eToro Review 2022

Trust

The entity we tested (eToro UK Ltd.) is regulated by the UK Financial Conduct Authority and listed on the FCA Financial Register.

In our trust category, we place most importance on how a broker is regulated. So let’s dive in and take a look at how the different entities of eToro across the globe are regulated and how this impacts you as a trader. We rate regulators on a scale of 1 to 3, with 1 reflecting the highest level of trust.

The various entities of eToro are regulated as follows: The various entities of eToro are regulated as follows:

• eToro (Europe) Ltd. is authorized and regulated by the Cyprus Securities and Exchange Commission (#109/10) and covers clients in the European Economic Area (EEA). We rate CySEC as a Tier 1 regulator.
• eToro (UK) Ltd. is authorized and regulated by the Financial Conduct Authority (#583263) and covers clients in the United Kingdom. We rate FCA as a Tier 1 regulator.
• eToro AUS Capital Ltd. is licensed by Australian Securities and Investments Commission, (AFSL #491139) and covers clients in Australia. We rate ASIC as a Tier 1 regulator.
• eToro (Seychelles) Ltd. is authorised and regulated by the Seychelles Financial Services Authority (Licence No. SD076). We rate the Seychelles FSA as a Tier 3 regulator.
• eToro USA Securities Inc. is a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC). CRD#: 298361/SEC#: 8-70212. We rate FINRA as a Tier 1 Regulator.*

*Note: Cryptocurrency trading in the US is offered via a separate entity; eToro USA LLC. eToro USA LLC. is not a registered broker-dealer or FINRA member and cryptocurrency holdings are not FDIC or SIPC insured. eToro USA LLC is registered with FinCEN as a Money Services Business (NMLS ID: 1769299).

Why is it important to know where your broker subsidiary (entity) is regulated?

Different regulators provide different levels of protection. For example, eToro clients in the UK benefit from the oversight of the Financial Conduct Authority (FCA). The FCA requires that clients have negative balance protection, which means that they cannot lose more than their deposit. Client funds must be held in segregated accounts, which are protected in the event of a broker going bankrupt.

In addition, clients of eToro (UK) Ltd. benefit from the Financial Services Compensation Scheme (FSCS) which provides compensation of up to £85,000 to clients in the event of broker insolvency. By contrast, a trader working with a broker entity regulated offshore would not have these benefits guaranteed to them.

In the table below we break down the mandated protections and benefits by entity, regulator and region.

Stability and Transparency

In our tests for the Trust category we also cover factors relating to stability and transparency. Here, we focused on how long the broker has been in business, the size of the company and how transparent they are in terms of information being readily available.

In our research, eToro showed a satisfactory level of transparency in areas such as their regulatory status, fees and general background information. Information and materials are readily available on the website. The regulatory status of different subsidiaries is covered on their Regulation and License page. Trading and non-trading related costs are clearly shown on the Fees and Charges. A User Agreement (Terms of service) document is linked to from the footer of every page. This document covers everything from using leverage and margin to how trades are executed.

In addition, eToro provides insurance of up to 1 million Euro, GBP or AUD from Lloyd’s of London for its clients in Europe, the U.K. and Australia. This protects clients in these regions from suffering losses if eToro ever became insolvent. Finally, all accounts at eToro are segregated, meaning that in the event of eToro’s bankruptcy, client funds are safe.

In summary, we rated eToro as having a high level of trust and stability due to the following factors:

• Being regulated by multiple top-tier agencies.
• Having a lengthy operating history.
• Having a high level of transparency.
• Providing a substantial insurance policy to clients in Europe, the U.K. and Australia.

Fees

eToro offers a Standard Account and a Professional Account. We tested a live Standard Account, but the only difference between the two is the amount of leverage offered. The fees are the same for both accounts.

eToro earns money mainly from spreads (the gap between the bid and offer prices of an asset), overnight fees and miscellaneous charges such as an inactivity fee and withdrawal fee.

Trading Fees

Spreads at eToro are variable, meaning that they fluctuate slightly. The size of the spread depends on the level of liquidity in the market. Liquidity describes the extent to which an instrument can be bought and sold quickly and without moving the market. Tighter spreads are typically seen when there is greater liquidity in the market.

