eToro specializes in social trading and investments. You can follow a trader or traders of your choice or choose to invest in any number of pre-determined portfolios. The firm is aiming more for investors than for short-term traders or scalpers. It offers an unusually wide range of stocks (around 3,000) from markets around the world, both in CFDs and cash. Trading in stocks and ETFs is free, while fees for trading FX and CFDs are slightly higher than the market average, although given the expected longer holding period this is probably not significant.
You can only access eToro through its proprietary platform, which is available in both web and mobile form. It’s intuitive and relatively easy to use. The company has been in business for 15 years and has some serious regulation in the US, UK, Europe, and Australia, making it a safe choice.
Note: clients in the US can only trade stocks, ETFs, and cryptos through eToro.
eToro is probably the pre-eminent broker for social trading and a good choice for those who want to invest rather than trade. If you want to follow someone else’s trading (or find people to follow you!), or put your money into stocks or funds for a period of time, it’s top-notch. The platform is intuitive and simple and the company is as safe as any broker around.
The broker is not the best choice for those who want to trade aggressively, e.g. buy now and sell in 10 minutes for a 5-pip gain.
eToro is different from most other brokers. Rather than aiming at the go-it-alone crowd, it specializes in social trading and investments. Its motto is “Empowering a global community of investors.” Note they say “investors,” not “traders.” Its target audience is a) people who want to follow other people’s trading and conversely b) those who want to make some extra money by having others copy their trades. You can follow a trader or traders of your choice. Or you can let eToro and its partners manage your money by putting it into one of their professionally managed portfolios of stocks, bonds, commodities, FX, cryptos, or some combination of them.
On the other hand, scalping is expressly forbidden and there’s no capacity for automated trading (robots).
eToro sometimes acts as a market-maker, sometimes as an agency broker, depending on which entity your account is with. For example, the UK and European entities are both market-makers but can also act as agency brokers if the firm decides it’s necessary for risk management
The company has been in business for 15 years. Although it isn’t publicly listed and doesn’t have a bank parent, it has some serious regulation in the US, UK, Europe, and Australia, although people onboarded from elsewhere may be under the Seychelles entity. So I’d say it’s as safe as an online broker can be.
Certain premium clients who are trading with the European or Australian entities are automatically covered by eToro’s private insurance policy. This is a 1 million EUR/GBP/AUD per client insurance policy provided by the legendary Lloyd’s of London in the unlikely chance that eToro goes bust. Moreover, clients’ funds in their eToro account are held in US banks and are FDIC-insured up to $250,000 per account.
As far as I can tell, the company’s only run-in with the authorities was a relatively minor incident in 2013, when CySec fined eToro a small amount for unspecified “weaknesses” in “the organization/operation structure.” These flaws have since been rectified and there’s been no trouble since then.
Can I trust eToro? Yes, as far as we can tell. (Remember though that there are no guarantees in life except death & taxes.)
Yes, eToro is regulated in several countries by some of the world’s strictest regulators. The regulator you’ll be covered by depends on where you live:
All other clients are onboarded through eToro (Seychelles) Ltd. and are therefore covered by the less-rigorous regulations of that island nation, while benefitting from the fact that the company has to meet those other regulators’ requirements regardless.
Yes, eToro is well established in the US and most US residents can trade cryptos, actual stocks, and exchange-traded funds (ETFs) with eToro.
Stock trading is through eToro USA Securities a broker-dealer registered with the US SEC and a member of FINRA and SIPC. Crypto trading is through eToro USA LLC, which is regulated bystate regulators. It’s also registered with the Financial Crimes Enforcement Network (FinCen), a US Treasury agency, as a Money Services Business.
However, residents of Hawaii, Minnesota, Nevada, and New York state, plus some other territories such as Puerto Rico, can’t trade with eToro because of local regulations. (Why Nevada, the one state in the US where gambling is legal? Cryptos are no riskier than slot machines.) US traders can also only copy other US traders.
Alas, US citizens who live outside the US, like me, can’t open an account with them at all, as is the case with many companies. But I still have to pay US taxes. We US expats really get screwed!
eToro’s major offices are in the US (Hoboken, New Jersey), UK (London), Cyprus (Limassol), and Australia (Sydney). It also has offices in Israel, Gibraltar, Malta, Denmark, Germany, Singapore, Seychelles, and Belgium, as well as several regional offices in the US.
eToro is a privately-owned company. It was founded in 2007 by Yoni Assia, the CEO, and two other people as a financial trading technology developer. It is backed by several large venture capital firms from the US, UK, Germany, China, and Israel.
