EToro is a brokerage company established in 2007 and operates in the state of Cyprus under permits from international bodies to monitor the integrity of the financial operations that take place through the firm. Examples of these agencies with regulatory oversight on eToro are CVSEC, FCA, MiFID, ASIC. This shows that the company operates according to high standards in all its investment operations. It is no surprise that it has won many awards in recognition of its efforts.
EToro operates in various aspects of the commodities markets. For example, the company provides contracts for difference (CFD) in commodities, indices, bonds, stocks and metals such as gold and silver. Its cryptocurrency trading platform is an easy-to-use setup that simplified trading activities. The firm also provides investors with the ability to trade shares of the largest companies in the world.
Investment Tools for Everyone
EToro is growing fast due to an array of modern and advanced suite of investment tools built for various markets. The uniqueness of the platform stems from the fact that every investor can participate in exchange activities irrespective of their experience. This is why it boasts user base of more than 9 million customers from 200+ countries.
The investment firm can rightly be described as a social networking platform for traders that incorporates trading and copying tools. Its site is characterized by ease of navigation. The copy trading feature allows users to follow any trader of choice with good trading records.
In other words, to participate and make gains from eToro, the trader must not have trading skills. They can simply tap from the skills of very good traders through the copy trading system employed by eToro. Everyone is a winner because traders that are copied by other users are compensated while inexperienced traders get exact result that professionals get.
Various Type of Accounts
EToro provides different types of accounts for its customers. The company has a diverse investor base and gives each account advantages to motivate users. Beginner investors and those who are experienced and with financial clout are enabled by the platform to realize their investment objectives. It caters for all classes of investors irrespective of the financial instruments that they are interested in.
The demo account is available for all new users to enable them try trading on eToro without risking their money. This way, they can practice on the eToro platform and hone their skills before using their money to trade. The demo account is for beginner traders and others who have not yet traded on eToro.
It enables them to train and learn the correct trading strategies that works for them on the platform. The volume of funds in this account is 100,000 USD. It is advisable that the user should not waste the fund but utilize it appropriately in developing good trading strategy.
It is an account that is offered to traders who basically want to trade with real money. The minimum amount needed to trade on it is $200 ($50 for Australia). The concept behind this is to provide all the tools to trade assets manually or through copy trading.
The client has access to all the bulletins, data and information about the market movements. Retail accounts vary depending on the choice of the investor. The limitation stems from the restriction on leveraging to protect the funds of such traders.
According to eToro, retail accounts,
“receive certain protections such as coverage by the Investor Compensation Fund and recourse to the Financial Ombudsman Service. Furthermore, they receive negative balance protection and margin closeout restrictions.”
This account is meant for users that have the requisite experience and skills in trading. These would have passed some basic tests to prove that they have the capacity to trade assets on the eToro platform. With such expertise comes less protection in that such users would have access to high leverage trading with its associated risks.
However, eToro works hard to protect all its clients and even in extreme market conditions, tend to extend the absorption of losses to professional clients also. The great thing about the social trading aspect of eToro is that users who are not too sure of their strategies need not risk their funds unnecessarily by trading on their own because they simply have to copy the professionals. Professional clients have leverage of 1:400
Premium Members (eToro Club)
This account is granted to professional and distinguished members. In this account, the customer gets a special benefit of direct entry to the trading room and an account manager assigned to the user. According to the company,
“As a club member we aim to provide you with outstanding personal service while helping you navigate our wide & diverse range of assets such as thematic CopyPortfolios, ETFs, Stocks, Crypto and more”
Some of the features of this membership are:
- Pay less (or nothing at all) on conversion fees when you make an investment.
- Invest in stocks with zero commission. It is worthy of note that eToro is the only European financial services entity that charges zero commission on stocks.
- Another feature is that the user could increase their available capital with a credit line* at very low rates.
- Expert support on investments by the eToro team ensures that the investor has access to in-depth analytical tools and the latest news to help them make the right investment decisions. The platform also has plans to initiate expert consultation with financial advisors on demand. This feature will likely come on board in 2020.
- Access to exclusive in-depth market analysis. This is research results of the eToro in-house team with expert tips from the leading industry platform. How would you like to be among the first to learn about new asset introduced in the market? This is possible through eToro Club membership.
- How About joining the exclusive VIP events as a user? According to the company,
“Participate in some of the fintech industry’s top events while attending as our special guest. Enjoy complimentary VIP tickets to eToro-sponsored sporting and cultural events throughout the year.Diamond members are invited to the annual eToro Diamond Gala event — an ultra-exclusive multiple-day event at a luxury venue with special guest speakers, packed full of entertainment, education and valuable networking opportunities.”
eToro provides services that are in compliance with the beliefs of Muslim investors through its Islamic Account. Traders who use the Islamic account are charged zero roll-over interest and zero commission on account management. No additional commission is charged on rollover for more than 24 hours. The only revenue that the company makes from such accounts is on spread, which the difference between the buying and selling price of the asset.
To access this account, the user needs a minimum trading deposit of $1000 and proof of identity.
Trading Platforms Supported
The eToro trading platform is compatible with and can be accessed across all devices such as mobile and desktop. It is a platform that possesses wide technologies and an excellent display. It is distinguished by its ability to trade from anywhere in the world without limitation since unlike many exchanges, there are no governmental restrictions due to compliance issues on eToro.
