eToro Review 2024

eToro Review Summary

eToro is a social-trading-focused broker founded in 2007. A pioneer in social trading, the brokerage has more than 30 million active traders from all over the world. The broker has several divisions operating in different jurisdictions and is licensed by multiple regulators. 

The trading conditions on eToro are unique but not necessarily attractive. For instance, there’s a standard $5 withdrawal fee, which might seem symbolic, but the reason they charge it is unclear. We also found several other restrictions, such as mandatory take-profit and stop-loss, which might hinder certain trading strategies.

Still, eToro is a great option for anyone looking for a brokerage offering social copy trading. Plus, its success and longevity points to the fact that the company delivers great value to its customers in its social trading niche, with over 3,000 tradable assets and exclusive perks for sharing trading strategies. In this review, we’ll look at the trading experience on eToro and give you a full review of the platform.

Overview

eToro is a social trading platform founded in 2007, known for its innovative approach that combines social trading, investment in stocks and cryptocurrencies, and a user-friendly interface. eToro offers free stock and ETF trading, one of the best crypto selections in the industry, and easy account opening. 

Perhaps the biggest draw to eToro is the social copy trading platform. It offers its 30+ million users access to over 3,000 financial instruments to trade, with a collaborative trading community where members can share insights, copy trades, learn from each other, and help one another grow. The broker prides itself as an online social trading platform. More on this later.

eToro has headquarters in Australia, Cyprus, the United Kingdom, the United States, and the United Arab Emirates. It has also been regulated by CySEC, FCA, FINRA, and the FSCA. The broker serves millions of customers from 140 different countries, including the EU, UK, USA, and Australia, to mention a few.

Regulation and Security

eToro is regulated by several financial authorities, including the Financial Conduct Authority (FCA) in the UK and the Cyprus Securities and Exchange Commission (CySEC). The licensing under different jurisdictions is as follows:

• eToro (Europe) Ltd. – licensed and regulated by the Cyprus Securities and Exchange Commission (CySEC).
• eToro (Europe) Ltd. –  registered with De Nederlandsche Bank N.V. (DNB) as a cryptocurrency provider.
• eToro (UK) Ltd. – licensed and regulated by the Financial Conduct Authority (FCA).
• eToro AUS Capital Limited – licensed and regulated by the Australian Securities and Investment Commission (ASIC) license number (AFSL) 491139.
• eToro USA LLC – licensed as a Money Service Business by FinCEN, and eToro USA Securities Inc. is a member of FiNRA and SIPC.

These regulatory bodies are known to be some of the strictest in the world, and to meet their requirements, eToro has to:

1. Segregate client funds from its operating capital. As such, eToro can’t use your money to bail itself in case the company goes bankrupt.
2. Restrict leverage for Forex trading (especially for UK clients)
3. Provide clients with negative balance protection such that they cannot lose more money than they have in their trading accounts.
4. Limit bonuses and promotions, and no trading on crypto CFDs

Keep in mind that for many countries and regulatory bodies, the safety requirements may be different. For instance, to comply with the UK’s FCA rules, eToro is insured to cover up to 1 million.

Trading Instruments Offered

eToro offers over 3,000 financial instruments, including stocks, cryptocurrencies, commodities, indices, and forex pairs.

Stocks

eToro offers over 3,000 stocks from 20 exchanges around the world. The broker lets you trade the underlying stock, ETFs, and CFDs, with the ability to buy fractional shares. Non-leveraged stock purchases of the underlying stock mean that you may be eligible for dividends in proportion to the number of shares owned. Leveraged positions (and Shorts on an asset) are executed as CFDs. Traders also get free access to TipRank Expert stock analysis. 

Forex

Forex trading on eToro lets you buy and sell a range of 49 international currency pairs. Their simple platform, the active community, and the availability of trading tutorials and tools make it a great platform for forex trades. However, the rather expensive spreads and a limited number of exotic currency pairs might be a deterrent to some forex traders. 

Commodities

eToro offers 26 different commodities via CFDs, including oil, natural gas, gold, silver, platinum, and more. You can trade these at a variety of leverage options based on your account size and the underlying asset. There are also ETFs that track commodities and stocks of different companies that produce or deal with these commodities. 

Indices

There are 20 options for trading major indices in Europe, the US, and Asia. you can buy and sell indices via CFD with or without leverage on eToro. You can trade and invest in local and major markets through these indices, including the SPX500, UK100, US Dollar Index, and the Nasdaq100. 

ETFs

eToro has one of the richest varieties of ETFs to trade or invest in. Some of the most popular ETFs on the platform include TLT, SPY, HMMJ, and VXXB. 

Cryptocurrency

There are 108 supported cryptocurrencies on the eToro platform. Traders can find crypto-trading ideas, invest in crypto, and even copy other traders or crypto-based portfolios. The good thing about trading crypto on eToro is that you’re buying the underlying asset, and you can withdraw it using their mobile wallet app. You will also earn Crypto Staking Rewards if you hold eligible crypto assets. The app serves as a custodian with a multisig scheme. 

Dividends

We love the fact that eToro will credit your account if you hold a stock of ETF that pays dividends. This applies to any eligible positions that you open manually and positions in your SmartPortfolio.

Proprietary Instruments

Smart Portfolios are proprietary long-term investment portfolios based on a given theme that are created and rebalanced by professional analysts on eToro. Each has its investment strategy, such as following the investment strategies of prolific investors like Warren Buffet. There are no portfolio management fees with Smart Portfolios. 

Spread, Fees, and Commissions on eToro

You can open an account on eToro for free, but you should know that there will be fees charged when you trade on a live account. Depending on your country, eToro has a minimum deposit requirement of $10 to $100, which makes it accessible to most traders. Keep in mind that all subsequent deposits need to be at least $50. 

The fee structure on eToro is quite elevated compared to other brokers. To better understand eToro’s fee structure, the following are the main types of fees on the platform:

Trading fees

When you make a trade, you might be charged a commission, spread, or financing rate, otherwise known as an overnight rate. 

Spreads

As mentioned above, a spread is the difference between the sell (bid) and buy (ask) prices in any instrument. Most brokers make their money through spreads, and this will have a significant long-term effect on your portfolio. 

Spreads on eToro are quite high. For instance, eToro has an average spread of 1 pip for EUR/USD. However, they do offer social trading features, which are not available on many other brokers. On CFDs, the spreads are fixed at 0.09% of the price.

Swaps

The financing rate (swap rate) is charged on CFD trades that run overnight. The swap fee is applied at 17:00 New York time on all open positions. The daily and weekend swap amount charged is displayed at the bottom of each order ticket. 

Commissions

Investing in stocks and ETFs is commission-free on eToro, which makes it a great option for those looking for a long-term investment broker. There’s also no limit on the number of commission-free trades you can make. The broker also absorbs Financial Transaction Tax and Stamp Duty for traders where applicable. 

Withdrawal fees

eToro’s withdrawal fees are some of the most controversial. Every time you request a withdrawal from the broker, you are charged a flat fee of $5, no matter the withdrawal amount, the payment processor you choose, and your geographical location. Third-party fees beyond eToro’s control may still apply. This is a tough one to swallow, considering most other brokers do not charge withdrawal fees internally, except for bank wires. 

It doesn’t end there. The minimum withdrawal amount is $30, and only verified accounts are allowed to request a withdrawal. If your trading account balance goes below $30, good luck trying to withdraw it, as you will need a total of $35 to cover the withdrawal fee. The only way out is to close the account.

Deposit Fees

Depositing money is free as long as you use one of their supported currencies (e.g. GBP, USD, EUR). otherwise, you may have to pay forex charges. The currency conversion fee for using an unsupported currency is quite expensive, though how much you pay will depend on your eToro Club level and the payment method. 

Keep in mind that if you trade from the UK, you might need to convert your GBP to USD (and vice versa). The conversion is done at 50 pips for both withdrawals and deposits, which is about 0.4% of the total amount. Withdrawals and deposits via PayPal or credit/debit cards are converted at 150 pips. 

Inactivity Fees

If your account is inactive for 12 consecutive months, you will be charged a $10 inactivity fee per month until you log into the account or the balance reaches $0. No open positions will be closed to cover this fee. 

Account Types

On eToro, retail traders can choose to become professional traders. To do so, you only need to pass a test to establish your suitability. The professional account will give you access to higher leverage, with the trade-off being waiving certain ESMA protections such as the Investor Compensation Funds.  

Club Tiers

While there’s only one type of account, clients who make higher deposits are eligible for eToro Club Membership, which is available in 5 tiers and brings in more advantages and rewards based on the tier. Some of the benefits include free withdrawals, free market analysis, analyst consultations, access to a dedicated agent, access to a trading signals platform, and more. 

Trading Platforms

The primary trading platform is a web-based interface, which is user-friendly and suitable for both beginners and experienced traders. The interface is centered around social trading features, allowing users to interact and copy the trades of successful investors.

Charts are provided by TradingView, though the platform lacks advanced features available on other brokerages. For instance, API and Algorithmic trading are not available. The absence of MT4 and MT5 options is also worth noting. 

For stocks and ETF traders, eToro offers third-party analytics from TipRanks. Each asset has a tab covering its analysis and information about hedge funds who bought or sold the stock. It also gives you the price targets of a stock from various investors and institutions. 

