eToro is a trading platform to trade with stocks, cryptocurrencies, and various assets through CFD. This company has been operating since 2007, and today is one of the leaders in trading.
eToro Review: Fees
The fee for withdrawing your money from eToro is $25. This is a fixed rate and does not vary according to the amount you are going to withdraw. That is, for large volumes, it may be right, but for small withdrawals, it’s too expensive.
To buy or sell commodities, cryptocurrencies, currencies, or indices, the financial spread of eToro varies according to the financial instrument.
In the case of the shares, it has a 0% commission policy for operations without leverage. It doesn’t include trading with CFD on stocks.
In general, it seems that eToro rates are very simple. Instead, the cost is in the financial spread of the assets.
In eToro, you can invest in different types of assets and instruments. In this way, you can diversify your portfolio and thus diversify the risk.
It is a very positive point that you can diversify the types of investments in a single platform since you store it in one place.
But before we continue talking about diversification, we must explain some basic definitions of investment in assets. This is because there has been some confusion about what you can invest in eToro.
What assets can you invest in eToro?
In eToro, you can invest in two ways: acquiring the asset in your name or trading CFD trading. When you buy it in your name, eToro buys it for you and holds it to your name. In the case of CFD (contract for difference), the assets aren’t yours but only speculate on the movement of the future value of the asset.
What does investing in CFDs means?
The CFD (Contract for Difference) offers an investment opportunity without acquiring the asset. In these operations, the gain is obtained in the movement of the asset. In this type of investment, you can bet on the upward or downward future movement. If you think it will go up, you buy the CFD, but if you think it will go down, you sell the open position.
The parties involved are the client and the broker (in this case, eToro).
What is leverage?
When you operate on CFDs, there is a tool called “leverage.” Leverage is a function that acts as an investment multiplier. That is, you can invest much more money than you have. For example, if you want to invest $ 100 with x10 leverage, you will be investing over $1000.
Assets available in eToro
Stocks are the most common type of investment. The ideal is to invest in the medium or long term.
The best-known stocks available on eToro are Apple, Facebook, Tesla, and Amazon.
You can place them in your name, or operate with CFDs.
Cryptocurrencies are the “boom” of the last decade. Everyone wants to invest in cryptocurrencies. But you should also know that cryptocurrencies are super unstable and can carry a lot of risks. So as you can earn a lot of money, you can also lose a lot.
In eToro, you can invest in more than 98 cryptocurrencies. The most famous of all is Bitcoin, but there are hundreds more to invest like XRP, Ethereum, Litecoin, EOS, and many more.
On the eToro platform, you can acquire them in your name or operate on CFDs.
There are also regular currencies such as the dollar, euro, yen, etc. The forex market is the one that moves the most money worldwide.
On the eToro platform, you cannot acquire currencies but speculate on CFDs.
The CFDs of the currencies work in pairs, such as EUR/USD. If you buy this asset, it means that you speculate that the euro will rise relative to the dollar. On the other hand, if you sell it at the opening, you are betting on the euro going down against the dollar.
Commodities are also highly sought after by investments. In eToro, you can only operate on CFDs. You cannot acquire them in your name.
The most common are gold, oil, silver, natural gas, etc.
ETFs (Exchange-Traded Funds)
This is a financial instrument that brings together several assets into one. Different ETFs have different types of strategies.
In eToro, you can place ETFs in your name, or operate on CFDs.
The indices show the status of a specific segment of a market. The indexes involve many companies in a single market.
For example, the GER30 is an index that groups the 30 largest companies listed in Frankfurt (Germany).
You can only operate on CFDs since it is not possible to acquire the indexes in your name.
In Australia, it is only available to operate on CFDs in eToro (on any type of asset).
Social Trading in eToro
eToro is a platform where you have an internal social network. In this social network, you can see all public investors of eToro.
The advantage is that you can see all the movements of the Top Investors in eToro, and choose one to copy their moves.
So if you don’t have much knowledge, this “CopyTrader” function can be beneficial. Since you can choose someone with more knowledge and copy their strategies.
Traders who receive more copies also have benefits as they receive up to 2% extra of their assets.
To access this function, you simply choose a person, select “Copy” and the amount you want to invest in that strategy.
There is another type of investment in Social Trading, which is the “CopyPortfolios”. These are divided into two:
- CopyPortfolios TopTrader: This includes high-performance investors.
- CopyPortfolios Market: It groups CFD, ETF, or raw material shares, with a chosen strategy.
The objective of these functions is to reduce the risk of long-term investments and generate investment opportunities.
To access these portfolios, you simply select the portfolio at ease, enter the amount you wish to invest, and you already have the portfolio.
This is a service that doesn’t charge commissions. Also, at any time, you can cancel your investment from the portfolio, and withdraw your money at the current market price.
In eToro, you have a lot of information about investments. In their blog, you have hundreds of posts to read about the platform and the types of investment.
There is also the eToro Club where you have exclusive benefits, personalized service, and access to certain events. Each type of account has personalized advice. You will be assigned an account depending on your estimated capital:
- Silver: $ 5,000
- Gold: $ 10,000
- Platinium: $ 25,000
- Platinium+: $ 50,000
- Diamond: $ 250,000
Each type of account has different benefits, but the benefits common to all types are personal account manager, webcasts live, and daily market summary.
These tools can help improve your investment strategy.
If you are an experienced investor, you can also access a professional account on eToro.
Professional accounts have advantages such as leverage up to 1: 400 (x400) in specific instruments. This allows access to larger investments and larger returns.
It also has some disadvantages since they are exempt from certain ESMA protections. Retail customers are protected by ESMA clauses.
eToro is a company created in 2007. Currently, its platform is available almost everywhere in the world.
It is one of the most innovative platforms that has launched many programs such as CopyTrader, Social Trading, and Popular Investor.
In Europe, eToro is regulated by the CySEC (Cyprus Securities and Exchange Commission). In the United Kingdom, it is regulated by the FCA (Financial Conduct Authority) and in Australia by the ASIC (Australian Securities and Investment Commission).
These organizations are dedicated to regulating the behaviors and movements of financial companies. Its objective is to protect the rights of consumers.
eToro Review: Should you join eToro?
So is eToro a reliable broker to register?
Before answering this question, it should be mentioned that in eToro you can operate in two ways; on the one hand buying assets in your name, or on the other, with CFDs (which carry a high risk due to leverage).
In all eToro disclaimers, it says that 75% of people who trade with CFDs lose. But it doesn’t mean that you cannot be part of the 25% that if you win (if you know what you are investing in). So these tools are for knowledgeable investors.
On the other hand, if you want to invest in stocks or cryptocurrencies by acquiring the assets, it is much less risky than trading with CFDs.
So, to conclude with this eToro review, we can affirm that it is a reliable platform. Around the internet, there are many negative comments. Still, if you read correctly, they are because they didn’t understand the conditions of the CFDs correctly.
Also, as soon as you register, you receive a $ 100,000 virtual credit to start trading and learning strategies.
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