eToro Review
eToro, initially established in 2006 as RetailFX, is an online Stocks, Currencies, Indices and Commodities social trading platform founded by two siblings Ronen and Yoni Assia and their partner David Ring. The two brothers and their partner established eToro with the goal of providing an online financial trading platform that is user friendly and suited to traders of all levels of trading experience. The business concept proved to be hugely successful and currently serves millions of users from all over the world. Attracting thousands of new users every day, eToro has today become the world’s premier social trading platform.
With eToro’s innovative and intuitive “OpenBook” trading platform, traders can now trade in various different types of financial instruments such as commodities, equities, currency pairs and market indices. The “CopyTrading” feature which comes with eToro’s trading platform also allows beginner traders to copy the trades of more experienced traders, offering the more experienced traders to leverage their trading skills into an additional revenue stream. To keep pace with changing trends in the industry, eToro developed and launched its innovative mobile trading app to allow eToro’s traders to trade the markets straight from their smartphones.
eToro Video Review
eToro Regulations
In terms of regulatory oversight, eToro is regulated in 2 separate jurisdictions, UK and Cyprus.
- In the UK, eToro operating through eToro (UK) Ltd and registered by the UK’s Financial Conduct Authority (FCA) under the FCA reference number 583263. Since both CySEC and the FCA operate under the Markets in Financial Instruments Directive (MiFID), this means eToro is a MiFID compliant broker and is authorized to operate within the Eurozone.
- In Cyprus, eToro comes under the jurisdiction of the Cyprus Securities Exchange Commission (CySEC). Licensed under the Cyprus Investment Firm (CIF) license number 109/10, eToro complies with strict regulatory requirements such as operating with adequate capitalization and maintaining segregated accounts for their clients’ funds.
eToro Reliability
Over the past ten years since eToro first began its operation, the broker has earned a reputation among the online trading community as one of the most reputable online brokers existing in the industry. Their services and “OpenBook” trading platform has been featured in numerous international financial periodicals such as Forbes, Financial Times, Finance Magnates, Fintech Finance and even on America’s cable news network CNBC.
As mentioned earlier, eToro is regulated by both the UK’s FCA and Cyprus’ CySEC. Both these regulatory agencies impose strict regulatory guidelines which eToro is required to abide by. In addition to the regulatory oversight, investors of eToro are further protected with the coverage provided by UK’s Financial Services Compensation Scheme and CySEC’s Investor Compensation Scheme. All of eToro clients’ funds are keep in segregated accounts maintained at Tier 1 banks.
For web security, eToro uses SSL encryption technology to ensure that all sensitive data are protected from any unauthorized intrusions. Finally as a transparent and ethical broker, eToro doesn’t share any of clients’ personal data with anyone without their clients’ permission.
eToro Trading Platform
What makes eToro truly unique from other online trading brokers in the industry is their proprietary “OpenBook” trading platform.
When the trading platform was first launched in 2010, it was the first social trading platform of its kind. This earned eToro the distinction of being the first broker to introduce the concept of social trading into the online trading industry. In other words, eToro has earned its badge as being the pioneer broker for social trading in the online trading industry.
Unlike the traditional online trading platform, eToro’s trading platform harnesses the wisdom of the crowd to help traders maximize their investment returns. The social trading platform lets traders see each others trading statistics such as their market positions, profit levels and the trading strategies adopted in real time. It is through this OpenBook trading method that eToro is able to tear down all the barriers between traders and hence help to accelerate the learning process among traders on the social trading network.
Mobile Trading
Apart from the web based trading platform provided by eToro, traders also can download to their smartphones an Android and iPhone app of eToro’s trading platform. The mobile app lets a trader view in real time the feeds of other trader in the eToro social trading network just like the web based OpenBook platform. In addition with the mobile trading app, traders can also view the prices of all the various instruments before placing their trades. They can also monitor their trading account as well as interact with other traders in the social trading network.
eToro Trade Types/Instruments
In terms of the types of instruments that are available for trading at eToro, they include a wide selection of international stocks, indices, precious metals, commodities, currencies pairs (forex) and Exchange Traded Funds (ETFs). In early 2014, eToro also introduced trading for the crypto currency Bitcoin but unlike other brokers in the industry where Bitcoin is traded as a currency, Bitcoin on eToro is available to be traded as a CFD derivative. In other words, traders on eToro’s social trading network will be buying and selling the crypto currency as a financial security which tracks the prices of Bitcoin on the open market.
eToro Account Types
At eToro, things are kept simple, so traders, especially beginner traders, will not be overwhelmed by the amount of decisions that they have to make regarding their trading account choices. As such, you can find 2 types of trading accounts at eToro, a standard trading account and a practice account. To open a standard account, a minimum initial deposit of just $50 is required.
eToro Demo Account
As for the practice account at eToro, traders who sign up for access to the account will be given an initial deposit of $100,000 in virtual currency. This platform will allow the trader to conduct trial runs of their trading strategies without any financial risk to them. It also gives potential traders of eToro an opportunity to test out eToro’s services and trading platform before they commit any real money.
eToro Islamic/Swap-Free Account
A Swap free trading account or Islamic trading account is also available upon request to traders who wish to trade the financial markets without violating the Islamic Sharia principles.
eToro Commissions & Spreads
eToro does not charge any annual fees or commissions for traders joining its social trading network. Instead eToro charges a spread on top of the price quotes that they receive from the markets. eToro ensures that its traders will not suffer from slippages when they make their trades.
