharia law. Traders don’t have to pay any interest within this account type, such as overnight fees.
eToro offers an Islamic account with a minimum deposit of $1,000. However, Muslim traders may have to pay additional commissions, account management fees, or broader spreads, and Muslim traders have access to interest-free leverage.
What else should you know about eToro?
The eToro trading platform is a unique combination of social trading, a user-friendly interface, and rich functionality for working with assets. Despite several positive characteristics, some of the nuances of the work can alert serious traders. Perhaps the main drawback of eToro comes down to the lack of taking trades to the market. In this regard, doubts arise about the reliability of quotes and a whole tangle of additional disadvantages: spreads, lack of scalping on the order book, questionable values of the charts. Therefore, a brokerage company’s services are unlikely to suit those who intend to engage in personal trading.
On the other hand, the eToro web terminal is straightforward to learn and will not raise questions for traders who are just starting to study the financial market. It remains only to verify the profile and select a user with good statistics from the list of traders. CopyTrader, a service for copying successful trades, brings additional income to talented traders and distinguishes a trading broker from similar services. Even if you have $200 on your account, you can provide yourself with stable earnings without wasting time regularly monitoring financial charts.