eToro Review 2023
(79% of retail CFD accounts lose money)
eToro is one of the leading social investment networks and trading brokers in the world. It is a multi-asset investment platform that has revolutionized the way people invest while also enhancing investors’ financial education. The platform is built on social collaboration and investor education — a community where traders and investors can connect, share, and learn.
To ascertain the qualities of eToro, we reviewed the company’s brokerage and social investment services. In this post, we covered its regulations, platforms, global access, registration, available instruments, account types, trading fees, leverage, and education.
Regulation and Security
Launched in January 2007, eToro now serves over 25 million traders and investors across the globe. The platform follows the strict regulations of several authorities across the world, as follows:
- eToro (Europe) Ltd. Is authorized and regulated by the Cyprus Securities Exchange Commission (CySEC) under the license number 109/10.
- eToro (UK) Ltd is authorized and regulated by the Financial Conduct Authority (FCA) under the license FRN 583263.
- eToro AUS Capital Limited is authorized and regulated by the Australian Securities and Investments Commission (ASIC) to provide financial services under the AFS License 491139
- eToro (Seychelles) Ltd. is licensed by the Financial Services Authority Seychelles (“FSAS”) to provide broker-dealer services under the Securities Act 2007 License #SD076
- eToroX, a subsidiary of the eToro Group, has a distributed ledger technology (DLT) license from the Gibraltar Financial Services Commission (GFSC)
- eToro USA LLC is registered with FinCEN as a Money Services Business, while eToro USA Securities Inc is a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC)
Cyber Security Standards
eToro employs the highest standards and uses encryption and SSL technology for protecting its clients’ funds and personal information. The firm will never share clients’ information unless required to do so by law. You can find more details regarding their safety protocols by clicking here.
eToro keeps every penny deposited by a client in a separate, segregated account held in some of the top banks across the globe. So, the company cannot use clients’ funds for its operations and in the event of bankruptcy, the funds will be safe.
Negative Balance Protection
eToro uses this safety mechanism to ensure you don’t end up with a negative balance, which would mean owing the broker. It monitors your maintenance margin and ensures an early margin call to prevent your account equity from getting to negative levels; in the event that your account equity becomes negative due to a market gap, your balance would be reset to zero to avoid a negative balance.
Is eToro available worldwide?
Yes, eToro offers its services to clients from every part of the world, including the US. However, eToro’s services may not be available in countries or jurisdictions where such services are not allowed by local laws. Find the complete list by clicking here.
eToro provides a proprietary multi-asset trading platform that is available in the webtrader and mobile app versions to trade and invest any time, anywhere, and even alternate between your laptop, tablet, or mobile device with ease.
eToro WebtTrader Platform
This is a multi-asset trading platform with an intuitive and easy-to-use interface, allowing beginners and expert traders to trade over 3,000 financial assets with ease.
On one hand, the platform is a brokerage trading platform with enormous analysis and trading features, such as charts in different timeframes, indicators, trading order types, and trailing stops. It also features one-click trading functionality, which enables clients to open a new position with a single click, and special analysis tools, such as ProCharts — a professional-grade technical analysis tool that allows you to compare charts from different financial instruments and different time frames.
On the other hand, the platform offers a social trading network, with “CopyTrader”. CopyTrader has various assessment parameters you can use to evaluate the traders to copy. When you click on the statistics tab in the trader’s feed, it will display the trader’s equity growth, maximum drawdowns, number of wins, number of losses, and so on. Apart from new traders being able to copy the trades of experienced traders, the platform also allows those expert traders to interact with other expert traders.
As a webtrader, the eToro trading platform can be accessed directly on modern web browsers — Chrome, Safari, Firefox, and Edge — so, there is no need to download or install any software first.
eToro Mobile App
eToro makes its trading platform available as a mobile app. The mobile app has all the functionality of the social trading platform and allows users to manage their portfolios, follow markets, copy traders, and perform any action available on the platform from their smartphone device.
You can download the mobile app from the relevant app stores. The app stores can also be accessed from eToro’s website.
Other trading tools
The broker also offers other investment tools, such as “My Watchlist”, where you keep a list of assets you are tracking for future investment. Another tool is “Smart Portfolios or Copyportfolios” — they are ready-made, investment strategies that offer thematic investment, such as medical cannabis, driverless cars, and people-based portfolios.
eToro offers the following account types:
- Retail account: This is the account for retail traders and investors who either want to trade the available instruments for themselves or copy the trade of other traders. This can be an investment account for investors who want to copy other traders, and in this case, the minimum deposit is $200. But for those who want to run a Popular Investor account that others can copy, the minimum deposit is $1,000. This account has a limited leverage offer, especially for EU clients (1:30), but it provides traders with negative balance protection.
