eToro review

eToro is a well-known Israeli fintech company and a social trading broker, established in 2007. It has registered offices in Cyprus, the United Kingdom, the United States, and Australia. Not only can members of eToro open and close their own positions for assets such as currencies, stocks, cryptocurrencies, and ETFs, they can also mirror other members by automatically copying trades. Much of the platform’s value proposition is the ability to socialize with other traders, delve into their profiles and strategies, discuss the markets, and replicate their tactics.

Where eToro shines

eToro made its name through its social investing platform, an innovative tool that allows users to copy the trades of other investors. The broker has more than 20 million users in 140 countries worldwide — and the U.S. is now on that list.

Regulation & Reputation

In 2019, the company reported operating in 140 countries and having 20 million users. The firm is regulated by the CySEC authority in the EU; it is authorized by the FCA in the UK, FinCEN in the United States, and the ASIC in Australia. With eToro, clients' funds are kept secured in tier 1 banks, and all of their personal information is guarded under SSL encryption.

In March 2021, it announced that it is planning to become a publicly traded company through a reverse subsidiary merger with FinTech Acquisition Corp V (NASDAQ:FTCV), a Special Purpose Acquisition Company (SPAC) backed by former Bancorp CEO Betsy Z. Cohen. Following the IPO, eToro will operate as eToro Group Ltd.

Trading Platform

eToro's platform is intuitive and easy to use even for beginners. It is available in many languages, where social trading is also available. The beginner traders can use the ‘social investment network’ to follow other investors to copy their trades and use their strategies. In addition to being able to copy trades and trade independently, eToro also allow their clients to earn extra income by becoming a “Popular Investor”. The top traders can earn a monthly salary, commission and cheaper transaction costs for their own trades. This is not something many brokers can offer.

The web trading platform has a clean design and great functions. The eToro mobile trading platform is available for both iOS and Android to allow full mobility and access to the financial markets at the same time.

Markets and products

At eToro, you can trade CFDs and forex, as well as real stocks, ETFs and many cryptos. Traders can trade with 53 currency pairs, 256 ETFs, 12 stock indexes, 14 types of commodities, 37 cryptos, and 2000 types of stocks from all over the world.

All non-leveraged long positions in stocks, ETFs and cryptocurrencies are traded as real assets. This means that when you buy equities, ETFs or cryptos without any leverage (i.e. leverage is set to one), you will buy real stocks, ETFs and cryptos and not CFDs.

eToro also has some unique features, such as social trading (CopyTrader) and Smart Portfolios (previously called CopyPortfolios).

Research

For some popular stocks, you can find recommendations like analyst consensus (buy/hold/sell), average price target, hedge fund sentiment and insider trading sentiment. In some cases, you can also read the analyst reports.

Some basic fundamental data on stocks is available. This includes the profile of the company and some very basic indicators and ratios such as P/E, EPS, dividend yield and beta. You can also sign up for a daily market analysis newsletter, in which you get a useful list of market highlights.

eToro's charting tool is quite good and you can use many, around 70 technical indicators. We liked that charts are automatically saved, so you don’t have to waste your time setting up your indicators time and again.

How does eToro make profit?

The main way eToro makes money is through the spread that applies on trades, weekend and overnight fees, inactivity fees, currency conversion fees, and withdrawal fees. As the number of trades being carried out on the eToro platform has increased dramatically – from roughly 27 million in January 2020 to around 75 million in January 2021 – all of these tiny fees add up since millions of users are paying them on a daily basis.

eToro also makes money through what is known as a market maker model, which is very typical among brokers and trading providers. However, they uses both STP and NDD features, which is considerably different from a typical, pure market maker. A pure market maker is simply in a position where they profit if you lose. Consequently, this can get some traders not to trust the broker. But as far as we know, eToro is safe to use — meaning that eToro should not influence your trade or its outcome in any way.

Fees

eToro offers free stock and ETF trading, while forex and CFD fees are low. Note that with the free feature, you're buying the real stock, not a CFD product, and you cannot use leverage.

eToro’s fees are based entirely on spreads that may rise and fall with market conditions.

Account opening

Account opening at eToro is seamless and very fast, and the minimum deposit is relatively low for most countries. In most cases the required eToro minimum deposit is $200.

The account opening process is hassle-free and fully digital. It is fast too, as we were able to open an account within one day.

Deposit and withdrawal

eToro allows only USD accounts, which means that funds in other currencies might need to be converted by eToro to USD. A convenient way to save on currency conversion fees is opening a multi-currency bank account at a digital bank (Starling, Transferwise, Monzo, Revolut, Chime, Curve, Monese, N26, Aspiration and more). There are a lot of deposit options, however, not all of them are available in every country: Bank transfer, Credit/debit card, PayPal, Skrill, Neteller, China UnionPay, Klarna/ Sofort Banking.

eToro has a $5 withdrawal fee, to cover some of the expenses involved in international money transfers. Withdrawal options are the same as the funding options: you can withdraw money using bank transfer, credit/debit card or electronic wallets, similar to other CFD brokers.

After 12 months with no login activity, a $10 monthly inactivity fee will be charged on any remaining available balance. No open positions will be closed to cover the fee.

Accepted Countries

eToro accepts traders from Australia, United States, United Kingdom, France, Germany, Norway, Sweden, Italy, Denmark, United Arab Emirates, Kuwait, Luxembourg, Qatar and most other countries.

Traders can not use eToro from Iran, Turkey, Japan, Canada, China, Hong Kong, Singapore, Saudi Arabia, India, Madagascar, Macao, South Africa, Egypt, Thailand, and more.

Is eToro blocked in your country? Click here.

Why would you choose eToro?

eToro prides itself on being one of the world's leading social trading platforms, and providing plenty of options for investors and traders. Its commission-free fee structure makes it one of the least expensive ways to trade in US stocks, although there is a small foreign exchange margin to pay.

Go to eToro now and take a look: