Review about eToro — 2019–2020
This article will introduce eToro, discus whether it is a good option for you, and suggest why you want need some financial advice in some circumstances. The article will conclude with some shocking statistics.
eToro: introduction
eToro is a good online social trading platform with the availability of multiple assets for trading. The prime features of eToro are providing financial services and copy trading services in various assets including Stocks, CFDs, and cryptocurrency.
Having its registered offices in Cyprus, Israel, U.K, and Australia, eToro has been one of the famous and leading social platforms in its category with a company value of $800 million and registered users over 6 million.
It was founded in the year ‘2007’ in the city of Tel Aviv which is located in Jerusalem. The people who started eToro were Yoni Assia and Ronen Assia along with David Ring. Started as a general trading platform, eToro’s social investing platform with the copy trading feature was launched in the year ‘2010’. It is considered to be one of the best trading platforms for people living in Europe.
Most of the investors from different countries are able to make a trade using eToro. Although there are a few countries where eToro is blocked which are USA, Canada, Cuba, Japan, North Korea, Iran, Syria, Turkey, Serbia, Albania, and Sudan. If you find yourself in a region other than the above-mentioned countries, you can be able to make a trade using the eToro trading platform.
eToro’s catalogue consists of 47 currency pairs, 19 commodity/index CFDs and 1500+ shares. It is considered as one the best when it comes to cryptocurrencies as it offers 77 crypto CFDs.
In terms of regulation, the trading platform of eToro maintains its integrity by serving the investors from the UK through an FCA (Financial Conduct Authority) regulated entity. Similarly, it deals with Australian clients by the Australian entity and other clients by the Cypriot entity.
eToro Fee Structure:
eToro has substantially low charges for people living outside of the EU and for the people living in the Europe eToro offers free of cost Stock and ETF trading. Though the fees are very low when compared to many other trading platforms, eToro has Finance Rates, Withdrawal Fees and Inactivity Fees higher than most others.
eToro charges a $25 withdrawal fee per each withdrawal transaction. It also charges Inactivity fees of $10 per month after the customer is completely inactive for a period of one year.
It has been proved that eToro has very low fees for Stocks. For example, the benchmark fees of certain stocks such as Apple, Vodafone, etc, is $0.0 making it one of the best trading platforms available with very low benchmark fees. Non-EU clients are charged with a benchmark fee of $3.6.
The FX fee on eToro is also considered as average and not too pricey. For example, the fees for the popular currency pair EUR/USD is $19.1 which is neither the lowest price nor a highest price when compared to others.
eToro has high financing rates and charges non-trading fees, inactivity fees, conversion fees, etc. which is a huge backdrop for this.
Financing Rates are the charges applicable to the customer when he/she holds a leveraged position for more than a day. Annual rates for finance are very high on eToro when compared to other brokers. For example, finance rates on eToro are 8.9% for stocks and 3.7% for FX.
The conversion fee of eToro depends upon the currency. The Conversion fees are as follows: 250 Pips/EUR, 50 Pips/GBP, 250 Pips/CAD, 250 Pips/JPY, 100 Pips/AUD, 50 Pips/RUB and 50 Pips/RMB. The customer is charged with the conversion fees when they deposit or withdraw money from their account using a currency other than USD.
‘Wallet Fee Structure’ — eToroX (The Blockchain Substitute of eToro) charges 1% and the third-party service provider Simplex charges 4% fees. For each crypto transaction, blockchain fees are applicable and after Simplex approves the transaction the market rates are decided by eToroX. Additional charges (such as foreign transaction fees) depend on the terms of the Bank or Credit Card issuer that has issued the credit card.
Any type of pending payment will be canceled and a ticket will be created automatically regarding the problem status. If the approval is done, then the transaction cannot be canceled. Any issues with this category are dealt primarily by the Simplex service team and the customers can also approach the eToro service team regarding the issues.
Fees aren’t when opening an account on eToro, they charge fees based on the spread. Each type of cryptocurrency has different spreads which may not be guaranteed. The market is available 24/7 when trading with cryptocurrencies. The minimum spreads of different cryptocurrencies are mentioned in the table given below:
InstrumentSpreadSellBuyBitcoin (BTC)1.5%-0.471233–0.471233Bitcoin Cash (BCH)5%-0.140Dash (DASH)3%-0.0394520Ethereum (ETH)2%-0.036712–0.036712Ethereum Classic (ETC)5%-0.0017260Litecoin (LTC)3%-0.0065750NEO (NEO)5%-0.0123835620Stellar (XLM)5%-0.00004160Ripple (XRP)3%-0.0000220
Opening an Account on eToro:
The process of opening an account on eToro is fully digital and very simple. They offer two types of accounts where one is a demo account (which uses play money) and the other one is a real-time account (which uses real money).
For creating a demo account and making trade predictions in order to get familiar with trading on eToro, the customer won’t need to submit any sort of proof. The customer can sign-up using a Google account or else he/she can register using a Facebook or Google Plus account. They instantly get $100,000 cash (play money) into their demo accounts.
For making a trade online using real money, the customer would be asked to submit their Identity Proof (most preferably a copy of their Passport or Personal ID) and Residence Proof (copy of a Bank Statement of the customer or any kind of Utility Bill).
‘Deposits on eToro’ — eToro offers its customers free deposits with absolutely no charges and has a wide variety of options for making a transfer such as Direct Bank Transfer, Credit Card, Debit Card, Paypal Wallet, Skrill Wallet, Neteller Wallet, etc.
Bank Transfer option usually takes around 3–5 days whereas the Credit/Debit Card and Wallet Deposits are made instantly. While making a deposit there is no maximum limit using bank transfer. Credit/Debit card deposits usually have a limit of $20,000, while electronic wallet deposits have a limit of up to $10,000. Deposits can only be made with sources having the customer’s name.
‘Withdrawals on eToro’ — eToro charges fees while making a withdrawal from the customer’s eToro account. It charges $25 per each withdrawal and the minimum amount the customer can be able to withdraw at a time is $50. The transfer options are similar to that of while making deposits.
The withdrawal process for credit card/debit cards and wire transfer normally takes up to 8 days (working days) and for electronic wallet transfers, it takes 1–2 days. Like the deposits, the withdrawals can also be made to accounts that are under the customer’s name.
Web Trading Platform on eToro:
The Web Trading platform on eToro comes with a user-friendly design and excellent features such as Social Trading. The web-based platform of eToro is one of a kind and has a modernized look when compared to other brokers.
The languages in which the web-based platform is available are: English, German, Spanish, Italian, French, Russian, Greek, Arabic, Polish and Chinese. The latest version of the eToro trading platform is considered as one of the best trading platforms available in the category.
It has a simple and optimized look and looks very cool. The customization on the web-based trading platform is a little bit hard.
The customer can easily find out the desired results using the built-in search function. The security of eToro is very good and consists of a two-step login system.
The alerts and notifications on this are one of a kind and alerts are received when the order reaches the target set by the customer.
Mobile Trading Platform on eToro:
The mobile platform also has a good user interface and an excellent design. It is available for both IOS users as well as Android users. The mobile platform is also considered as the best option for trading online when compared to other brokers.
It also has a good user-friendly design and secure login feature with two-step authentication. The user gets push notifications while using the mobile trading platform. It is available in the same languages as the web-based trading platform.
There is no desktop trading platform separately available for eToro. The customers can utilize the web trading platform while using eToro from a desktop.
Research on eToro:
Some of the best tools are available on eToro for research and analysis. The customer also gets recommendations for most of the stocks while using eToro.
Basic Fundamental data (such as the profile of the selected company, ratios, dividend yield details, etc.) is available for the user to make detailed research about different companies and their stocks. The huge backdrop of fundamental data available is that it is limited data. The news feed of eToro is also limited.
Up to 70 indicators can be used with the help of the charting tool on eToro. Customers are able to access a news feed where other investors post messages and posts. This is like a traditional social media news feed (like Twitter, Facebook) for investment-related posts.
Customer Service on eToro:
eToro provides customer support through email system. It does not have a live chat feature or a telephone support service available. It is said by many customers that the email support system takes a lot of time to reach back to the customers.
The service team on eToro resolve the customer issues through a ticket-based system. Usually, the email support takes up to 3 hours and sometimes even a longer time to receive replies. This is considered as a backdrop as the customer who wants instant resolution has to wait for the service team to reply.
Copy Trading on eToro:
This unique feature of eToro enhances the customer to make very effective social trading which is known as Copy Trading. With the help of this special feature the investor can copy the trades of some other users on eToro who follow a set of Risk Controlling Rules.
In simple words, the client on eToro can be able to make a trade by browsing through the various users present on the eToro platform. The user can be able to make a trade based on the previous performance of the investor whom he/she chooses to copy from.
Using the copy trading feature of eToro, the client can access necessary information about other users such as news feed comments of the user, profile description, number of trades made in a period, holding time, their previous performance on eToro, etc. The minimum amount you can invest in a trade using this feature is $200 and the maximum amount is $500,000
This feature can be quite helpful when it comes to making a trade while having intermediate knowledge. The maximum number of users whom a client can be able to copy are 100. The client should keep in mind about the market risks (losses that can occur) while copying another user in order to make an effective profit on this trading platform.
The copy trading option is not an option for financial advice and we strongly suggest that you discuss with your financial advisor/broker while making a trade on these types of online trading platforms.
Copy Portfolio on eToro:
Unlike the copy trading feature where you can be able to copy a trader, The Copy Portfolio feature helps the client in making the trade in a theme or other eToro client’s portfolio. It is primarily considered as a CFD portfolio.
Investing in a theme usually suffices that you can invest in the portfolios of big investment banks (CFDs of banks like HSBC, Citi, Bank of America, etc.) or you can invest in the portfolios of cryptocurrencies (Crypto Copy Portfolio).
Other than the above-mentioned theme-based copy portfolio option, you can just invest in the portfolios of other traders effectively. You can choose from various users available on the eToro platform and make an investment on multiple users.
You can make a decision while copying the portfolio of other traders based on features like the trader’s performance, asset distribution, and proportion of CFDs of the respective trader. eToro’s external partners/algorithms design a theme based on which the copy portfolios are built.
The minimum amount of money required as an investment for using the copy portfolio feature is $5,000. The eToro platform also checks the knowledge of the client before the client makes use of the copy portfolio feature in order to make sure that the copy portfolio feature is suitable for the client or not.
Stocks and ETFs on eToro:
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