eToro is among the first results when you Google anything related to brokers, trading, or investments. In the last year, the platform has grown so much that today, it is among the undisputed leaders in the industry. The combination of a feature-stuffed investment platform, social trading network, and zero-fee investing opportunities will surely lure you into digging deeper and getting familiar with eToro.
This eToro review focuses on everything you need to know about this online broker. Discover the trading platform features, fees, and commission structure.
The platform is relatively new, having been established in 2007 to disrupt the trading niche. The company was among the first to introduce commission-free investing opportunities for various asset classes, including stocks, ETFs, cryptocurrencies, and commodities. Today, it follows its vision to allow anyone to trade and invest transparently and straightforwardly.
Over the years, eToro has developed a widely successful model that helps beginner investors copy the best and most profitable strategies. The social trading platform has gathered a community of engaged users from more than 140 countries who have, so far, conducted over 330 million trades.
eToro Trading Platform
One of the key distinguishing factors of the broker is its advanced multi-asset platform. It allows you to trade more than 2,000 assets, including stocks, cryptocurrencies, commodities, and more. Opening an account is an easy and straightforward process, while the fees are kept low or even non-existent. You can fund your account through various payment methods, including wire transfers, credit cards, and more.
The platform is suitable for both beginner investors and seasoned traders, bringing an intuitive interface and advanced features and functionalities. You can run the platform in your browser. However, you can also take advantage of the eToro mobile app, available for iOS and Android devices for convenient mobile trading.
You can test all of the features on eToro's investment platform risk-free with $100,000 in virtual capital.
Now, let's explore the most exciting features.
CopyTrader is undisputedly eToro's most prominent feature. It benefits beginner users and experienced traders.
The copy trading feature ensures that beginners basically have an experienced mentor to learn from and copy and make money for themselves. On the other hand, the traders you copy from getting paid directly as part of eToro's Popular Investor Program.
According to eToro, the average yearly profit of the 50 most copied traders for 2019 is 29.1%.
The best thing about CopyTrader is not that it allows you to copy the trades of the best, but that it is entirely free. You can start copying other traders and make money at no extra charge or hidden fees. However, there is an account minimum requirement of $200. In March 2021, they temporarily raised the account minimum to $500 due to massive new account requests.
The copy trader feature is easy to use. All you have to do is find the trader and the strategy you want to copy, choose the amount you would like to allocate, and click "COPY." And voila, you are duplicating their positions in real-time. You can switch to another strategy or just stop copying this one at any point.
Crypto on eToro
If you are still on the sidelines but determined to join the cryptocurrency trading revolution, then eToro is an excellent place to start. The platform is one of the most beginner-friendly choices for rising cryptocurrency traders. The reason is that it allows you to purchase close to a hundred digital assets, including Bitcoin, Bitcoin Cash, Ethereum Classic, and more, quickly and through a variety of payment methods.
However, we should clarify that, up until recently, eToro's customers weren't allowed to buy and withdraw cryptocurrencies to their wallets. Alternatively, crypto traders didn't own the cryptocurrencies as the digital assets were traded as CFDs.
On the bright side, eToro realized this was a significant downside and focused on fixing it. Today, depending on where you reside and the eToro platform you are using, you can, indeed, buy and withdraw cryptocurrencies to the built-in eToro wallet or your preferred hardware or software solution.
Beginners will love eToro's cryptocurrency trading offering. There might be better choices for more sophisticated cryptocurrency investors until the broker ups its game and starts competing with the top exchanges.
Contracts for Difference
To deep-dive into the topic, we should, first of all, understand how CFDs work. CFDs are complex instruments that allow you to engage in a deal to trade a particular instrument (security, index, FX, and more) with a CFD broker instead of buying the underlying security directly.
The idea is to make investing more accessible. Trading CFDs allows even traders with limited capital to gain great exposure in various markets and assets.
