What is eToro?

Founded in 2006 eToro bills itself as the world’s ‘leading social trading platform’. It provides users with the chance to trade stocks, ETFs, currency pairs, cryptocurrencies and contract for differences. At the time of writing, they have been more than 300,000,000 trades opened on eToro and more than 20 million users. They offer various products and services including an online trading platform, CFD trading, and crypto trading, as well as a copy trader platform which allows you to emulate the trades of more experienced investors. The platform has grown rapidly over the last year and is currently planning an IPO in the second half of 2021.

eToro Mobile App

The eToro trading app can be downloaded onto your smartphone or any other mobile device. It gives its 20 million registered users the ability to browse stocks, make trades and use all the features you’ll get from the desktop on the go. The easy to use, intuitive, interface opens up trading to everyone providing a clean, smooth user experience from one end to the other. From the outset eToro set out to ensure this app could overcome some of the problems with other trading apps by delivering a comprehensive, yet accessible and easy to use solution. They have largely achieved although it can look complicated for newcomers.

eToro App Pros

  • Social trading: The ability to copy the trades of some of the best investors on eToro gives you the chance to leverage the skills and experience of highly experienced traders.
  • Accessibility: The low minimum funds make it more accessible for regular people. It allows you to trade on your terms and within your means.
  • Cryptocurrencies: With 15 leading cryptocurrencies it offers a chance to get involved with the rising crypto scene.
  • Leverage: Allows you to choose your own leverage.
  • Ease of use: An accessible app makes it easy to trade on the go from any device.

eToro App Cons

  • Slow withdrawals: Withdrawals can be slow, especially for people used to instant financial transactions.
  • FX fees: Funds must be held in USD which can leave you facing fees any time you use any other currency.
  • Minimum deposit: The minimum deposit is slightly higher than some of its competitors which could be seen by some as a barrier to investment.
  • Educational material: Considering many of its users will be first timers, the platform can be a little confusing and education material is not as good as it could be.
  • Withdrawal fees: You’ll have to pay to withdraw funds.
  • Trader statistics: Statistics in the copy trader feature about traders are not as clear as they could be which makes it slightly more difficult to pick a trader.

 eToro Trading Account

The eToro trading account is fast to open and offers the ability to trade in stocks, commodities, currencies, ETFs, Indices and cryptoassets. It also gives you the chance to use a copy trader feature which allows you to copy the moves of a trader. It’s a low effort solution which theoretically allows you to experience the same benefits as someone who has been at this game for years.

Those who have an appetite for risk can also choose contracts for differences. Compared to other competitors, such as Freetrade, Plus 500 or Active Trader, it offers a great mix of affordability, functionality and choice. However, because you can only hold funds in USDs, an FX fee will be charged any time you buy a stock in GBP.

eToro Investing Account

eToro’s investing account provides a fairly comprehensive service with the benefit of 0% commission on stocks. This means the broker will charge a commission when opening or closing a position. However, a conversion fee will be incurred for converting funds to USD. This can be a problem because even when you buy stocks in GBP you’ll end up incurring an FX conversion fee.

eToro offers some of the most valuable stocks in the world such as Facebook and Apple. You can view the live prices of available stocks and quickly open or close positions. If the company you invest in pays dividends, these will be paid into your eToro account.

It’s a comprehensive service offering speed and ease of use alongside free investment insurance which is given automatically to all eToro customers. This protects up to one million GBP, AUD or EUR in the event of eToro’s insolvency.

eToro Pricing, Charges & Fees

The big headline for eToro is that it does not charge any commission or management fees. This gives it an advantage against traditional brokers and is broadly in line with other low-cost online trading and investment sites such as Freetrade and Plus500.

However, it does have a number of other charges depending on the product and service. There is a conversion fee for non-US stocks and a flat withdrawal fee. Conversions fees can be a pain as you can only hold funds in USD which means any time you buy a stock in any currency other than USD, you end up paying a fee.