Trading Tools on eToro

There’s a surprisingly large variety of tools and charting options on eToro, considering the broker uses a proprietary platform, unlike most other brokers.

Financial Calendar

eToro has a comprehensive financial calendar where you’ll find information about upcoming financial events. These events range from official government data releases to quarterly earning reports for specific stocks. There’s also information about the consensus forecasts about the impact of each of these events.

CopyTrader

This allows you to copy other people’s trades automatically. You just need to choose the investor you want to copy and with a simple click of a button, you start copying their trades automatically. You can set a stop-loss level to limit the potential losses you may incur.

Do note that the minimum amount you need to copy a user is $200. You can copy up to 100 traders at a go. Additionally, even without copying any traders, you can view millions of other users’ stats, portfolios, and risk scores.

News Feeds

Every asset on eToro has its own news feed which features the latest news, updates, breaking news, and posts from other users. Every news piece is given a positive, neutral, or negative rating to give you an idea of what it could mean for the future direction of the price.

Analyst Recommendations

Each asset also has a page with recommendations from professional analysts where applicable. This is provided alongside market research, financial data, and information about which hedge funds bought or sold the asset. There is also information about the latest upgrades or downgrades for each stock, as well as the trending buying or selling sentiment for commodities and currency pairs.

Mobile Trading App

eToro has a well-designed and easy-to-use mobile trading platform available on both iOS and Android platforms. We like the fact that the app is also constantly being updated to add new features and instruments to trade on.

The app is also fully featured, with great customizability and functionality. You can trade from the full charts, deposit and withdraw funds, transfer funds/assets, create watchlists, search for instruments, and even access the latest market research and news about various assets; all under one roof. 

The only downside, as already pointed out, is the lack of auto-trading options, other than copy-trading. There’s also no support for MT4 or MT5. Still, eToro offers one of the most comprehensive trading platforms that’s beginner-friendly and easy to use. 

eToro Demo Account

Every trader on eToro is eligible for a virtual portfolio of up to $100,000 to trade with. You can always switch to this account in the settings and use the virtual dollars to trade on the platform as you would with real money.

This is one of the best demo accounts available, considering it doesn’t expire and lets you access nearly all the features with no strings attached. With the demo account, you can practice your trading skills and keep track of your performance to see what works and what needs work.

Educational Resources

eToro provides an academy of educational resources, including a blog, educational videos, and a comprehensive help center. There are videos explaining the basics of how to invest and how to make the most out of the eToro platform. There are also guides and blogs that go into deeper financial concepts and explain them in simple terms.

These educational resources are quite helpful in explaining:

• eToro platform features and available tools
• CopyTrading rules
• Foundations of trading and investing
• Latest market news and trends

Although much of the educational content is specifically aimed at beginners, there are some webinars and videos available for advanced users. Prolific traders also regularly hold webinars and training sessions in partnership with eToro. This means that even for those that have made significant progress in their trading journey, there will always be something new to learn.

Educational content on most trading platforms tends to be below average. It’s commendable that eToro’s content is better than average. It would be counterproductive to assume that any broker will provide actionable investing or trading strategies that will lead to consistent profits. Their financial interests are almost always opposed to traders’ profitability.

Customer Support

Customer support on eToro is available 24/5 via email, ticket system, and live chat. The company clearly places a strong emphasis on customer service and satisfaction, and has made it easy for traders to get in touch with a representative whenever they need assistance. 

The platform’s extensive Help Center and FAQ section addresses common queries. 

Customer Reviews

Across the web, eToro has garnered a great reputation with glowing online customer reviews to back this up. On average, it has a rating of between 4 and 5 stars, with their mobile apps being rated among the best in the industry. 

Is eToro Right For You?

eToro is a great choice for those who value social trading features and traders looking to trade forex, stocks, commodities, ETFs, indices, and crypto by copying the moves of other traders. The brokerage essentially lets you outsource your trading decisions to people with the skills and track record to show they know what they’re doing. So, if you want to skip spending years learning about technical and fundamental analysis, eToro is a perfect option. 

The ability to buy fractional shares, and underlying instruments without leverage and swap fees makes the brokerage a well-rounded option for those looking to invest for the long term in multiple assets. The constant addition of crypto assets, stock exchanges and ETF selection further adds to its appeal.

However, there are some drawbacks. The complex fee structure and the higher-than-average fees than you’d find on other platforms is a major turn-off. But perhaps what you lose in higher fees, you gain in time. Trading is a skill that often takes years to develop. 

Cautious investors as well as medium to long-term investors who understand the risk that comes with leverage will feel right at home on eToro.