eToro: Revolutionising Trading with Social Trading and Commission-Free Investing
Our Verdict
About eToro
Etoro is an online trading platform founded in Tel Aviv, Israel in 2007. It operates globally and has around 25 million registered users who can trade stocks, commodities, currencies, ETFs, and CFDs. Etoro's focus is on social trading, allowing users to buy and sell in simple formats and copy the trades of other traders in real-time. It claims to offer commission-free services, making its money on the spread.
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Etoro's Key Products and Features
Etoro has several key features, including Smart portfolios, Copytrader, Demo trading, CFD Trading, Fractional Shares, Leverage trading, In-depth Research, Professional charts, Stop-loss and take profit alerts, Offline trading and Free investment insurance.
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Fees and Charges
Although Etoro offers commission-free trading, there are other fees and charges, such as currency conversion, withdrawal fees, inactivity fees, overnight and weekend charges and spread fees.
The minimum deposit required for UK traders is $10, and the minimum withdrawal amount is $30.
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eToro's Money Account
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eToro's money account works alongside the eToro trading platform and enables users to instantly deposit and withdraw money fee-free. Users can opt for the Green account which enables users to withdraw up to £650 per month for free. (A charge of 1.5% applies thereafter).
Most importantly, are the spread fees. The spread is the difference between the buy and sell price that is quoted for a particular asset. eToro explains the spread on its website saying as soon as you open a new trade, you will see a loss in the position; this is due to the spread. When trading products with a spread, traders are essentially hoping that the price moves beyond the price of the spread. If it does, it can be closed for a profit. So while trading is provided commission-free, it isn’t necessarily fee-free as there are charges in the form of the spread.
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Etoro is Regulated
The platform is authorised and regulated by the Financial Conduct Authority in the UK and is covered by the Financial Services Compensation Scheme, which protects investments up to £85,000. However, the money held in the eToro Money account is not covered by the scheme.
Etoro provides free investment insurance provided by Lloyd’s of London, Importantly, the insurance only covers cash, CFD positions and securities. Cryptoassets trading are not covered by the insurance.
It is worth noting that 81% of retail investor accounts lose money when trading CFDs with this provider.
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Why we Like eToro for Trading and Investing
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eToro is a well-known trading platform that allows investors to trade stocks, commodities, and currencies without paying any commission. It is especially favored by individuals who want to invest in and trade cryptocurrencies. One of its most remarkable features, which distinguishes it from other trading applications, is its social trading function that permits investors to replicate the trades of other traders. Although eToro enables commission-free trading, Trust Pilot reviews are divided, and new users should be aware of the various fees associated with the platform.