Some trades may also incur overnight fees and spreads. If you leave your account unattended for 12 months, they will also start charging a monthly charge of $10 on any remaining balance. They will not close any remaining positions to cover the fee.

eToro CFD Trading

Contracts for differences are a high risk/return of trading which offers many options which would not be available through traditional investing. It is a contract which pays the difference between the cost of the opening and closing trades. It’s a flexible way to bet on the movement of the markets over a very short time. Going long or short means you’ll effectively be making a bet on the direction of the market. If you’re right, you make money; if you’re wrong you can lose money. CFDs are notoriously risky and 75% of investors lose money. Before you start, you should understand and accept the risks.

Etoro allows you to apply leverage to increase your exposure without extra capital and offers the advantage of a multi regulated platform in several territories. A demo account allows you to start off by safely trading CFDs without any real risk. You can also benefit from the experience of others using a copy trader tool. In terms of fees, the platform will charge spreads and overnight fees.

As with the others, conversion fees can be a constant pain. The platform only allows you to hold funds in USD which means you can end up paying FX charges even when you buy GBP stocks.

eToro Forex Trading

Currency trading is the largest market in the world and, with global currencies experiencing considerable levels of volatility, there are plenty of opportunities for traders to make good gains if they judge the direction of the market correctly. Etoro offers a fast, streamlined platform which lets you trade in popular currency pairs such as EUR/USD, GBP/USD, AUD/USD, USD/JPY and USD/CAD.

Opening an account is free and there is no commission or management fees. Etoro will charge a fee for withdrawing your money and converting currencies and spreads. You can only hold funds in USD, so fees are charged for any other currency including GBP.

These are a little higher than some of its online competitors, but people choose it for its copy trader feature which allows you to mirror the trades of an experienced forex trader. It’s a great way for a newcomer to instantly trade like a pro.

eToro Copy Trading

The star attraction of the eToro offering is copy trading. It works in much the same way as someone copying the smartest kid in the class for a test. They recruit experienced traders who will let people copy their trades. They get paid every time you copy a trade they make. Once you reach a certain level and demonstrate a successful track record, you could eventually apply to become one of these traders.

The app makes it possible to choose from a top performing trader and copy everything they do. When they make a trade, you make a trade. If they succeed so will you. In theory it allows you to mirror the stellar performances of top forex traders without having to get a degree in finance. It’s a much more comprehensive approach than others which might simply mirror the wider market. This picks out individual traders who have been selected for their performance.

One word of warning though. Just because someone has been good in the past doesn’t mean they will be in the future. Forex is a difficult game and even the best in the business get stung from time to time. It simply means they have a better chance of being successful than someone who is entirely new to the game.

Fees are low, but you’ll find yourself having to pay FX fees any time you buy in a currency other than US dollars.

eToro Cryptocurrency Investing

Cryptocurrencies represent one of the fastest growing markets out there. As they move towards the mainstream, interest is growing and some are experiencing dramatic growth. This means there are real gains to be had if you make the right choice. Conversely, of course, the market is highly volatile and you may see sharp losses within a short space of time. This is not for the faint hearted. The platform offers one of the widest selection of leading cryptocurrencies such as Bitcoin, Ethereum, Ripple and many others.

The only fees charged by eToro come in the form of spreads which vary from one currency to another. For example, spreads are 0.75% on Bitcoin rising to 2.9% on ADA.

eToro Bitcoin (BTC) Investing

Bitcoin was the first cryptocurrency and is by far the largest. It accounts for almost two thirds of the entire market and has been showing some dramatic moves in recent times. Interest from mainstream investors has given the cryptocurrency renewed momentum with many analysts predicting great things for the future. On the downside it is volatile and risky. Investors are used to coping with rapid rises and steep drops.

You can use eToro to quickly buy and sell Bitcoin. You can either trade between other cryptocurrencies such as Ethereum or move between traditional (fiat) currencies. You’ll be charged spreads of 0.75% but will have an additional withdrawal fee of $5 if you take out your funds. Their process is fast and transparent. There are no hidden fees.

eToro Ripple (XRP) Investing

Ripple (XRP) is one of the up-and-coming cryptocurrencies and generally vies with Ethereum for second place in the market. It works slightly differently from bitcoin and has been adopted by some major financial institutions to make faster international payments. The fact that it has some real-world applications for big banks is one reason why some traders are excited by the future.

