Well, they had to really.
Over the last few years eToro has been on a mega marketing push to promote it’s cryptocurrency trading offering. Which to be fair was one of the best out there. eToro, offered a lot of cryptos and was often the first to market with new coins.
But, as the FCA is banning cryptocurrency trading derivatives from January 2021, they will need to go back to good old forex trading.
However, whatever the margin rates, one of the worst things about eToro is that they only settle trades in USD, so even if you trade Lloyds shares, which are listed on the London Stock Exchange in GBP. eToro will give you a value and P&L in USD.
So eToro make money by widening the spreads (which is the equivalent to commission) and on lots and lots and lots of foreign exchange transactions.
It’s completely ridiculous, and don’t really make eToro a serious broker for serious traders. More of a tyre kicker for new traders to see if they can make some money before either giving up or moving on to better broker.
If you’re still interested in trading forex after than, then here are the forex piars that eToro has reduced the spreads on:
|Currency Pair||Previous Spread|
New Typical Spread*
Richard founded the Good Money Guide (previously Good Broker Guide) in 2015 and has been a broker for 20 years most recently at Investors Intelligence and previously a multi-asset derivatives broker at MF Global (Man Financial). Richard started his career working as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson) after interning on the NYMEX oil trading floor in New York and London IPE in 2001 & 2000.