- Professional account: This account is for eToro clients who qualify as professional clients — a regulatory status available for experienced traders and financial professionals who are permitted to employ more advanced strategies in managing their portfolios. To qualify as a professional client, you must have one year of relevant experience in the financial sector and a portfolio of more than €500k. With a professional account, you can open positions with a leverage of up to 1:400 for certain instruments and may receive a reduction in your current margin rates, but there may be no negative balance protection.
- Islamic account: This account caters explicitly to Muslim traders who follow the strict rules of Sharia law, which doesn’t allow any type of interest, such as the overnight fees charged for keeping a position open over the night. Overnight fees are charged when traders hold positions open for longer after the trading day has concluded and this type of account allows exemption from such fees or interest, should traders hold positions open for longer. If you want to register for an Islamic account, you must contact the broker’s customer support team to know the terms and conditions.
- Demo Account: There is also a demo account that you can use to practice trading or copy trading without putting real money on the line.
To open an account with eToro, click on the “Sign Up” tab at the top-right corner of the broker’s website, fill in the required information, and click on the Submit button. You will be required to verify your email address and then proceed to complete your profile details. After that, you will have to submit a means of identification and a utility bill to verify your account.
Deposit and Withdrawals
eToro provides multiple payment methods for deposits and withdrawals, including bank transfers, credit/debit cards, and online money processors, such as PayPal, Skrill, Neteller, Trustly, and iDEAL. Traders in the UK can also use the newly added eToro Money payment system.
The minimum/maximum deposits, transaction charges, and transaction processing time depend on the payment method and type of transaction — deposits or withdrawals. The eToro Money system offers instant processing for any type of transaction.
eToro offers over 3,000 financial instruments for trading. These include over 40+ minor, major, and exotic currency pairs; over 2000 stocks from across 17 exchanges; multiple energy and metal commodities; many stock indices and ETFs; and a good selection of cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), Cardano (ADA) & XRP.
Commissions and Fees
As with all online trading platforms, eToro charges various spreads and fees for some trades and withdrawals. The broker does not charge commissions but its trading feeds are added to the spreads. Crypto spreads are marked up by 1%, while the spreads for currencies, commodities, indices, and stocks & ETFs (CFDs) are marked up by at least 1 pip, 2 pips, 0.75 points, and 0.09% respectively.
Other fees charged by the broker include a withdrawal fee of $5, and a $10/month inactivity fee. CFD positions that stay open overnight also incur a small fee, relative to the value of the position. If you’re considering eToro, you should view their commissions and fees before reaching a final decision (they have an excellent search tool which you can use to enter keywords to help quickly find what you’re looking for. Alternatively, you can compare them and other brokers here).
Trading with leverage means using money borrowed from a broker when opening a position. This allows you to trade a big position size with small capital. While this can increase your profit potential, it is important to note that losses will be multiplied as well.
eToro offers up to 1:30 leverage to retail clients, especially European clients under the ESMA rules. However, professional clients can get up to 1:400 leverage.
Analysis and Education
eToro provides traders with a good selection of learning resources. The Education section on the broker’s website has four subsections:
News & Analysis: This has lots of market analysis, webinars, and news that keeps traders up-to-date with the latest happenings in the financial markets.
eToro Acadamy: There are many learning articles, trading guides and videos.
eToro Plus: Here, the broker’s research team carries out an in-depth analysis of the various financial assets.
The Bull Club: This contains conversations with industry leaders and the world’s most successful traders.
eToro provides traders with a knowledgeable client support team who are always available to all clients’ general, technical, and account-based inquiries. You can reach them by opening a Customer Service request ticket or via a live chat channel in the Help Center. You may also get in touch with them via their social media channels — Facebook, Twitter, and Instagram.
Reputation amongst Traders
The broker has received thousands of good reviews on different review websites and trading forums. For example, on Trustpilot, eToro is rated 4.2/5 from more than 15 thousand reviews. On Google Appstore, the eToro app got 4.2/5 from over 120 thousand reviews. Many traders are happy with their platform and customer service.
Can beginners trade with EToro?
Yes, beginners can use trade with the broker, and here’s why: The broker platform and the mobile app have an easy-to-use interface, which beginners can easily navigate.
Moreover, the broker offers a lot of trading education and provides a demo account for beginners to practice with.
eToro is a multi-asset investment platform that has revolutionized the way people trade and invest in the financial markets. It offers both brokerage services and a social investment network, allowing traders to trade over 3000 instruments and investors to copy the trades of many expert traders.
The broker is regulated in multiple jurisdictions by many tier-1 regulators across the globe, making it one of the safest to trade with. However, its high trading fees may deter some traders and investors.