Among the key distinguishing factors of eToro are the smart CFD trading features. These include up to 30x leverage (don't forget that investor accounts lose money rapidly due to leverage trading), spreads as low as 1 pip for EUR/USD and USD/JPY, advanced risk management features, such as real-time alerts and customizable stop loss, and more.
If you want to get familiar with eToro's platform before funding your account, you can take advantage of a $100,000 demo account.
On eToro, you can trade CFDs on various assets, including currencies, commodities, indices, stocks, and cryptocurrencies.
Among the key factors that have made eToro so successful and popular in the industry are the low fees. eToro offers some of the most competitive rates in the copy-trading niche.
Stocks & ETFs
Stocks and ETF investments are commission-free. You can buy whole shares or fractions of the instrument. The lowest amount you can trade is $50.
Besides, there are no management or rollover fees. You won't be charged any additional broker, clearance, or ticket fees either.
In a nutshell, ETFs and stock trading on eToro is entirely free.
The only fee you will be charged is when you make a withdrawal request. This will cost you $5.
The trade spreads are also competitive. So, commission-free trading doesn't come at the expense of unfavorable spreads.
With crypto trades, things are quite different. Etoro customers who want to buy and sell digital assets should know that the process is a bit pricier due to unfavorable spreads and an added trading fee.
The spreads start at 0.75% (for BTC) and can go up to 4.5% (for IOTA). The commissions depend on the cryptocurrency. For BTC, for example, the fee is fixed at 0.0005 units, while for ETH, it is 0.006.
You can find the complete pricing policy for digital assets trading accounts on their site.
All-in-all, eToro's convenient digital assets trading feature comes at a pretty high cost. If you intend to trade only cryptocurrencies, make sure to check out some of the beginner-friendly exchanges like Coinbase, for example. For those interested in trading cryptocurrencies alongside other assets from a single platform, then the relatively high commissions shouldn't be too much of a deal-breaker.
The spreads for CFDs trades on eToro depend on the underlying security.
With the most popular currency pairs like EUR/USD, USD/JPY, and GBP/USD, the spreads range between 1 and 2 pips. With more exotic pairs like EUR/SEK, USD/TRY, and USD/ZAR, these can go up to 30 or 50 pips.
The spreads for CFDs on commodities start from 2 pips but can go up to 1 200 pips (for Cotton futures) or 20,000 pips for Palladium futures.
For indices, the spreads range between 100 and 1,200 pips. CFDs on stocks and ETFs incur a 0.09% fee.
Also, bear in mind that CFD positions that stay open overnight are charged a small fee relative to the position's value.
The fees also depend on your trading style (buying long or selling short).
There are also some other fees you should know about when considering opening an account on eToro.
For example, there is a universal $5 withdrawal fee. Bear in mind that after 12 months with no login activity, eToro will start charging you an inactivity fee of $10 per month on any remaining available balance.
Also, because the eToro funds are held in USD, if you decide to withdraw in another currency, you will be charged with the so-called "conversion fee." It starts from 50 pips and can vary depending on the chosen payment processing services and whether you are making a deposit or a withdrawal.
eToro Review Summary
The broker is among the top choices for both beginners and advanced traders. It brings everything you need to start investing in stocks, indices, futures, FX, and cryptocurrencies. Opening an account is as easy as it gets. And with the convenient mobile app, you can make money on the go.
The low or non-existent commission fees, packed with the minimum account opening requirement, make eToro the go-to choice for beginners and investors with limited capital.
The unique CopyTrader functionality allows eToro customers to "borrow the brain" of the best users on the platform and mimic advanced trading strategies backed by years of research at no cost.
Yet, the brokerage has some minor aspects of improving upon, but all-in-all, it is among the best service providers in the niche.
- Low trading fees
- Free stocks and ETFs trading
- Unique CopyTrader feature
- A massive selection of markets and assets
- Low minimum account requirement
- Quick and easy account opening procedure
- A $100,000 demo accounts feature
- High non-trading fee
- The crypto trading offering can be improved
- The customer service isn't top-notch
- Investment accounts aren't globally available