We tested the spreads across different asset classes in a live Standard Account at eToro UK Ltd. using the eToro trading platform and app. The test was done at 8AM GMT and at 3PM GMT on December 10th 2021. We made our tests at two different times to allow greater perspective. 8AM GMT is the London open, when there is a great deal of liquidity in the forex market and therefore tighter spreads in currency pairs. 3PM GMT is a quieter time, shortly before the opening of the New York stock exchange.

Spread costs at eToro were mixed in our tests. In popular currency pairs such as EUR/USD they were competitive. In commodities such as gold they were about average for the industry. In stock CFDs, the spread for the Dow Jones 30 was rather wide (expensive), but in others such as the DAX the spread was more competitive.

Swap fees (the cost of holding a position overnight) were average at eToro.

Overnight fees (swap fees) are charged for CFD positions that stay open overnight and are relative to the value of the position. They are essentially an interest payment to cover the cost of the leverage that was used overnight. Overnight fees are shown on the order ticket when entering an order.

In the table below you can see the Swap Long (the cost/credit of holding a buy position overnight) and the Swap Short (the cost/credit of holding a sell position overnight) for one full sized contract. A full sized contract is 100,000 units of the base currency (the first currency quoted in the pair).

We recorded the data on December 10th 2021.

Non-Trading Fees

An inactivity fee of $10 per month is charged after 12 months with no login activity. This is about average for the industry. Withdrawals incur a fee of $5 and FX rates apply to non-USD deposits and withdrawals.

Are Fees at eToro Competitive?

We found that fees at eToro range from average to competitive. Some instruments such as EUR/USD have competitive spreads, while others such as the Dow Jones 30 Index do not. Overnight swap fees were average. Overall we judged that the fees are fair, given the high quality of the platform and offering.

Platform and Tools

eToro has clearly invested heavily in their proprietary platform and the result is impressive. It is minimalistic and very easy to use considering the breadth of their offering. There is a web platform and a mobile app, but no desktop platform.

eToro Web Platform

The eToro web platform has a minimalistic, intuitive interface and offers a range of great features, including:

• Two-Factor Authentication. Better security can be set up by having a verification code sent via SMS for every log in from a new device.
• Demo Mode. Users can easily switch between a demo account and live trading within the app.
• Alerts. Users can have alerts automatically sent when an asset reaches a set conditions.
• Watchlists. Users can follow popular instruments, a particular asset class, risers and fallers or create their own list of instruments to follow. These can all be accessed under the categories tab.
• Portfolio. Track your investments, their profit and losses and their market value in one list.
• One Click Trading. This feature allows traders to predefine the terms they want, such as trade size. This allows faster order entry for active traders. One click trading can easily be enabled by going to Settings>Trading.

The portfolio page allows users to easily stay on top of their investments and their performance in real time. They can also place trades and set alerts from this page.

Alerts

Setting up price alerts is easy. Simply set the rate or percentage move desired and you will receive an alert in the form of a push notification when the conditions are met in the market.

Orders

Traders at eToro have access to the following order types:

• Market Order. This is an order to buy or sell an instrument at the current best available price.
• Limit Order. This is an order to buy or sell an instrument at a specified price or better.
• Stop Loss Order. This is an order to buy or sell an instrument that is triggered when price reaches a specified level.
• Trailing Stop Order. This is a stop loss order that can be set at a defined percentage or dollar amount away from an instrument’s current market price. It is used to secure profits when you are in a winning trade, while not having to exit the position.

Some advanced orders such as conditional orders, time in force orders and guaranteed stop loss orders are not currently available.

Charts

Charting on the web platform provides:

• 5 Chart Types. Candle, Hollow Candle, Bar, Line and Mountain.
• 9 Time Frames. These range from 1 Minute to 1 Week.
• 66 Indicators. From Awesome Oscillator to Williams %R.
• 13 Drawing Tools. These include classics such as Fibonacci and Pitchfork.
• Trading from the Chart. Buy and sell buttons are conveniently situated at the top of the chart.