The company started out with its Visual FX social trading platform, which developed into WebTrader in 2009. The OpenBook platform, powered by the new CopyTrader technology, was added the next year. This was the world’s first social trading platform (according to eToro; this claim has not been independently verified.) The two platforms merged in 2015.
It now has over 13mn customers in over 140 countries.
eToro doesn’t sponsor any tournaments or contests.
Yes, we believe eToro can be trusted. It’s regulated by several of the major regulatory agencies around the world and it has a long history in the business without any major hiccups. Hundreds of thousands of people around the world use the firm without anything more than the usual disagreements.
The pre-set leverage levels are fairly high, but you can change them for each product. This is a useful feature that not all brokers have.
When you take a position in stocks, ETFs, or cryptos without any leverage, you’re buying the asset itself, not a CFD. Any positions with leverage are CFDs.
eToro has only a standard trading account. It’s designed for both direct trading and copying transactions. (A separate account can be opened when trading US stocks.)
Within that standard trading account there are two other types of accounts:
For those following other traders: CopyTrader is a system for copying other traders’ transactions as they take place. You can browse the detailed profiles of other eToro traders and select up to 100 people to follow. All their transactions are then copied into your account. You can decide how much to allocate to each trader, whether to copy trades that they already have on or only new trades, and whether to set a maximum drawdown limit (i.e., you automatically stop copying them if they suffer a pre-set loss). You retain full control of your portfolio in any case and can close out any positions at any time.
For people following trades, eToro has a VIP club (called the eToro Club) with five tiers of membership depending on the amount of money you have deposited with them. As you’d expect, the more money, the more perks.
For traders being followed: Traders who are being followed participate in the Popular Investor program. This has four levels, and of course here again you get more and more perks as you move up the ladder. To start on the ladder you have to have more than $1,000 in an account, at least $500 in other customers’ assets following you, and maintain a “risk score” below 7 for at least two months. The program rewards traders with up to 1.5% a year of the volume of funds managed by the trader, of course on top of any profits you make from trading. Nice work if you can get it.
(What is the “risk score”? According to eToro, The Risk Score is a key feature offered by eToro that enables you to manage your total portfolio’s risk. It’s a numeric value, ranging from 0–10, where 10 is extremely high risk and 0 is extremely low risk. These numbers are not arbitrary – there is a thorough calculation behind them.)
Retail clients can grow into professional traders by passing a test. This will open the way to higher leverage but also eliminates some protections under the European Securities and Markets Authority (ESMA), such as the Investor Compensation Funds and recourse to the Financial Ombudsman Service.
As usual, there is also a professional account for high rollers who meet various requirements that you probably can’t meet, so don’t worry about it (unless you happen to have EUR 500,000 sitting around and have worked in the financial industry).
eToro’s fees are a mixed bag. On the one hand, some of their trading fees are the lowest in the business – you can’t beat free! On the other hand, some of the non-trading fees are unusually high. In short, fees start low but escalate as you trade, although large traders can get rebates. (Fees can also vary from country to country; the fees for the US in particular are different from those elsewhere.)
Exchange-traded stocks: There’s no commission on trading actual stocks (although for Australian clients that only applies to US stocks). You can also buy fractional shares. You can’t use leverage when you buy stocks.
Since all eToro accounts are in USD, what happens when you buy non-US stocks? The company converts the price to USD at the-then current market rate without any commission. It also absorbs any stamp duty that might be due when trading in the UK. Thanks!
Trading CFDs is also commission-free, but there is a bid-offer spread, ranging from a lower 0.75 point for S&P 500 CFDs to an average of 3 points for Eurostoxx 50.
Non-trading fees: as mentioned elsewhere, there’s an unusual $5 fee for withdrawing money. There’s also an unusually high inactivity fee of $10 a month for accounts that have been idle for a year (Just logging in counts as “activity” so I don’t blame them.)
There is a swap (commission for shifting transactions to the next day).
Conversion fees: charged if eToro converts money to fund your account (i.e. you send euros to deposit into your eToro account and the broker converts them to USD, which is the only account currency available at the broker). These are 0.50 pips, which is about par for the course. An online bank would probably charge you similar for the transfer.