“Discover eToro’s intuitive and innovative trading app. Trade and invest anytime, anywhere, and alternate between your laptop, tablet or mobile device with ease.”
EToro Open Book
On eToro, the trader has ability to communicate with other traders to benefit from their trading decisions and extensive experiences. This is especially so when the trader is being copied or followed. This feature is distinctive because it makes interaction easier among traders and creates a social signal for trading.
The eToro Open Book has a large display to provide customers with all the necessary information that helps them in carrying out their investment operations. Aside from knowing what trading decisions a trader made, the platform is working on giving the followers insight on why such decisions were made.
eToro provides investment various assets based on CFDs. These include bonds, stocks, commodities such as oil, metals such as copper, silver and gold.
The investment options and products eToro offers:
77 cryptocurrency CFDs, 47 currency pairs, 1,500+ shares, 19 commodity/index CFDs. eToro is different from other brokerage companies; the company prefers to provide everything that it can provide to help all its customers to do their investment work to the fullest
Deposits and Withdrawals
To start trading on eToro, the minimum amount required is $200 ($50 for Australia). It relies on different payment platforms to conduct deposits and withdrawals.
Customers can make deposits through e-wallets such as Skrill, Paypal, Neteller, MoneyBookers and WebMoney. This can also be done through bank cards such as Master Card, Visa Card or direct bank transfer.
To make withdrawals click on the withdrawal button, then fill out the electronic withdrawal form, after which the customer can withdraw their profits using the same channel they used in making deposits.
Rewards and Promotions
EToro does not always give any prizes or offers to its users due to the restrictions and obstacles established by the law but the investor can benefit from an offer to become a VIP through which they can enjoy huge discounts. The bonus may reach 100% on the spread, and up to 2% on administrative expenses.
EToro provides great customer service. This is in the framework of the company’s emphasis on communication with its customers and to respond to queries and challenges they may have in their investment drive. The clients can use a request form or chat to get to the customer service if any problem arises.
There also is an email channel through which the support is accessed. The FAQ section is available if an answer is needed to some questions.
Educational & Training Section
eToro has many educational tools that it provides to all its clients such as training courses, seminars, and educational videos to teach trading methods and strategies. The educational section has 11 basic programs on a PowerPoint-type presentation. This program will take clients through the basic concepts of trading.
Interested users would be able to understand how to read charts like candlestick and many others. With verification through the submission of IDs, the user would have access to in-depth training videos that would furnish them with higher trading skills.
The platform is approved by Cyprus Securities & Exchange Commission (CySEC) and European Securities and Markets Authority (ESMA). Its credibility also earned it a license from the Financial Conduct Authority (FCA).
On the trading platform, users can copy selected traders with good trading records and get the same result. New traders who do not have enough skills generally can copy experienced ones. The editor’s recommendation is the best place to start. When the user signs up, the editorial team of eToro usually sends the list of some of the best traders that are worth copying. These are selected based on their track record and risk management abilities.
You can create a portfolio by copying since eToro gives you an option of copying many traders as much as possible. Diversification of investments reduces your risks as well as gives you greater options on the traders to copy.
Commissions and Fees
Unlike other brokerage firms, eToro does not charge trading or deposit fees. Fees are mainly based on CFDs overnight/weekend position either short or long orders. 50 pips will be charged when you withdraw money in other currencies except the USD. $10 will be charged if a user has not been active for 12 months.
There is zero commission on stocks for users in Europe. eToro offers lots of commission-free asset like crypto CFDs, (90 free commission pairs) indices CFDs, stock CFDs, and ETF CFD. As we can see from the site, you can get exactly what you are paying for with the eToro commission-free stock investing. This means there are no markup fees, no management and ticketing fees.
Security of Assets
With incessant news of hack on exchanges, eToro has worked hard to ensure that its platform is safe without compromising the funds of the users. Individual and corporate accounts are protected with several layers of security.
Users are requires to prove their identity before becoming verified. Every account can be strengthened with a two-factor authentication (2FA) and limits login attempts. The platform is also secured with encryption technology that makes data of customers and communications private and safe.
Pros and Cons
EToro has many advantages and features that are beneficial to its users likewise some disadvantages aren’t of any good to its users. The following are the list of its pros and cons.
- The Copy trading feature allows you to follow any trader of your choice with good trading records.
- Its analytical tools such as charts aids users in making a good investment decision.
- An exchange you can trust, it meets the regulatory demands and rules of the European financial institutions. (CySEC, ESMA)
- The investor is never alone as there is a vibrant community of like-minded investors whose primary objectives are to make profit through social signal, interaction and copy trading.
- $25 withdrawal fee is quite high compared to many other brokers.
- Since it does not offer API interface or VPS hosting, eToro does not allow third-party software connection such as trading bots.
- There are limits to in-house investment news for its users. What it only offers is an alert if a digital asset is bullish or bearish. It would be a great idea to have constant stream of updates for every investment class even though this may take away from the social signal aspect of the platform.
- In trading cryptocurrencies on EToro, there is a marginal difference between spot price on the platform compared with Bitcoin-based platforms. So it is cheaper trading crypto on a platform such as this, though it lacks copy trading features like eToro.
EToro is one investment platform as good as they come, especially with regards to its transparency. The company has made a name and has continued to attract thousands of traders and investors daily making it one of the fastest-growing investment platforms.
Irrespective of your investment or trading experience, there is something for you on eToro. If you have not yet signed up, you can do that here.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% 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.