Editor’s Note: Why eToro Doesn’t Suck In 50 Words
They are known to be one of the first and biggest social trading platforms. In that regard, they are true innovators and innovation doesn’t suck, especially if it catches on. People love to copy the trades of others (if they’re successful of course) and to offer the possibility to be copied by others, so in my mind, the social aspect of the platform is the main reason why they don’t suck. However, keep in mind that all trading is risky, whether you do it yourself or copy others.
Why Does eToro Suck In 50 Words
They offer a ton of features, hundreds of assets, and extensive statistics regarding the performance of the traders that you can follow. All this can be a bit overwhelming for a newbie, so it will take a while to get used to all of it. Now, it depends on how you’re seeing it: do you want something very simple but shallow or are you willing to use something more complex that takes a bit more effort?
Is eToro A Scam?
I’m going to keep this simple: No! eToro is one of the oldest FX and CFD brokers around and there’s no scam warning here. There are complaints about them, but then again, there’s absolutely no brokerage without complaints, especially one that’s been around for more than 10 years.
They are fully regulated by the British Financial Conduct Authority, the Cyprus Securities and Exchange Commission, and the Australian Securities and Investment Commission (ASIC). These are three of the most prolific regulatory watchdogs so the probability of eToro being a scam is extremely low to non-existent.
67% of retail CFD accounts lose money.
Should I Open An Account With eToro?
eToro is a well-known and respected broker, with tons of experience, which matured like a fine wine over the years. Launched initially in 2006 under the name RetailFX, it later took the now popular name eToro and launched CFD trading in 2013. The brokerage is regulated by the British FCA (as eToro UK Ltd) under FCA reference number 583263, by the CySEC (as Etoro Europe Limited) under CySEC licence number 109/10, and by ASIC (as ETORO AUS CAPITAL PTY LTD), ABN 66 612 791 803.
The brokerage offers Forex (FX), Contracts For Difference (CFD) and CryptoCurrency trading. The main thing that sets them apart from other brokers is the social and copy trading aspect. Traders around the globe are coming together to follow others or to be followed (and I literally mean around the globe because their client base is over 7 million). This concept was first introduced by eToro in 2010 when they were the first to do it, so we can safely say they are a true pioneer in the online trading industry.
The account structure is very simple, with just 2 account types (Real and Demo). The minimum deposit requirement is relatively low, at just $200 for most regions, but with some interesting limitations depending on your location. Residents of Israel will have to deposit a minimum of 10,000 USD (!!!), residents of Algeria, Lebanon, the Maldives, and Venezuela, have to deposit at least 5,000 USD and residents of Australia and the USA can open an account with only 50 USD.
Education is also a big part of eToro’s arsenal as they offer a comprehensive Trading School composed of webinars, online courses, and training videos, but also Daily Market Analysis of both legacy and crypto markets. The best thing: the daily analysis/review is actually posted daily, just how it’s supposed to be, and not some week-old stuff.
To sum it all up, eToro is one of the oldest and most respected brokerages in the industry, with bulletproof regulation, and is always keeping up with the new trends and demands of the users. They were the first to introduce social trading and among the early adopters of Bitcoin trading. It’s also important to note that since August 2020, eToro accepts clients from most US states.
eToro UK is located on the 42nd floor, One Canada Square, Canary Wharf E14 5AB, London, United Kingdom. eToro Europe is located at KIBC Kanika International Business Center, 7th Floor 4 Profiti Ilia Street, Germasogeia, Limassol, Cyprus 4046. eToro USA LLC. is located at 221 River St., 9th Floor, Hoboken, NJ 07030, USA. eToro Australia is located at Level 19, 9 Hunter Street, Sydney NSW 2000, Australia.
Over the course of its long history, this broker has its share of complaints but that’s happened to all brokers and even more to those with 7 million clients. Some of the times, people complain when actually they are the ones who made a mistake like forgetting to set a Stop Loss order, not paying attention to spreads in volatile times, or simply making bad trading decisions altogether.
I am not saying that clients should be blamed for losing money or that all complaints are “Fake News” but everything should be taken with a pinch of salt.
eToro Regulatory Warnings And Announcements
12.02.2013: The Cyprus Securities And Exchange Commission announced they’ve reached a settlement for the sum of 50,000 EUR with Etoro (Europe) Limited. According to CySEC, eToro had weaknesses in their application of the Investment Services and Activities and Regulated Markets Law of 2007 (the “Law”), but most of these concerns were about the early days of eToro’s activity. According to CySEC, the company has since rectified the weaknesses. Source: CySEC Announcement.