On the other hand, they don’t charge any commission when buying non-USD stocks. So if you buy a German or UK stock, which isn’t denominated in dollars, eToro will convert the price into USD at the market rate (or so they say) prevailing at the time without commission or markup. They’ll also pay any stamp duty that’s liable on trades in the UK.
Cryptocurrency trading: There’s a 1% commission on trading cryptos on top of the bid-offer spread. You pay the commission both going in and coming out (that is, both buying and selling) so you have to make at least 2% plus the spread in order just to break even on your trade. This is not unusual in the industry and indeed may be relatively cheap for some lesser-traded coins.
Copy trading services: No visible fees here but of course there’s a bid-offer spread.
FX spreads are variable but can be one pip in EUR/USD, which is a bit higher than average for the industry (around 0.9 pip). Scalping isn’t allowed however so the difference between one pip and 0.9 pip isn’t going to be a deciding factor in whether to go with eToro. (Note: they don’t define scalping in their rules of trading, so the boundary between “day trading” and “scalping” may be unclear. In any event, eToro is designed for people interested in investing, not day trading in the first place, so this shouldn’t be a problem – if you want scalping, there are other brokers to look at.)
For US clients, eToro offers some 2,000 stocks (including fractional shares), stock options, and 263 ETFs. The main attraction for US clients though will probably be the unusually large range of cryptos (24). There’s no CFD trading, which is not allowed in the US. eToro also doesn’t offer FX in the US.
Copy trading in the US is limited to cryptos; you can’t yet copy trade others’ stock market investments (although eToro says they’re working on it).
In other jurisdictions, eToro offers an even wider range of stocks: 3,106 stocks on 18 exchanges (they say 17 but I counted 18), ranging from three in the US to Oslo in the north, Saudi Arabia in the south, and Hong Kong in the east. Stocks on a few exchanges (eg Australia) are available as CFDs only, but traders in most jurisdictions can own the stock itself if they choose. This is unusual for this kind of broker. You’ll receive the dividend if it pays one out while you’re holding it (on the other hand, you’ll be liable to pay it if you’re short.) This is a great arrangement for people wanting to trade stocks but not so great if you’re interested in holding them for the long term or if you want to buy them for dividend income. That’s because the company deducts the 30% default US dividend tax before paying the dividend to you, instead of the tax treaty rate, which is usually lower. That’s what a specialized stock broker would usually charge.
eToro also has a wide range of cryptos available: 69 at the time of writing, but who knows how long all of these will be in existence? You can also trade crypto crosses (like ETH/BTC) and trade cryptos vs fiat currencies other than USD.
The firm offers a good number of commodities (27) Aside from the usual precious metals and energy, this includes a several agricultural commodities (such as coffee, wheat, and cattle) as well as industrial metals (e.g. copper and aluminum). One of the more unusual ones included is carbon emissions.
You can also trade 16 different global stock market indices, including the VIX and the Russell 2000, plus 2-year, 5-year, and 10-year US Treasuries and the DXY USD index. There are several European market indices plus India, Singapore, and Japan, among others. While this should satisfy most investors, particularly beginners, it’s not up to the level of the market leaders. Does this matter? I mean, do you really need to trade the Ulaanbaatar stock market?
For currencies, the broker offers 49 different currency pairs, which is about par for the course. Several of the lesser-traded currencies are available: CNH, TRY, ZAR, SGD, and the Scandis, as well as Eastern European currencies (PLN, HUF, CZK, RON). Again, this is not for US residents.
While these individual asset offerings should be enough to satisfy most traders, they’re not where eToro’s real Unique Selling Point (USP) lies. Their USP is in their collective investment vehicles, such as their CopyPortfolios. According to their website, these are “long-term investment strategies built using eToro’s social features and vast array of financial instruments. CopyPortfolios bundle data and trades generated by millions of eToro investors into a smart accessible portfolio.” There are three kinds:
Some examples: they may take several traders who have a low risk score and bundle them together in one portfolio that you can easily access rather than having to find 30 low-risk traders on your own. They have one using machine learning plus crowd-sourced intelligence to try to outperform the NASDAQ 100 index. They have a portfolio that follows the oil industry, one that follows companies treating diabetes, portfolios of leading cryptocurrencies, etc.