To give our readers an idea of the spreads charged by eToro, below is a list of the typical spreads which traders have to bear for some of the more frequently traded instruments (Spreads may vary according to the broker’s terms).
Instrument
|
Typical Spreads (in pips)
|
| EUR/USD |
3 pips |
| EUR/GBP |
4 pips |
| EUR/CHF |
5 pips |
| EUR/JPY |
4 pips |
| EUR/AUD |
7 pips |
| EUR/CAD |
7 pips |
| USD/CAD |
3 pips |
| USD/JPY |
2 pips |
| USD/CHF |
3 pips |
| AUD/USD |
4 pips |
eToro Deposits & Withdrawals Options
To fund their trading accounts, eToro’s traders have nearly a dozen different methods of doing it. These methods include the following:
- Credit / Debit card
- Giropay
- Neteller
- PayPal
- Skrill Limited
- WebMoney
- Wire Transfer
- Wirecard
- Yandex
- China Union Pay
The most efficient method of depositing funds is by credit card and eWallets such as NETELLER and Skrill. Usually, the funds deposited are posted immediately to the trader’s trading account.
The withdrawal of funds from an eToro trading account can be done through credit cards, PayPal and bank wire transfer. The precise method used for the withdrawal of funds will depend on the method that was used to deposit the funds. For example, if a trader funds his trading account with his credit card, then the method of withdrawal will be through the credit card as well. The typical processing time required for a withdrawal request is one business day. However it will take additional time before the funds are actually posted to the trader’s bank account.
eToro Bonus & Promotions
eToro have a program called the “Popular Investor” program that enables a trader to earn additional income while they are trading the markets for their own personal benefit. With the “Popular Investor” program, a trader who lets others copy his trades will earn additional payments by up to 2% of the annual assets that are under their management portfolio. These payments are in addition to any other profits which the trader might receive from their own trading activities. In addition, popular and successful investor traders will also get to enjoy a 100% spread rebates for all their trades.
eToro Customer Support
The customer service at eToro is available 24 hours a day during the 5 day trading week. Traders who require assistance from the support team can contact customer support through email, fax or by calling the telephone support number provided. For the benefit of non-English speaking traders, eToro’s website is supported into several other many languages.
eToro Pros & Cons
Pros
- User Friendly Trading Platform
- Proprietary Platform: Copy Trade & Social Trading Options
- Demo Account provided
- Low minimum deposit requirement
- Wide choices of Financial Instruments
- No Slippage
Cons
- No choices of trading platforms
- Costumer support available 24/5, not including weekends
eToro Q&A
Yes. eToro is regulated in 2 different jurisdictions. In the UK, the broker is regulated by the Financial Conduct Authority. Moreover, eToro is regulated by the Cyprus Securities Exchange Commission (CySEC). Being regulated by both these regulatory agencies means eToro is MiFID compliant.
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How safe is eToro – Is eToro a scam?
In terms of privacy, all personal and private data are kept under tight security to prevent any unauthorized access. The broker also uses SSL security technology to ensure that hackers cannot access any sensitive information on eToro’s servers.
eToro’s headquarter is located in Limassol, Cyprus. However, the broker also maintains an operation base in the city of London to service their UK based traders.
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How does eToro make money?
eToro does not charge their traders any commission. Instead the broker earns by charging traders a spread on the prices quoted to traders.
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How to deposit in eToro account?
To make a deposit into an eToro account, traders can do so using their credit/debit cards, eWallets or by bank wire transfer. The fastest method of depositing funds is by credit cards and eWallets as the funds deposited are immediately posted to the trading account.
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How to withdraw money from eToro?
To withdraw funds from an eToro trading account, traders can do so through their credit cards or through bank wire transfer. Normally the funds are withdrawn using the same method that was initially used for depositing funds into the trading account.
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How to open an account with eToro?
To open an account at eToro, you are required to fill out the account registration form and submit it to eToro. Live trading is only possible once you have deposited a minimum of $50 into the trading account.
Yes. eToro has already established a reputation for reliability among traders in the trading community. The broker has also been mentioned in a variety of financial periodicals such as Forbes as one of the key players in the online social trading scene.
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Does eToro use MetaTrader?
No, eToro does not use the MetaTrader trading platform. Instead eToro has provided its traders with their proprietary trading platform called “OpenBook”. The key attraction of the OpenBook trading platform is the copy trading feature as this feature allows beginner traders to copy the trades of the more experienced traders.
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What is eToro’s leverage?
At eToro, the maximum leverage provided to traders is 1:400. Please note that eToro’s holds a policy of reducing the trading risks of traders to ensure that they are not overexposed in the markets.
Conclusion
eToro, in terms of social trading, has no competitors in the industry. Their intuitive trading platform aside from letting traders copy from their more experienced peers also allowed interaction between traders in the social trading network. Whether you are an experienced trader that wish to take advantage of your skills or new to online trading and lack any trading experience, eToro is the ideal broker to start trading with.