You can view the latest price for Ripple and trade between other cryptocurrencies and fiat currencies with spreads of 2.45% making it significantly more expensive than Bitcoin or Ethereum. However, with no hidden fees, this is considerably more transparent than many other cryptocurrency exchanges.

eToro Trading Platform

The eToro trading platform and app offers a wide range of products to trade in. It’s free to download and you can use it via your desktop or mobile device. It gives you access to 2,000 assets and gives you access to the wisdom of the crowd via social trading. This lets you see how other investors have behaved and copy them accordingly. The platform is free to download and there are no management fees. However, it does have fees for making deposits or withdrawals.

Compared to other similar platforms such as Plus 500 or Trading 212, it offers a high-powered comprehensive platform. However, its real point of difference comes in the social trading and the ability to copy other investors. The big downside is the restriction to holding funds in USD which can leave you facing FX fees when buying stocks in GBP.

eToro IPOs

An initial public offering happens when a company decides to go public and lists on a stock exchange. It is used by companies to raise capital which can put them on the next level and offers a chance for investors to get in on the ground floor of an exciting business with plenty of room to grow.

With eToro you can invest in IPOs with zero commission and is also widely expected to be launching its own IPO in the second half of 2021 to capitalise on the rapidly growing online trading market.

Fees are low but UK users might be surprised by FX fees for buying stocks in GBP. This is because all funds must be held in USD.

eToro International Investing

You can buy shares from around the world with zero commission making this a great way to get involved in some of the biggest companies in the world. Zero commission means no additional fees which go to brokers. However, trades are only managed in dollars and, if you want to move from one currency to another, they will charge a conversion fee. They also have a flat $5 withdrawal fee.

Prices are much lower than traditional brokers thanks to the removal of management fees. However, other online trading platforms will match the zero-commission rate and may have lower overall fees.

eToro Free Share Dealing

One of the standout claims from eToro is that you can buy and sell shares for free. It does this by removing the middleman in the form of broker management fees. However, that does not mean everything is free of charge

There are conversion fees for international stocks other than USD. This is because all funds have to be held in dollars. They also charge spreads for cryptos when you close a position which is the difference between the buy and sell price.

Overall, its offering is quite attractive, but you can only buy stocks or hold currency in USD which is somewhat less flexible than other counterparts. However, the removal of broker’s fees does make it much cheaper than a conventional broker.

eToro ETFs

An exchange traded fund groups together a basket of assets as one tradeable fund. Each one follows a specific strategy and is created by financial institution using a team of experts to meet its goals.

With eToro you can go long by buying the underlying asset or you can use CFDs to take a short position, use leverage, or buy fractional shares. With leverage, you’ll be able to boost the power of your capital. For example, you could invest in an ETF that costs $500 with a fraction of the capital. It’s a more flexible approach than others, although it can increase your risk exposure. Funds are only held in USD so you might find an unexpected exchange fee if you buy in sterling.

eToro Copy Portfolios

Imagine having thousands of the best traders working just for you. That’s how eToro sells its copy portfolios. It allows you to invest in two types of portfolios:

  • Top portfolios comprise the best and most sustainable investors on eToro.
  • Market portfolios bundle together CFD stocks, commodities and ETFs under a single market strategy.

They help to maximise growth opportunities while minimising risk by creating what they say is the next generation of diversified portfolios. The strategy has been developed specifically for eToro so there isn’t anything else exactly like it. There are no management fees for this, but other fees such as withdrawal fees, spreads and overnight fees may apply. FX fees apply when buying any stock in a currency other than USD.

eToro Education & Analysis

The education and analysis section is a good option for anyone who is new to the world of online trading. It includes market news, analysis, market guides, a trading school, video tutorials and podcasts. There is also a dedicated section describing the concept of social trading. Much of this content can be accessed instantly for free although you can register for access to webinars designed to build your knowledge. The platform does have some useful information and will help newcomers get started. However, it is less comprehensive and offers less real time market information than many of its competitors.

eToro Professional Account

As the name implies the professional account is for elective professionals who can pass a suitability test. This will remove restrictions on leverage and allow you to trade in a more aggressive way than retail clients. On those rare occasions when your equity goes into negative balance eToro will absorb those losses and reset your account to zero, as with the retail account.

