eToro Review

Israeli-based and established in 2007, eToro is a privately owned fintech company led by its well-known founder and CEO, Yoni Assi.

The broker is a multi-asset platform that offers investments in stocks, cryptocurrencies, and trading in CFD assets. With a long track record, it is assumed that this startup has successfully survived previous financial crises.

eToro is regulated by the top-tier FCA and ASIS and the Cyprus Securities and Exchange Commission.

However, it is not available on any stock exchange, does not disclose its annual report on its site, and does not have a bank parent.

Pros and cons

With fast and seamless account opening, eToro offers commission-free stock trading.  Innovative features like social trading, allow investors to copy strategies of other traders.

Non-trading fees are high for withdrawals and inactivity.  Moreover, cash withdrawals are somewhat slow, and USD is the only currency to hold cash.  Customer support is also hard to reach.

  • Free stock and ETF trading
  • Consistent account opening
  • Social trading experience
  • High non-trading fees
  • Only one account base currency
  • Customer support can be improved

Main features

Country of regulation

UK, Cyprus, Australia

Trading cost class

Low

Products offered

Stock, ETF, Forex, CFD, Crypto

Minimum deposit

€1,000

Deposit with bank card

Available

Depositing with electronic wallet

Available

Time to open an account

1 day

Number of base currencies supported

1

Demo account provided

Yes

Fees

eToro offers zero-commission real-stock trading for all countries since May 2020. However, clients from Australia can only trade commission-free on US stocks.

The broker also allows you to trade stocks and ETFs as CFDs if you set the leverage to greater than one.

Stocks involving trade other than in USD (the UK or European stocks) will be automatically converted to USD at the actual market prices without paying any commissions or markup. Tax duties that might be due if you trade in the UK market will also be absorbed.

In the sections below, you will find the most relevant fees for each asset class.

 

  • Low trading fees
  • Free stock and ETF trading
  • Low forex and CFD fees
  • High non-trading fees
eToro costs
Assets Cost level Cost terms
S&P 500 CFD Low The costs are built into the spread, 0.7 points is the average spread fee at peak trading hours.
Europe 50 CFD Average The costs are built into the spread, 3 points is the average spread fee at peak trading hours.
EUR/USD Low The costs are built into the spread. 1 pip is the average spread cost during peak trading hours.
Inactivity cost Low $10 per month after one year inactivity.
eToro costs
Stock and ETF commission of a 2,000 trade
US stock $0.0
UK stock $0.0
German stock $0.0
eToro costs
CFD costs for a $2,000 long position held for one week
S&P 500 index CFD cost $1.7
Europe 50 index CFD cost $2.9
Apple CFD cost $6.7
Vodafone CFD cost     –
eToro costs
Forex benchmark costs of a $20,000 30:1 long position held for one week
EUR/USD benchmark cost $8.7
GBP/USD benchmark cost $8.1
AUD/USD benchmark cost $7.9
EUR/CHF benchmark cost $12.9
EUR/CHF benchmark cost $12.9
eToro non-trading costs
Account cost No
Inactivity cost Yes
Deposit cost $0
Withdrawal cost $5

Account Opening

The account opening process is super quick and online.  By creating and verifying an eToro account with either Facebook or Google details, access to the trading platform will be instantaneous.

Investors can practice their skills without the real risk of losing money with the Virtual Portfolio tool, which renders a starting Virtual Portfolio Value of $100,000.00.

Alternatively, they can switch to Real Trading and fund the account accordingly.  This process will require bank details and identity and residency documentation to be uploaded.

Create and verify account

Start trading 

Submit required documents 

Complete account profile

  • Fully online
  • Easy-to-use
  • Available in almost every country
  • Lowest deposit is costly in certain countries
  • Sluggish account authorization

Account Types

eToro provides two simple account types: a virtual portfolio without trading with real money, and Real Trading.

Live account

Demo account

Deposit and withdrawal

The only currency available is USD which means that all funds will be converted to USD accounts automatically.  For example, if you deposit an amount in euros by bank transfer, a fee of approximately 0.46% of the deposit amount will apply.  The same fee will also apply when funds are withdrawn.

Higher fees will apply to some currencies when using other methods such as credit cards.  Alternatively, USD deposits can be made, allowing the relevant bank to convert at its specific rate.

eToro has a $5 withdrawal fee, which is high, compared to other CFD brokers. In addition, eToro has a $30 minimum amount limit on withdrawals.

Withdrawal options are the same as the funding options: you can withdraw money using bank transfer, credit/debit card or electronic wallets, similar to other CFD brokers.

Trading platform

Web trading platform

The trading platform is a pleasure to the eye with its clean design and excellent functionality. The menus and buttons are well-labeled with a pleasant color scheme, making for a great User experience.

Customization is complicated as panels are fixed. However, the watchlist is simple to configure.

An optional two-step login system is available and, albeit a bit more complicated to log in, provides more security and safer access.

The built-in search is predictive and user-friendly, while access through tickers is also easy.

Mobile trading platform

The mobile platform is well-designed, intuitive, and a pleasure to use.  The platform is available for iOS and Android and is also available in the same 21 languages as the web trading platform.

The same functionality applies to the mobile platform as the web platform.  It uses mobile-specific intuitive functions, such as push alerts or good touch interactions. For example, you can swipe left and right in your portfolio to access charts or open a new trade.

