eToro Customer 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)
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.
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.
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.
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.
Tom Cropper has been writing for us since 2015. Tom is a financial journalist and his appeared in titles such as the Guardian, Euromoney and many others.
Yoni , eToro's CEO tells us about bringing copy trading to the masses and becoming a potential challenger to traditional fund managers.
Over the years Yoni Assia has been featured in the Fintech 40 and City AM's top 100 fintech influencers. Here Yoni Assia talks exclusively to the Good Broker Guide about where eToro has been, where they are going and what makes them a challenger to traditional fund managers.
Why did you set up eToro and is it today what you had originally planned it to be?
eToro was founded in 2007 with the vision of opening up the global markets for everyone to trade and invest in a simple and transparent way.
We wanted the eToro to become a community where people could share their ideas. We built the platform as a social network for traders and investors, where they can execute trades, but also see what others are doing and talk to each other.
We invented copy trading, or at least brought it to the masses, and 'copy' remains a key feature of our multi-asset platform today. Around half of our clients use it, both in terms of following others, or investing in our growing range of CopyPortfolios.
While we have come a long way since 2007, this social or community ethos still holds true. We now have a community of over 10 million registered users from over 140 countries.
Today, eToro acts as a bridge between the old world of investing and the new, helping investors navigate and benefit from the transition of assets to the blockchain. eToro is the only place where investors can hold traditional assets such as stocks or commodities alongside 'new' assets such as bitcoin.
We believe that in the future all assets will be tokenised and that crypto is just the first step on this journey.
For investors looking to copy traders, why use eToro instead of a traditional fund manager?
We believe that investors are looking for three things:
- access to the assets they want,
- knowledge and insight, and
- someone to make the process easy.
Unlike traditional fund managers, eToro offers all three and at a price point which makes investing accessible to everyone.
Joining eToro gives investors of all types access to the assets they want today from commodities and stocks, through to cryptoassets. They also benefit from being part of a global community of more than 10 million registered users who share their investment strategies and insights and anyone can follow the approaches of those who have been the most successful.
It is simple and easy to set up an account, then buy, hold and sell assets.
For those new to investing, the community aspect of eToro’s platform and the educational resources introduce users to the risk profiles of the different asset classes and the types of returns to expect. Our community is alive 24/7 to answer questions and share insight. You can't compare this to investing with a traditional fund manager.
eToro clearly isn’t worried about stepping into new markets (cannabis and crypto for example). Any view on what the next emerging industry is going to be?
We believe that crypto and the blockchain technology that underpins it will have a huge impact on global finance and is therefore a major focus for our firm. Blockchain has the potential to revolutionalise finance and we believe that we will see the greatest transfer of wealth ever onto the blockchain.
We are already seeing the tokenisation of assets - crypto is one example but we are also seeing tokenised gold and art. Just as eToro has opened up traditional markets to investors, we want to do the same in a tokenised world.
The rise of crypto has introduced millennials to trading. Do you think crypto is here to stay and how heavily do you think cryptocurrencies should be regulated?
We fully believe in crypto. For me the easiest way to try and explain the significance of crypto and the blockchain technology that underpins it is to compare it to the internet.
The relationship between blockchain and cryptoassets is similar to the one between the internet and email. Much like email is just one use case of the internet, cryptoassets – namely bitcoin the first crypto – is the original use case of blockchain technology.
We believe that blockchain will transform finance in the same way that the internet revolutionized communications.
A conducive regulatory environment is vital to protect consumers and foster growth and innovation within the investment industry. As such in the UK, eToro was the driving force behind the establishment of CryptoUK, the first self-regulatory trade association for the UK cryptoasset industry.
Its remit is to promote higher standards of conduct and to educate politicians and regulators about the industry and its potential. The recent report from the UK's Treasury Select Committee reflected our calls for the introduction of proportionate regulation to improve standards and encourage growth.
What's the ultimate goal for eToro?
After 11 years our vision remains unchanged. We want to open up the global markets for everyone to trade and invest in a simple and transparent way. As the world of investing evolves that means eToro evolving too so that we can continue to support our clients and help them meet their investment goals.
And finally, what are your top three online resources that new traders and investors can use to improve?
- We have some great educational material available free of charge on the eToro platform.
- We are also big fans of Finimize which provides a simple digest of the top two financial stories each day.
- There is no shortage of information out there but humans are social creatures so we like to discuss things with others and learn from others. That brings us back to the community aspect of eToro.
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.
Is eToro safe?
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.
How does eToro make money?
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.
Is eToro a good app?
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.
Is eToro legit?
eToro is regulated and approved to offer all its products. However, these products do come with a risk.
How do you sell short stocks on eToro?
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.
Does eToro pay dividends?
Yes. If you buy an asset from a company which pays dividends, you’ll receive them in your account.
Do you pay stamp duty with eToro?
No. The platform absorbs stamp duty costs.
Is eToro available in the US?
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.