eToro Review: eToro are an online CFD brokers that focusses on social trading. eToro offers clients the ability to trade the global markets through USD denominated CFDs, and earn additional money by allowing other traders to copy their traders. eToro as also well known for being firm movers into new trading markets such as cannabis and cryptocurrency trading. The eToro website claims to have over 4,500,000 registered traders. As with all social trading networks you can earn money by being a leader or by following a profitable trader. A major downside is you can only trade in USD. 75% of retail investor accounts lose money when trading CFDs with this provider.
eToro Client Reviews
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My only problem is that they don't respond to queries
- Trading Platform 5/5
- Customer Service 1/5: They don't respond to queries
- Mobile Apps 5/5
- Spreads & Pricing 5/5
- Market Range 5/5
- Trade Execution Speed 5/5
- Added Value 5/5
(Trading forex with eToro for under 1 year on a weekly basis)
eToro was founded in Tel Aviv in 2007 by three entrepreneurs. Its initial focus was FX; however, the company has added other product types as it has grown. eToro has been through several fundraising rounds since formation which attracted more $160 million of venture capital. In 2018 the company was valued at US$800 million.
What makes eToro different?
eToro was conceived with the idea of simplifying investing and trading for both novices and more experienced traders. It was one of the first brokers to introduce social and copy trading and more recently it has introduced machine learning and data science techniques to create its own “Robo advisers”.
Why Choose eToro?
eToro has a hybrid approach to the markets mixing short term trading and longer-term investing the company has leveraged technology and innovation and it was one of the first major movers in cryptocurrencies, eToro claims to have 6.0 million users worldwide.
Pros and cons of eToro
|Invest and trade from the same account||High funding charges on leveraged positions|
|Large Cryptocurrency offering||A limited universe of other instruments vs peers|
|Fractional share trading available||Account opening and withdrawals can take time|
eToro is a privately held and unlisted company
Are there any other benefits of using eToro?
The eToro club provides members with access to additional services and trading tools.
eToro also offers fractional share trading and a series of managed portfolios.
Costs & charges
eToro’s charges vary by product, for example, unleveraged purchases of cryptocurrencies don’t attract any fees, whereas leveraged positions do.
How does eToro charge fees and what are they?
eToro charges overnight funding on all leveraged positions and CFDs at quite a hefty mark up over the interest rate benchmark, which is currently LIBOR. For example on a long, index ETF position, eToro charges an annualized rate of LIBOR plus 6.40%.
In terms of trading fees the only charge that eToro levies is the bid-offer spread
Non - Trading Fees
There are funding charges as mentioned above, as well as fees for FX conversions, movements of cryptocurrencies and withdrawals of money for a full schedule of fees see this link
How does eToro make money?
eToro makes money on client activity by capturing the bid-offer spread and also through overnight funding charges.
Opening an account at eToro
There is an online account application form on the eToro website, however, applicants will also need to upload ID and proof of address documents, to verify their account applications.
Proof of identity can be provided by a valid passport or photo driving license, and proof of address by a recent utility bill, bank or credit card statement etc.
How to open an eToro account
Go to the eToro website click on the sign-up button and submit your credentials. You can also sign in using your Facebook or Google ID. Once you have agreed to the eToro terms and conditions you can submit your details. You will also be asked to verify your account and submit your ID and proof of address. eToro asks you to scan and upload copies of these documents. You will also need to fill out an investment questionnaire as part of the KYC and suitability process.
How long does it take to open an eToro account?
If you submit valid documents online to support your account application, then your account should be open within two to three days, though this process may take longer while Covid-19 restrictions are in place.
Is there a minimum deposit for eToro?
The minimum initial deposit varies by geographic location and account type and ranges from as little as US$50.00 for an individual account up to US$10,000 for a corporate account.
How to get started trading with eToro
You will need to open and fund an account and sign into their trading platform then select the markets and products you want to trade or invest in.
eToro accepts a wide range of funding methods. To add money to your account you will need to login and click on “deposit funds” choose the amount and currency in which you wish to deposit, and select the payment method
How to add money to your eToro account
You can choose from a wide range of payments types and e-wallets
eToro accepts Visa, MasterCard, Diners, Visa Electron and Maestro cards and deposits can be made up to a maximum of US$40,000 or equivalents. Payments can be made in the following currencies USD, GBP, EUR and AUD
Debit and Bank cards
Once again eToro accepts cards from the major providers listed above and payments of up to US$40,000 or equivalents can be made using this method. Payments may be made in the following currencies USD, GBP, EUR and AUD
eToro accepts PayPal and payments of up to US$10,000 or equivalents can be made in any of the following currencies USD, GBP, EUR and AUD
eToro accepts bank transfers in USD, GBP, EUR there is no upper limit to the amount of money you can deposit using this method, however the transfer can take between four and seven days to reach your eToro account.