The processing time on eToro’s side is 1 business day and a few more days will have to pass until the payment actually reaches your account. Wire transfers and Credit Card payments may take up to 8 business days, while e-wallets (Neteller, Skrill, Paypal) take up to 2 days. The minimum withdrawal amount is 30 USD. eToro charges a fixed fee of 5 USD for withdrawals.
eToro’s social trading (CopyTrader) is the main thing that stands out about them. They’ve been the first to do it and still the best at it. Apart from that, we can mention their CopyPortfolios, which is an offering that takes copy trading to the next level. Each CopyPortfolio aggregates various assets or a group of traders and is constantly optimized by machine-learning algorithms.
There are three types of CopyPortfolios to choose from:
• Top Trader CopyPortfolios. These are composed of the best performing traders on eToro, according to a predefined strategy.
• Market CopyPortfolios. These bundle together a select combination of CFD stocks, commodities, or ETFs, according to a predefined theme.
• Partner CopyPortfolios. These have been created by eToro’s partners – Tipranks, a stock analyst software company; WeSave, a French robo-advisor; and Meitav Dash, a multi-billion dollar investment house.
Trading Bitcoin With eToro
Bitcoin is special and cryptocurrencies in general, have seen massive gains throughout 2017 and eToro was one of the early adopters, one of the first brokers to allow Bitcoin trading and altcoins trading. Now they offer CFDs on 16 cryptocurrencies (Bitcoin, Bitcoin Cash, Dash, Ethereum Classic, Ethereum, Litecoin, Ripple, EOS, Neo, Stellar, and more) but for the time being, they only allow x2 leverage for cryptocurrencies.
As you probably know, the crypto market peaked in late 2017, only to drop massively until late 2020 when it reached new all-time highs, thus, it’s important to always keep in mind that Cryptocurrency prices can fluctuate widely, and therefore, this asset class is not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.
User Friendliness 19/20
As I mentioned before, eToro can be a bit hard to use at first for a newbie. However, all the information you need can be found easily, and more importantly, you won’t find contradicting information on different parts of the website. Demo accounts are available for free, mobile apps as well and the website is translated into 21 languages. Most importantly, clients from most US states are accepted (since August 2020).
Range Of Markets, Spreads And Leverage 18/20
They offer literally hundreds of assets to trade as CFDs. It’s one of the largest baskets of assets around, which includes stocks, indices, ETFs, currencies, commodities, and cryptocurrencies (Bitcoin and others).
The spreads are floating and very tight (at least at the time of writing): below 1 pip for EUR/USD and similar for USD/JPY. For European and UK clients the leverage is 30:1 for major currency pairs, 20:1 for non-majors, 10:1 for most commodities and indices, and 5:1 for CFD stocks and ETFs. Crypto comes with 2x leverage. Professional clients can use higher leverage; leverage can also differ depending on the location of the client.
Fees And Support 18/20
Withdrawal requests are subject to fees, which will be visible in the Cashier section of the client’s account. The fee is 5 USD, which is not a lot, but still, most brokers don’t charge for withdrawals; maybe eToro should scrap this fee as well. They also charge a monthly inactivity fee of 10 USD after 12 months of inactivity. Support was quick to answer, polite and helpful, so nothing to complain about here.
Deposits And Withdrawals 18/20
The available deposit methods are credit cards, wire transfers, and e-wallets (Paypal, Skrill, Neteller, and others, which may differ depending on client’s location). The minimums depend on the region (see the main section above). Withdrawals are processed within 1 business day but depending on the payment provider, additional time will pass until you can see the funds in your account. Credit/debit card withdrawals and bank transfers may take up to 8 business days, while e-wallet transactions take 1-2 working days.
Bitcoin trading, social trading (CopyTrader), CopyPortfolios, and fresh market news every day, covering both legacy and crypto markets. They do a good job combining the “old” trend of copy trading with the new Bitcoin wave.
eToro Overall Ratings (92) + Regulated FCA + CySEC (+3) = 95/100
**eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
Past performance is not an indication of future results.
Cryptoassets are volatile instruments which can fluctuate widely in a very short timeframe and therefore are not appropriate for all investors. Other than via CFDs, trading cryptoassets is unregulated and therefore is not supervised by any EU regulatory framework.
eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.