Copy Trading

On the Copy People page users can browse top traders. These popular users can be sorted by location, most traded assets, gains and more. Users can go to their profile pages to learn more about them and their strategies. From there they can copy the trader and specify the amount of funds they want to invest. $200 is the minimum amount required to invest in a trader.

Search

Traders often need to pull up an instrument at short notice. Having a good search feature is a key part of a trading platform. eToro has a great search tool at the top of the screen that makes it very easy to find whatever asset you may be looking for.

To conclude, the web platform has pushed boundaries with its ease of use and innovation. It provides an interesting opportunity for new and casual traders to learn and participate in the markets. It has built in and simplified many great features including alerts, one click trading and trading from the chart.

For advanced and professional traders the platform has room for improvement in areas such as the range of order types. The ability to customize the layout is also somewhat limited. The platform does not cater to algorithmic trading, strategy automation and backtesting. However, it presents an exciting opportunity for experienced traders in that they can earn money by being copied by other clients. This can be done via the Popular Investor Program.

Mobile Trading

The eToro mobile trading app is available for both iOS and Android and can be used in 20 different languages.

The app has the same look and feel as the web platform and most of the same features. Watchlists can be synced between web and mobile. Charts are responsive, but have fewer indicators than the web platform. One click trading, alerts, copy trading and copy portfolios are all available via the mobile app.

The same key features as the web platform are available for mobile. These include:

• Two-Factor Authentication. This adds another layer of security to your account. Once enabled you will need to enter a code sent to your smartphone before login.
• Demo Mode. You can easily switch between demo and real trading within the app.
• Alerts. Receive alerts when an instrument reaches a given price or moves by a set percentage.
• Watchlists. Keep track of your favorite instruments in an easy to reference list.
• Portfolio. Track your investments, their profit and losses and their market value in one list.
• One Click Trading. This feature allows traders to predefine the terms they want, such as trade size. This allows faster order entry for active traders. One click trading can easily be enabled by going to Settings>Trading.

Available order types are also the same on mobile as the web platform. These are:

• Market Order. This is an order to buy or sell an instrument at the current best available price.
• Limit Order. This is an order to buy or sell an instrument at a specified price or better.
• Stop Loss Order. This is an order to buy or sell an instrument that is triggered when price reaches a specified level.
• Trailing Stop Order. This is a stop loss order that can be set at a defined percentage or dollar amount away from an instrument’s current market price. It is used to secure profits when you are in a winning trade, while not having to exit the position.

Charting on the app is a bit stripped down from the web version. For example there are only 5 indicators on mobile versus 66 on the web platform. There are no drawing tools on the mobile app.

• 5 Chart Types. Candle, Hollow Candle, Bar, Line and Mountain.
• 9 Time Frames. These range from 1 Minute to 1 Week.
• 5 Indicators. Bollinger Bands, MACD, Moving Average, RSI and Stochastics.
• Trading from the Chart. Buy and sell buttons are conveniently situated at the bottom of the chart.

Overall we judged that this is a good app. It is very user friendly, with a range of great features such as alerts, one click trading, watchlists and a strong search feature. There is still room for improvement, for example It would be nice to see an economic calendar built into the app.

Order Execution

eToro is a dealing desk/market maker broker, meaning that they set the bid (buy) and offer (sell) prices internally and automatically take the other side of a clients trade. The aggregated exposure of some trades is automatically routed to first tier liquidity providers in real time. In other instances, eToro may take on market exposure when taking the other side of a clients trade.

Tradable Instruments

eToro offers over 2,000 instruments to trade including stocks, cryptocurrencies, ETFs, indices, currencies and commodities. While they offer a good variety of assets, the number of instruments offered is sometimes lower than its largest competitors, with the exception of stocks and crypto. For example, eToro offers 49 currency pairs, compared with over 330 from rival CMC Markets.

eToro shines in the area of stocks. 990 securities are available from the New York Stock Exchange (NYSE) alone, along with hundreds of other stocks from exchanges around the world, from London to Hong Kong. eToro also offers a broad range of cryptocurrencies with over 40 different coins.