How to withdraw your money from eToro
You will need to login to your account and select withdrawals, note that funds can only be returned to the account from which they came using the same payment method.
eToro charges for withdrawals but has recently reduced this charge to a flat US$5.00 per transaction..
eToro now offers clients access to a withdrawal dashboard, allowing you to track the progress of any withdrawals you have requested. Note though that both debit/credit card withdrawals and bank transfers, can take up to eight days to get back to your bank or card account, compared to just one or two days for PayPal.
Trading Platforms & Mobile Apps
eToro has both desktop and mobile trading apps
What trading platforms does eToro offer?
The company has its own in-house multi-asset trading platform
Trading Platform Video Walkthrough
eToro Platform Video Review – Is the social trading platform any good?
eToro Trading platform Video demo review Transcript
Okay, good morning. Richard Berry from the Good Money Guide here. Today, we’re going to have a quick look at eToro’s trading platform. We’ve got a couple of thousand dollars in the account so we’ll put some real trades on, show you the functionality, look at trading stocks, indices, foreign exchanges, CFDs, and also, as a physical investment. We’ll also look at the copy trading feature, as it is a social trading broker, and also take a quick look at the copy portfolios, which are, for sort of want of a better word, a copy trading fund of fund.
So first off, eToro, they’re a social trading broker. They started off as a normal broker but evolved into one of the biggest social trading networks out there, where people can trade but also give their views, and try and earn money by having people copy their trades. The basis being if you’re a good trader, people can copy your trades and make money with you, but on the flipside, if you’re a bad trader and you start losing money and you’ve got people following you, then of course, the people who are following you also lose money as well.
If you’re not familiar with the Good Money Guide, this is us. We rate and review the big brokers out there. We’ve got a lot of content, a lot of information on eToro, if you are that way inclined in reading it. We’ve got all of the key features. We have our review, some eToro client reviews, bit of blow about their trading platform. We spoke to their CEO, who told us what eToro’s all about, where it’s been, where it’s going, who they cater for and so on. You know, it’s well worth a read if you’re either trading with eToro or you’re planning on trading with eToro; it’s worth having a read through to see what the broker’s all about.
Also, if you are an eToro customer, do come back and leave a review. Let other trades know what you think.
Okay, so first off, we’ll run through the normal trading. Up here, we’ve got the standard watch lists, which is obviously the most popular assets that have been traded on the platform. Bitcoin and obviously eToro position themselves as a fairly large cryptocurrency broker. They’ve got quite a varied offer. You can see, 99% of customers are buying eToro. Moving down the list, you’ve got the FTSE 100, which is a very heavily traded indices and then UK indices.
Being a social trading broker, when you come to the platform, you ‘ve got the feed of what everybody else thinks is going on in the UK market. You know, there’s some buy and sell banter, and also a few links to interesting information. You’ve got standard stats. Fairly basic chart. And also, you’ve got the larger chart as well. I mean it’s not the most sophisticated charting platform but, you know, whether or not you need a sophisticated charting platform for social trading is another matter. Obviously, you know, you’re trading CFDs so you can go long or short.
One interesting feature actually, we’ll have a look at stocks here. Let’s find a good one. Tesco, for example, is that when you’re trading, you can either trade as a physical stock, so you’re actually buying the underlying asset if you’re an investor, which is quite handy, which means you’ve got no leverage. You’re not using margin. You know, you’re paying full price for the stock. Or you can choose to trade on leverage. So the higher your risk appetite, the higher leverage you can use. So you can see here that $210 worth will get $1,000 worth of stock. $210 worth here on two times leverage will get $420 worth, or if you’re just buying the outright amount, you can trade in physical.
Being of course, you know, a global broker, they tend to things in dollars. I mean you can change that, but we’re not going to bother with that.
You can also short of course as well. You can short on a non-margin basis one time, but obviously, that’s a CFD, because unless you’re an institution, you can’t be short on physical stock. So let’s just have a look. Where do we think Tesco’s going? It’s not looking too healthy, so for the purposes of this review, we’ll just put a two times leverage sell order on Tesco. So there we go; we’ve just opened a position, using 10% of our equity. And we’re not going to share it because I don’t really think people are that interested in what we’re doing. And then of course, if you have a look, you can see the position in our portfolio here.
