- Commissions and Fees
- Platforms & Tools
- Social Trading (CopyTrader)
- Education and Resources
eToro is a global online brokerage with built-in social trading features. Many traders are attracted to eToro for their “copy” features which allow you to replicate the trades of other traders. Read our review to see if it makes sense to use eToro and copy other traders.
eToro.com is a global online brokerage enables users to trade a variety of financial instruments including stocks, ETFs, indices, forex, commodities and cryptocurrencies via CFDs (contract for difference). The intuitive mobile platform along with the social trading features have caused the popularity to flourish worldwide. The platform claims to have over five million users worldwide in over 170 countries executing over 250,000 million trades to date. eToro is currently not available for U.S. customers, but is working on making it happen soon.
Originally launched as a forex trading broker by brothers Yoni and Ronen Assia and their partner David Ring in Tel Aviv, Israel in 2006, the platform has since expanded to include stocks, commodities and cryptos. 2010 was a pivotal year as eToro rolled out their social network called Openbook which enabled the CopyTrading function allowing users to follow and autotrade the specific trader’s trades on the platform. Additionally, they rolled out their mobile trading platform on Android, which sparked growth like wildfire. The platform has evolved into a comprehensive one-stop shop for traders wanting instant access to some of the most popular global trading instruments.
eToro is a brokerage platform operating under two entities eToro Europe Ltd and eToro U.K. ltd. eToro Europe Ltd. is based in Limassol Cyprus and registered as a Cypriot Investment Firm (CIF). It is regulated by the Cyprus Securities and Exchange Commission. eToro U.L. Ltd. is based in London and regulated by the Financial Conduct Authority (FCA).
Commissions and Fees
Due to the global nature the eToro platform, certain countries and regions may have different policies, pricing and processing schedules. While eToro technically has “no-commissions” or “ticket-fees” on most trades, they make their fees from the spreads and additional fees like USD LIBOR for U.S. stocks. Here are the minimal spread fees. It’s best to confirm the rates specific to your country.
Forex trade spreads can range from two-to-five pips on the most popular major pairs like EUR/USD, USD/JPY, USD/CAD, GBP/USD and AUD/USD. As the pairs get less liquid, the spreads widen up to 20 pips or more for more exotic pairs like EUR/SEK.
Cryptocurrency trades are “commission-free” when opening a position, but (like forex) they make their fees on the spread. The spread can range from 1.5% for Bitcoin (BTC) to 3% Litecoin (LTC) to 5% on less popular (and liquid) currencies like NEO. The spreads vary during periods of heavy volatility and liquidity. BTC spreads can range from 100 to 225 pips. Therefore, it’s wise to consider using limit orders.
Commodities trade spreads range from two pips for copper to 45 pips for gold trades.
Stock and ETF trades have a 0.09% minimal spread fee for both buy and sells.
Stock and ETF trades held overnight (CFD trades leveraged or sold short) incur additional daily fees of 6.4% + one-month LIBOR for buy orders and 2.9% + one-month LIBOR on sell orders. (IE: A $1,000 value buy order results in a $0.22 daily fee. A short-sell position results in a $0.12 daily fee.)
The minimal account starting account balance ranges from $200 to $10,000 (residents of Israel) depending on your region. However, a demo account is provided free-of-charge just for registering as a user. There are no software fees. There is a $5 inactivity fee if no trades are made during 12-months. There are also various withdrawals fees based on the region.
eToro Platform Features and Tools
The platform is accessible on desktop as well as mobile on Android and iOs. There is no direct-access trading and the order entry is suited for investors and newbie traders who don’t require sophisticated tools. The navigation is very intuitive and fits like a glove for most experienced traders with a very shallow learning curve. The demo is identical to the live account platform, which makes it easy to learn.
The eToro Procharts has various types of charts including candlestick, bar and line with time frames ranging from 1-minute to monthly. It has drawing tools that enable trend lines and basic indicators from moving averages to Bollinger Bands. Multiple charts can be opened on the workspace to show multiple time frames on a single asset or multiple assets to compare performance and any combination of each.
Users can click news for access to headlines and articles relating to the underlying symbol. The newsfeed also allows for keyword searches or a general stream of headlines that you can configure by symbols, themes or markets.
Traders can create watchlists of their favorite markets and trading instruments. It’s pretty fluid and impressive having such a variety of diverse products all in a single window. You can also set up watchlists of traders on the platform to follow their performance and trades. Ultimately, you may consider the CopyTrade function if the style and strategy fits yours preferences.
eToro renames leverage as ‘risk level’, which can range from 2x to 400x depending on the underlying financial asset. The max risk level on stocks range between 5x to 10x. Currencies range from 50x to 400x. ETFs have a max 5x and commodities range between 10x to 100x. There is no leverage provided for cryptos. With this kind of leverage, it’s crucial that newbies understand they can owe more than they have in their account if margin calls trigger.
eToro’s Trading Academy
From live webinars to e-courses and training videos, eToro provides a nice array of learning content to get newbies situated with the platform. The material doesn’t dive too deep into specific methodologies, that’s on the user. However, the instructional content allows for quicker acclimation to the platform.
The order entry windows have a comprehensive set of user-configured conditions. The ability to place limit orders with conditions like risk level (leverage) along with pre-set profit and stop losses are very convenient. There is no ‘direct-access’ on stocks as all orders are routing through eToro based on their own spreads, which will different from other platforms since they factor in their fees.
Users can create and customize their own watch lists or use the pre-set watch lists like the most active stocks or benchmark index stocks like the S&P 500 or Nasdaq 100. Stocks can be linked to charts so simple click on any symbol in a watch list can quickly update the chart along with all your indicators and studies.
This is one of the most unique aspects of eToro. While many fintech’s have tried the social network approach to markets, eToro set up a system that is equally rewarding to both the following and followed traders. This is the main platform differentiator coupled with the convenience of mobile trading.
This function enables users to allocate up to 25% of their accounts to autotrade, mirror, the trades placed by selected Popular Investors. This win-win situation enables followers to mirror performance while the traders receive various fees and benefits based on the number of ‘Copiers’ autotrading their trades. Users can also apply to be a Popular Investor for an opportunity to earn fees based on level rankings from Cadet to Elite.
There are two types of CopyFunds. Top Trade CopyFunds include top performing traders for specific strategies and mirrors their trades, whereas Market CopyFunds are based on financial assets only, not traders. These are constructed by eToro’s investment teams. Minimum investments are $5,000.
eToro has 24/5 customer service via online/mobile chat. Visitors and existing users have access to the help center and ability to open tickets. The website operates in 14 different languages.
eToro Platform Differentiators
eToro stands out due to the social tools incorporated into the platform. There are very few established companies that offer social trading features and “Copy trading.” That said, traders should be careful to not become overambitious in their pursuits of profit. Copy trading is not always as simple as it sounds.
eToro also covers a wide range of assets, including stocks and Forex.
What Type of Trader Is eToro Best For?
eToro is an exciting brokerage platform that takes a direct approach to social investing. This platform is great for beginners to seasoned traders and investors, who are educated in the underlying financial assets they are trading. While the learning curve is shallow thanks to the tons of education and instructional content, it’s easy to get over confident with the leverage.
- One-stop trading access to a diverse range of products
- Great free demo platform to test out first before using real money
- CopyTrade is simple and win-win for both copier and trader
- Mobile app is amazingly fluid and intuitive
- Easy deposits and fund transfers
- Constantly improving platform
- Confusing fee schedule
- Spreads can get wide