• 49 Currency Pairs. A currency pair combines two different currencies, with the value of one currency quoted against the other. For example EUR/USD, which reflects the value of the euro measured in dollars.
• 32 Commodity CFDs. Commodities are raw products, such as gold and oil.
• 2,695 Global Stock CFDs. eToro offers trading in stock CFDs from exchanges ranging from the Borsa Italiana to the NASDAQ. A stock is a security that represents partial ownership of a corporation. Keep in mind that when trading stock CFDs you are speculating on the price of a stock without actually taking ownership of the underlying company.
• 13 Index CFDs. Available index instruments at eToro range from the FRA40 to the China50. An index is a basket of trading instruments that is used to gauge a market sector, stocks within an exchange or the economy of a country.
• 41 Cryptocurrencies. Cryptocurrencies, such as Bitcoin, are digital currencies that are secured by cryptography. *
• 263 ETF CFDs. Exchange traded funds (ETF) are financial instruments that track an index or sector and trade like a stock on an exchange.

Tokens are purchased on the behalf of the client and registered in a segregated account under their name. Once the position is closed, coins are sold on behalf of the client, and the invested amount plus or minus any profits or losses are converted to fiat currency.

The table below shows a sampling of instruments available from different markets.

CopyPortfolios

CopyPortfolios further broaden the offering of tradable instruments at eToro. Market CopyPortfolios are built around an idea, performance metric or algorithm that picks its top performing assets.

For example, users can invest in a CopyPortfolio covering vaccine medication or the gaming industry. Other CopyPortfolios combine top traders on the platform, such as top active traders or top traders by Sharpe Ratio.

Overall, we judged that eToro has a strong range of tradable instruments, well above average for the industry.

Customer Support

Responses via the ticketing system were within 1 business day typically and questions were mostly answered adequately.

Customer service is another example of an area where clients with balances of under $5,000 get a stripped down service, which was rather disappointing.

Deposits and Withdrawals

eToro supports a broad variety of payment methods, from credit/debit cards to digital wallets and bank wires, making it easy to deposit and withdraw from your brokerage account.

Deposits

Accounts can be funded using credit/debit cards, PayPal, Neteller, Skrill, Rapid Transfer, iDEAL, POLi, Klarna and by bank wire. Deposits are typically instant, apart from bank wires which can take between 4 and 7 business days. The eToro platform operates in US dollars only. If you deposit funds in any other currency, they will be converted into US dollars. Conversion fees from 50 pips are applied.

Withdrawals

Withdrawals take a bit longer because eToro needs to examine your account to check whether the requested amount can be withdrawn. This depends on factors such as your actual balance, the margin requirements of your open positions and any documents that may be outstanding.

Withdrawals incur a fee of $5 and the minimum withdrawal amount is $30. Normally, you will receive your funds in a few days. However, it may take up to 10 business days, depending on the payment method used.

We concluded that eToro is average for the industry in this category for the following reasons:

• Good range of deposit/withdrawal options.
• Small withdrawal fee.
• Reasonable processing times.

Account Types and Terms

The account opening process at eToro is simple and relatively fast. Prospective clients simply need to visit the website and click the ‘Join Now’ button.

To open a live account with eToro UK Ltd. individuals must verify their identity with a copy of their passport or personal ID and proof of residency with a copy of a utility bill or drivers licence.

When applying for an account with eToro UK Ltd. entity, individuals must also fill out a detailed Know Your Customer (KYC) questionnaire. This includes questions about trading activity, trading knowledge, planned investments, trading strategy and the purpose of your trading. KYC aims to ensure that brokers understand the clients’ risk tolerance, investment knowledge, and financial position.

eToro only has 1 base currency for accounts which is the US dollar. You can choose your local currency to be shown in your portfolio summary, but trades are executed in US dollars. The minimum deposit to begin trading is $50. All deposits via bank transfer must be at least $500. When registering a corporate account, the minimum first-time deposit requirement is $10,000.

Accounts Types

In addition to a Standard Account, an unlimited Demo Account is available that allows you to hone your skills without risking any money. It is built into the platform so there is no need to log in to it separately. eToro also offers a swap free Islamic Account that adheres to the principles of Sharia law. Corporate and Professional Accounts are also available.