There’s another similar product, SmartPortfolios. The difference seems to be that these are “groupings of several assets, such as stocks, cryptocurrencies, ETFs, and even people, bundled together based on a predetermined theme or strategy.” Again there are three types: “Innovative Thematic” focused on disruptive technologies; “Top Trader,” and “Partner Portfolio,” in which various other investment firms create their own portfolios for eToro clients.
The minimum investment in a Thematic or Partner Portfolio is $500, while it’s $5,000 for a Top Trader portfolio.
These products are fundamentally different from what most brokers that we cover are offering. They are longer-term investment vehicles similar to mutual funds, not assets to be day-traded for a few pips here and there.
Remember, the key thing to bear in mind when considering social trading is always: past performance is no guarantee of future performance.
The account opening process is pretty easy, quick, and painless. It’s fully digital and should take only one day. You have to start by registering with your email account or with your Facebook or Google account. And that's basically it – you can immediately access the platform and start trading with a $100,000 demo account.
If you want to start trading with real money though there are a few more steps, as you might imagine. You’ll naturally have to upload the usual documents to prove you’re not an exiled drug lord living off your stolen loot on a yacht somewhere, as is standard worldwide, but that shouldn’t be much of a problem.
The minimum deposit depends on where you live. It ranges from an unusually low $10 (US, UK) to an unusually high $10,000 (Israel), with most people facing a $50 minimum and some other countries $200. However the minimum amount for a bank transfer is $500.
One snag: while eToro allows you to deposit funds in 21 currencies, it only offers USD as a base currency for your account. You will therefore get hit with a 50 pip conversion fee when eToro changes your Mongolian tögrögs or whatever into USD. (Disclaimer: I don’t even know if they accept clients from Mongolia.) Since the money has to go out the same way it came in (standard practice in the industry), you’ll get hit with the same fee when you withdraw your money too, on top of the $5 withdrawal fee. Moreover the fee can be even higher for deposits via credit cards in some currencies.
Accordingly we recommend that you open an account with an online bank and convert your money that way before sending it along. Or you can just deposit in USD using a credit or debit card and allow the bank to make the conversion (although I’m not sure how that will work in the other direction). Please note though that online banks also charge a fee for transfers so there may not be all that much savings involved.
There are several ways to deposit money, although not all of them are available in each location. You can of course pay by bank transfer or credit/debit card. Also you can use PayPal or electronic wallets such as Skrill, Neteller, or Sofort. Chinese clients can use China Union Pay, although in some cases the first deposit may have to be made with either a bank transfer or credit/debit card and only afterward with electronic wallets.
There are maximum deposits too, but I doubt if that will present a problem for most people. For credit/debit cards it’s $40k, for PayPal and most e-wallets it’s $10k.
As usual, you can only deposit money from funding sources that are in your name. This is part of the global money laundering rules and will be the same for every reputable broker.
Deposits by credit/debit card are instantaneous, deposits by bank transfer will take longer to process.
If you want to copy a trader, the minimum amount is $200. (The maximum is $2mn but I doubt if that will present much of an obstacle for our readers.) The minimum for copying one transaction is $50.
As mentioned above, eToro charges a $5 withdrawal fee, which is higher than many other brokers. It also has a $30 minimum for withdrawals.. You have the same options for withdrawing money as you do for depositing it. Note that since eToro only has USD accounts, you’ll need to pay yet another accursed conversion fee if you want to withdraw your money in another currency.
Bank or e-wallet withdrawals usually take one or two business days, while a wire transfer can take longer – three days to even a week.
Of course eToro enforces all the usual anti-money laundering rules to withdrawals.
Because of the many special features associated with social trading, traders can only access eToro on its own proprietary trading platform, which is available both in a web version and Android & iOS apps. That’s no problem though because the platform is quite well designed and user-friendly, even for beginners. Everything is pretty much where you expect it to be, such as menus and buttons. You can easily search for specific assets; create watchlists; trade directly from the charts with a swipe; and deposit or withdraw funds. However it’s not that easy to customize charts or the workspace to your preferences. It has two-step login via text to your phone, which is an added safety feature, but no biometric authentication. It’s available in 21 languages (if you count traditional & simplified Chinese as different languages).
The web and mobile versions are quite similar, making it easy to go back and forth. The mobile app naturally has some features that are easier to implement on a mobile platform, such as swiping left or right to access charts or open a trade. However the mobile app is by necessity somewhat pared down. The mobile app also lacks drawing tools, but then again, can you even see the lines when you draw them on a phone?