However, you will waive protections that come under the retail client account such as protections under the investor compensation fund, recourse to the financial ombudsman. As with the retail account you can only hold funds in USD so you may find yourself facing an FX fee if you choose anything else.

In short this is an account for people who understand the market better and are able to take certain risks.

eToro Investment Insurance

Clients benefit from free investment insurance purchased from Lloyds of London, this covers you for up to one million GBP, EUR or AUD, depending on the region in the event of eToro’s insolvency. The policy covers cash, CFD positions and securities. However, crypto asset trading (non CFD) are not covered.

The service gives you three layers of protection.

  • If eToro is insolvent the liquidator will manage assets and distribute them to the clients.
  • If you’re under FCA or CySEC regulations you’ll have certain compensation schemes such as the FSCS or ICF, which cover a certain amount of your cash in the event of an insolvency.
  • The insurance policy described above. This is much more generous than the FSCS which only covers capital up to £85,000.

eToro Alternatives

When it was set up eToro was providing an alternative to traditional brokers. It planned to open up investment products which might previously have felt off limits to retail investors. Their offering of a simple online account with zero commission was immensely attractive. Now, though, they also face challenges from a host of other online trading platforms such as Freetrade, Plus500 and Trading 212. Each offers the same heady mix of a simple online trading app with zero commission, but they differ in terms of the products they offer, the stocks you can invest in and their fees. With one you choose will very much depend on your experience, appetite for risk and personal taste.

eToro Versus Trading 212

These are two of the biggest names in online trading. However, they differ significantly in their approach. While eToro focuses on social investing, Trading 212 goes for zero commission and robo trading. Trading 212 is aimed much more at beginners and provides a simple solution which is great for learning the ropes. Its interface is simpler, and it has a much larger library of educational resources than eToro.

On the other hand, eToro is for people with a bit more experience. While they do give a nod to newcommers it allows people to get involved in more complex and risky products.

Both are commission free but eToro charges spreads for cryptos and overnight fees on cryptos and also charges a flat fee of $5 for withdrawals.

eToro Versus Plus 500

Launched in 2007 Plus 500 focuses only on CFDs. It has tight commission and zero fees, but its limited focus on these high-risk products makes it unsuitable for any investors looking for more general or low risk options.

Plus 500 offers more currency pairs, more stocks and more and commodities than eToro. However, for a more comprehensive service, eToro has the edge. Unlike eToro, Plus500 also does not offer a copy trader option.

For those looking for high risk CFDs therefore, Plus500, would be the better option. However, those wanting a platform with more features and a more rounded investment approach will focus on eToro.

eToro FAQs:

As with any online trader your capital is at risk. However, eToro does operate in a multi regulatory environment under the FCA in the UK, CySEC in the EU, ASIC in Australia.
Unlike conventional brokers they do not charge management fees. However, they do make money through a variety of other charges such as spreads, conversion fees and overnight fees for capital which is held overnight.
Overall, eToro offers an excellent app according to most store reviews. Customers like it for its flexibility, performance and free downloads, but often complain about the complexity compared to others.
eToro is regulated and approved to offer all its products. However, these products do come with a risk.

Short selling can be done by entering an agreement with a broker who promises to lend an asset to you. You can then sell it for the current market price and buy it back in the future to return to the broker. If the market goes down, you’ll make a profit.

You can short sell using contracts for differences. When you go short you agree the terms with eToro beforehand. They are required to give the trader a price based on the accurate market conditions. So, if the market goes down, you’ll make a profit when eToro buys back from you.

Yes. If you buy an asset from a company which pays dividends, you’ll receive them in your account.
No. The platform absorbs stamp duty costs.
Yes, in some states. It opened its doors in the US in 2018 and has been gradually rolling out ever since. In those states where it is not yet supported you can sign up to use the virtual portfolio.

About Our Reviewer

This review was last updated 24th March 2021