We’ll just put a couple of other trades on as well. Let’s have a look at indices. If you’re interested in indices, any trade ideas, for example, we’ve got a website called Chartsta, where we’ve got about 30 or so technical analysts on there who provide commentary on the daily markets. Let’s look at what people are saying about the FTSE. So developing a base, bearish, you know, it’s a sort of mixed bag of analysis. So where’ eToro? So let’s just have a look at the UK, see where we think it’s going. So it’s a little bit of a base there, isn’t it? So we’ll buy that. So 20 times leverage; you know, we’re not going to try and lose all our money doing a review, so we’ll just put a small trade on. So there you go, so we’ve got a bit of exposure in the FTSE.
Let’s look at some currencies. Euro, dollar. Where’s that going? That looks like it’s going down. So 30 times leverage, so let’s just reduce that bit. So we’re going to sell that. We’ll open the trade, so there we go. Let’s have a quick look in our portfolio. There you go; we’re losing money on everything. It’s fairly standard for these reviews. We always tend to lose money, but never mind.
So there’s the markets you can trade. You’ve obviously got crypto, ETFs, stocks, indices, commodities, currencies.
A feature unique to social trading is following other traders. So if you think someone’s going to do well, you can follow their trades. One thing of note here is that, you know, picking a trader to follow is almost as tricky as picking a stock to follow. You know, just because somebody’s done well in the past, it doesn’t mean they’re going to do well in the future. This chap here, for example, you know, he’s up 27%. You can see his monthly performance here. He’s not done very well last month, so let’s hope he does better this month. Sort of copy his positions there. There we go, so I think we’re copying him now. It’s quite interesting. You know, you can see how well he’s done. Interesting. I think he’s editor’s choice at the moment, so he’s got quite a few new followers. You can see what he trades frequently and what his positions are at the moment. So if we go to portfolio, there we go, we can see that we’re following him, and it looks as though there are his trades.
Investing in copy funds, again, if you’re new to the market, you want to dip your toe in it, you want to invest in cryptocurrencies or cannabis or something, you can step in here. This is their crypto fund. You can see the assets. It’s mainly Bitcoin. They’ve got 85% Bitcoin, 14% Ethereum. It’s a very volatile market so, you know, performance obviously not great, but if you want to copy what other people are doing, it’s one way to get in. Again, it’s risky, because you know, you’re putting a portfolio in other people’s hands. Same is true of cannabis stocks, for example. You know, if you want to get involved but you don’t want to do all the research yourself, they sort of put together a bucket of stocks really that you can follow. It’s 100% stocks that they’ve got in it. And these are the individual stocks here. There’s the performance of the portfolios. You know, it’s a mixed bag, so just be aware when you’re investing in these things.
Thanks for watching. If you’ve traded with… let’s just close off these positions. If you’ve traded with eToro, come back to the… yeah, I want to close that, thank you very much. No, I don’t want to share. Close. There you go, that’s done. So if you have traded with eToro or you’re thinking about trading with eToro, do come back to the Good Money Guide. Go to eToro’s page and just leave a review. Let others know what you think from trading platform, customer service, spreads and pricing. And that just helps other people make a decision about who they should trade with. Many thanks.
Access eToro anywhere with their mobile app
There are mobile apps for iOS and Android devices, each of which can be found in the respective app stores. If you can connect to the internet then you can use these mobile apps to trade.
Test eToro with a free demo account
Each new account comes with a free demo account and a demo balance of $100,000 so you can practice and familiarise yourself with eToro’s platforms, products and instrument range.
eToro styles itself as a multi-asset, multi-product broker
Access many markets with eToro
eToro offers access to more than 2,000 instruments including physical stocks and shares, ETFs cryptocurrencies and CFDs over the same, as well as currencies and commodities.
What is the maximum leverage eToro offers?
Retail customers can access leverage of up to 30:1 in line with FCA and ESMA guidelines. Whilst professional clients can access leverage of up to 400:1 though clients will need to meet strict criteria to qualify for professional status.
Anytime trading and investing with eToro
Cryptocurrencies can be traded 24/7 on eToro, FX can be traded continuously from late 2205 GMT Sunday evening through to 21.30 GMT on the following Friday .The trading hours of other instruments vary but tend to match the underlying exchange hours.
You can invest or trade through your eToro account
Choose products that suit you
eToro allows you to trade or invest across a range of instrument types with physical ownership and CFDs
Can you scalp with eToro?
eToro is not suitable for or aimed at scalpers
Can you make money trading with eToro?
eToro has a unique approach to the markets with fractional share ownership and copy trading among its propositions, and only 62% of retail investors lose money trading CFDs with eToro, (according to their website disclosures at the time of writing), which suggests that you can if you have the right ideas and timing.