Markets and Products

Currency pairs

Countries

Instruments

CopyTrader

CopyTrader is the so-called social trading feature that allows you to copy the portfolio of other eToro traders, browse through their profiles, and check previous performance on an annual and monthly level.

Note, however, that you can only copy a maximum of 100 traders simultaneously.

A minimum amount of $200 and a maximum of $500,000 is applicable when investing in one trade.

A drawback of CopyTrader is that you can only close the full amount of your position and not a portion of it.

CopyPortfolio

CopyPortfolio is basically an investment fund, but under the hood, it is a CFD portfolio. While with CopyTrader you were following one trader, with CopyPortfolio you can invest either in a theme or in a portfolio of elite eToro traders.

  • Investing in themes means, for example, investing in a portfolio of big banks or cryptocurrencies. The Crypto Portfolio, for instance, consists of the biggest cryptocurrencies, weighted by market cap.
  • Another way to invest through CopyPortfolio is to invest in a portfolio comprised of multiple “star” traders.
  • There is also a crypto CopyPortfolio available.

 

Stocks and ETFs

If you buy stocks or ETFs without leverage, you are buying the real asset, not a CFD. Usually, this feature is not provided by other CFD and forex brokers. In that sense, eToro’s selection of 17 stock markets to access is great. However, compared to stockbrokers like Saxo Bank (~35 markets) or Interactive Brokers (~80), it is poor. Note, that if you’re going short (selling a stock that you don’t already have), you’re always trading a CFD.

On the other hand, you can only trade the more popular stocks. For instance, the number of tradable stocks on the Nasdaq with eToro is currently 370, which is only roughly 10% of the companies available on the Nasdaq exchange.

 

Cryptocurrency

Cryptocurrency prices can fluctuate widely and are therefore not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework, such as MiFID. Therefore, when using eToro’s Cryptocurrencies Trading Service you will not get any investor protection.

At eToro, if you reside in the United States, the only product that you can trade with is cryptocurrencies.

Research

Recommendations

Find recommendations, such as analyst consensus (buy/hold/sell), average price target, hedge fund sentiment, and insider trading sentiment.   

Research features and analysts reports are only available for a limited number of popular stocks.

Fundamental data

Basic fundamental data on stocks is available on eToro’s platform. This includes the profile of the company and basic indicators and ratios such as P/E, EPS, dividend yield, and beta. No fundamental data is available for asset classes other than stocks.

Sign up for a daily market analysis newsletter, and access a useful list of market highlights.

Charting

The charting tool allows one to use as many as 70 technical indicators.  The charts are automatically saved, saving individuals’ time setting up.  Unfortunately, data over 6 months are unavailable.

News feed

The news feed is more like a market-themed Twitter feed, displaying messages posted by eToro users and analysts. Hashtags (#) are used for themes and dollar signs ($) for assets.

Although somewhat unenthusiastic about this feature, it certainly adds a social aspect to trading.

Customer Support

eToro offers customer service through a web-based ticketing system.  Feedback for basic questions is usually received within 48 hours.  However, a response to more complex questions can take up to 14 days which is considered insufficient.

Customer service is unavailable over the weekend and only Club Members have access to Live Chat.  In theory, eToro offers customer service in all 21 languages on the web and mobile trading platforms.

Safety

eToro operates three legal entities and serves clients based on their area of residence and is an important factor of safety.

  • UK citizens can open an account at eToro (UK) Limited and will be protected by the FCA.  If eToro becomes bankrupt, eToro UK clients can expect compensation of up to £85,000 guaranteed by the Financial Services Compensation Scheme (FSCS).
  • Australian clients are served by eToro Australia, the Australian financial authority ASIC but do not provide any obligatory investor protection for a pre-set amount.
  • Other investors will have their live trading accounts with eToro (Europe) Limited, which is regulated by CySEC.  Investment protection coverage of up to €20,000 is set by the Cypriot Investors Compensation Fund.

 

All clients onboarded any of the three entities are eligible for eToro’s private insurance. It is a £/$/€ 1,000,000 insurance for cash, securities, CFDs. It is provided by Lloyd’s in an event of eToro’s insolvency.

This addition provides another layer of protection above the regulatory one but could be withdrawn by eToro at any time.

eToro is not available on any stock exchange and does not provide regular financial statements to the public. Hence, it is difficult to know anything regarding its financial performance. It does not have a bank parent, either, which could help provide capital to eToro, if needed.

At the same time, being supervised by top-class regulators is a great indication of eToro’s safety.

 

  • Majority of clients belong to a top-class financial supervisors
  • Negative balance protection.
  • Well-known innovative fintech firm.
  • Does not hold a banking license.
  • Not available on a stock exchange.
  • Financial information is not available to the public.

Bottom line

 eToro has zero-commission stock trading. The account opening is fast and consistent. It has a lot of innovative features, like social trading and copying other (successful) traders.

It has some setbacks, though. Non-trading fees are high and eToro only allows USD accounts, which means that conversion costs on deposits and withdrawals can be costly in some cases. Live chat is difficult to reach and their educational materials has room for improvement.

So is eToro good? Overall, we would recommend eToro for its social trading feature and zero-commission stock trading.