Placing orders is quite simple and self-explanatory. You can only put in four of the most commonly used order types, namely market, limit, take-profit, and stop-loss. Remember, eToro focuses on investing, not scalping.
Traders can easily set price alerts to let you know when an asset has reached your target level. You also get notified when your order is filled.
For your portfolio report, you can choose to see either a list of your assets or a pie chart showing what you currently own. Finding the fees though is a bit harder. You have to download your account statement, which shows all the cash flows, including fees. They’re listed individually, not totaled up, so it’s hard to see exactly how much you have contributed to the Mr. Yoni Assi (eToro CEO) Retirement Fund.
One downside to eToro’s platform is that it does not support automatic (robot) trading systems, which are widely available on other brokers’ platforms and third-party platforms. That may be a drawback for you, but at least you know that if you’re copying other traders, they’re deciding on the trades themselves, not their robots.
Charting: eToro's ProCharts tool is billed as “a comparative tool for technical analysis.” “It enables traders to view several instruments at the same time, or the same instrument using various parameters (such as different timeframes), presenting a comprehensive picture for analysis.” Concretely, this means around 70 indicators and 13 drawing tools, plus a number of predefined layouts. Charts are automatically saved so you don’t have to waste time creating them over and over. One negative though is that you can only chart data for the last six months. This may be a disappointment to longer-term investors who want to see how the asset has performed over the long term.
Trading tools: We’ve discussed above the company’s social trading features. There are also chats associated with individual assets where you can discuss ideas and commiserate with other traders when the stock you were hoping would pay for your new Maserati instead swallows up your monthly rent check. Solitary traders can also get ideas from looking at what other traders are doing. This kind of trading community is one of the big assets of eToro and makes up a lot for its relatively sparce educational offering.
Research and education aren’t eToro’s main strengths. For some stocks you can get basic fundamentals such as P/E, EPS, and dividend yield, plus analyst consensus recommendations, including price targets, and even brokerage reports. There are some market sentiment indicators based on the trades of the platform’s top traders. The in-house market research is useful but nothing special. You have to move up the ladder to get access to Trading Central’s research, or a Wall Street Journal or Financial Times subscription.
There is a news feed that’s like a Twitter account with messages posted by eToro traders and analysts. It uses hashtags (#) for comments on themes and dollar signs ($) for comments on assets.
For the beginning investor, eToro Academy offers a number of introductory guides, videos, podcasts, and webinars to get you started with the eToro platform and whatever asset class you prefer. There are also occasional training courses available. The company also provides some details next to the symbol for each asset so beginners can get some extra information and facts to consider before pulling the trigger. There’s also a YouTube channel, with videos in Italian Arabic, Spanish, French, and a couple in German, as well as English of course. Many of these are promotional videos though, not educational.
My guess is that eToro figures the people who are copying traders don’t need information to make their own decisions and the people who are being copied already have their own sources, so why spend a lot of money on it? That seems reasonable to me, except maybe the people being copied would do better if they had better info.
Customer support is available 24/5 You can contact them through the feedback form, through social networks, or through a web-based ticketing system that can be painfully slow. There’s no phone support. Live chat is only available for Club-level members, which means $5,000 or more in your account. Other people may find it takes some time to get a response – if you look on the web you may find complaints from disgruntled customers about the time it takes to get a reply to more complex questions. All told this is below average.
eToro is a great choice for beginners who want to discuss the markets with other traders and learn from them. It’s also excellent for people looking for passive investing – who want to participate in the markets without having to monitor their investments constantly and manage them themselves. That doesn’t absolve you from doing your homework, nor does it guarantee that you’ll make money. It just means you don’t have to be glued to your screen all day if you don’t want to be.
For more experienced traders, it’s a good way to make a little (or even a lot!) of extra income by allowing others to piggyback on your expertise.
The only people who I’d suggest look elsewhere would be those who are looking for a platform that will let them trade in and out of the markets many times a day. These people would probably be better served elsewhere.
Regardless of how or what you trade, the broker you choose should be safe to use, affordable, and offer everything you need to trade at your best. That’s why we’re highly selective. We only feature brokers regulated by a trusted authority and we make it easy to compare their fees & features, so that you can make an informed choice.