What research does eToro provide traders
Daily market updates and regular blog posts as well as more in-depth research notes on selected cryptocurrencies.
There are educational podcasts alongside guides to fintech and social trading, as well as a selection of video tutorials for clients.
Learn strategies with eToro academy
eToro’s education content is quite limited and aimed at beginner traders
Online but efficient
How do I contact eToro?
Contact with eToro mostly takes place online
eToro phone numbers & addreses
You can find office contact numbers for eToro here:
eToro (UK) Ltd.
One Canada Square
Canary Wharf London,
Phone: +44 02038687213
eToro (Europe) Ltd.
4 Profiti Ilia Street
Kanika International Business Center (KIBC) 7th Floor
eToro AUS Capital PTY Ltd.
Level 33, Australia Square,
264 George Street
Sydney NSW 2000
Phone: 1-800 778 439
eToro USA LLC.
221 River St.,
Hoboken, NJ 07030
Useful eToro email addresses
eToro doesn’t advertise its contact email addresses however email@example.com is an address you may find useful
@eToro the official Twitter handle for the broker
@eToroservice customer service on Twitter
eToro’s community & dedicated customer service
You can access eToro’s online customer service page here where you can ask questions and find help on topics and answers to FAQs. The company doesn’t have a traders community as such but it does have the eToro club. Membership is based on a client’s equity balance.
A bigger balance means a higher level of membership and access to more benefits and services. Further details are available here
Is eToro any good?
This really depends on what you are looking for. If you are a serious trader it's probably not sophisticated enough for you. It has many flaws including only have trades and P&L in USD. It's fine for beginners though or for traders who just want to play about.
How big is eToro?
eToro is a private company and therefore fairly difficult to put a valuation on. It's a new fintech company and is therefore valued on many multiples of revenue. If it even comes to the market via an IPO, then it will be easier to value.
A social trader, particularly on eToro is someone who either trades and is followed by another trader or a trader who copies another trader's trades. You can compare other social trading brokers in our comparison table of social trading brokers.
Is eToro copy trading worth it?
Picking a winning trader to follow is as hard as picking a winning stock or betting on winning the football team. Trading is highly speculative and risky and is normally reserved for less than 10% of an investment portfolio for hedging and "fun money". If you are planning to invest money in social trading it's worth reading our interview with Mike Read of Pelican who explains how social trading could become an asset class.
Should you use eToro?
It's worth social trading on eToro if you pick a trader who consistently makes money to follow. however, if you pick to follow a trader who has made money in the past, then goes on to lose money you'll be gutted as you've not even had the fun of trying to beat the market.
Only you can decide if you should use eToro. It's a high-risk/return trading platform.
Is eToro really free?
eToro is free in the sense that you don't pay additional commission for trading. However, eToro makes money by making the buy/sell prices slightly wider than the underlying markets and not hedging client positions. So, you can buy and sell at the prices displayed on eToro without extra commission.
However, there is overnight funding financing charges when you hold a position overnight. This is charged daily and can really add up if you hold positions for a long time.
Can you trust eToro?
Can you trust it with what? is the question. They are regulated by the FCA who will have done their due diligence to ensure they are not likely to steal your money. eToro are also an execution-only broker which means they won't give you advice. So any money you lose or make will be from your own decisions. Unless you chose to follow a trader who then goes on to lose your money. So, you must decide if you trust the traders you wish to follow rather than eToro itself.
What is the minimum deposit for eToro?
Virtually nothing. But to be honest, if you're asking what is the minimum you can invest in highly speculative markets it's a good indication that they are not suitable for you and you shouldn't be doing it.
Is eToro good for beginners?
Yes and no. It's a basic trading platform that is laid out well and offering access to the most common markets. But if you are new to investing, no it is not. Trading CFDs are very risky and you should learn to invest in the long term and understand the complex nature of derivatives products before you start trading with eToro as a beginner.
Should I invest in eToro?
Firstly, you're not investing in eToro, you're investing with eToro. You are using eToro as a broker to pick and chose what markets (stocks, indices, commodities and forex pairs) to trade. Or you can "invest" in following another trader. Secondly, both are speculation through trading, not investing.
Do I pay tax on eToro?
Yes, you will need to pay tax on profits. You should talk to your accountant about this.
Can I buy stocks for free?
Nothing is ever free. It may appear that way because you don't pay any commission on top, but it is not free to invest with eToro. There are cheap brokers and safer ways to buy and hold stocks.