Leverage

One of the reasons that traders are attracted to the forex and CFD markets is the high degree of available leverage. Leverage is the use of borrowed funds to increase the size of your trading positions beyond what would be possible using only the cash in your account.

At the eToro UK Ltd. entity, a Standard Account offers a maximum of 1:30 leverage. This means that with an account of $1,000, you can control up to $30,000 worth of positions in the market. Traders can apply for a Professional Account, which offers higher leverage, but the costs and platform are the same.

With a Standard Account, the following leverage is available:

• Major Forex: 1:30
• Non-major Forex, Gold and Major Equity Indices: 1:20
• Commodities other than gold and non-major equity indices: 1:10
• Shares/ETFs: 1:5
• Crypto: 1:2

Investors with a Professional Account can trade with a maximum leverage of 1:400. This means that with an account of $1,000, you can control up to $400,000 worth of positions in the market. In order to qualify for a Professional Account users must show a sizable financial portfolio and relevant financial experience.

Here is the available leverage for professional accounts:

• Major Forex: 1:400
• Indices: 1:100
• Commodities: 1:100
• Shares/ETFs: 1:10
• Crypto: 1:2

Leverage is often described as a ‘double-edged sword’ because it can amplify both your profits and losses. Leveraged trading comes with a high level of risk and can often result in significant losses.

Club Membership

eToro has a club membership system, in which a range of benefits are available based on the level of equity in your account.

Silver: Balance of at least $5,000. Benefits include live webinars, access to customer success agents, customer service live chat.

Gold: Balance of at least $10,000. Benefits include weekly market analysis.

Platinum: Balance of at least $25,000. Benefits include Trading Central research and analysis platform, no withdrawal fees.

Platinum+: Balance of at least $50,000. Benefits include meeting over zoom with your account manager, tickets to handpicked sporting events.

Diamond: Balance of at least $250,000. Benefits include premium access to leading digital financial publications, invitation to diamond member events.

eToro Supported Countries

eToro accepts clients from the majority of countries globally. However, like most CFD brokers, eToro does not accept clients from FATF (Financial Action Task Force) blacklisted countries North Korea and Iran.

Research

News and analysis stories are regularly updated on the eToro website. Articles are well written and easy enough to understand that they are useful to beginners. Materials include topical stories with trade ideas, for example ‘Rivian’s blockbuster IPO: Here’s how to invest’.

Club members have access to further tools such as live webinars (Silver) and weekly market analysis (Gold). Research from 3rd party provider Trading Central is available to Platinum tier eToro Club members. Platinum membership requires a minimum balance of $25,000.

The news feed within the platform can keep users up to date on any instrument in their watchlist or portfolio, with commentary from other traders around the world.

Education

Courses cover topics such as Crypto 101 and eToro basics with materials in both written and video format. While eToro has gone further with their educational offerings than most brokers, it would be nice to see more interactive features such as progress tracking and quizzes.

In depth guides address material like how to buy Bitcoin with PayPal. For those that prefer audio only, podcasts keep investors up to date with materials such as earnings summaries and investing in Chinese stocks.

The Bottom Line

eToro presents a well rounded offering that is especially suitable for beginner and casual investors.

We had a positive experience with eToro and were impressed by its innovative and feature rich platform. Investors can dip their toes into a wide variety of markets at this broker and learn a great deal along the way. Those that have little time for doing market analysis and actively trading can simply browse top traders and portfolios to copy.

Some spreads are competitive while others may be prohibitive for the most active traders. Keep in mind that some important features such as customer service phone and chat are not available for clients with balances under $5,000. Overall, eToro has set itself apart from other CFD brokers by successfully combining self-directed trading and copy trading within one platform.

FAQ

eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Past performance is not an indication of future results. Trading history presented is less than 5 complete years and may not suffice as basis for investment decision.

Copy trading is a portfolio management service, provided by eToro (Europe) Ltd., which is authorised and regulated by the Cyprus Securities and Exchange Commission.

Investments in crypto-assets are not regulated. They may not be appropriate for retail investors and the full amount invested may be lost. It is important to read and understand the risks of this investment, which are explained in detail at this link

eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro

Cryptoasset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.