eToro is one of the most recognized brokers in the online world. Operating for 12 years and with about 5 million registered traders from all over the world, this portal has risen with its own ideas within the world of investment. It was one of the first brokers to include crypto currencies in his list of investment options and has been one of the most publicized digital assets in the Forex universe.
What is eToro?
Like the vast majority of the world’s brokers, it is based in Cyprus, Limassol under the address 4 Profiti Ilias Street, Kanika Business Center 7 F – 4046. It is duly authorised by CySEC (Cypruss Securities and Exchange Commission) under licence number 109/10. According to eToro’s own developers, the functions of this broker can be seen in up to 140 countries around the world.
eToro in particular is very popular on the web for presenting the so-called «Social Trading», a system in which different traders exchange information about their market movements so that all users can benefit in one way or another. It resembles a social network but with its own dedication to the world of business and investment.
Also, within this Social Trading they have eToro’s own technology called CopyTrader and CopyFunds. CopyTrader is a tool that allows us, as its name implies, to copy the transactions of other traders within the platform. It is a very interesting option since it enables us to enter the world of investments even when we do not know so much about the market.
eToro’s system for classifying the traders we can copy into the platform is quite complete. We can classify them by the number of people who copy their tactics, by the percentage of profits they have been making over a certain period of time, how longevous it is within the platform, etc. Already within the profiles we can evaluate the amount of transactions you make, the assets you are investing in, returns and profile information.
All this information gives us some guidance on which operator we are going to follow. Operators also benefit from having followers of their transactions, eToro pays them for each new subscriber, as well as providing them with a number of benefits for their operations within the portal.
CopyFunds is a system very similar to investing in an investment fund. This system is not about following a trader but about following a portfolio of shares or a specific market within the platform.
For example, there are Copy Funds for technology companies, for the U.S. banking sector, and there is even one for crypto currencies. The downside of Copy Funds is that they are not for all investors, you need at least 5000 dollars to participate in these funds.
Is it safe to operate at eToro?
From a legal point of view, eToro is authorised and licensed by the FCA, the UK financial authority for its UK users, under number 583263. They have an Australian Financial Services Licence number 491139, granted by the Australian ASIC. For other users from other countries, they are served through the Cyprus entity under the license mentioned above.
eToro’s license to operate granted by the Cypriot financial authorities does not allow them to operate in Japan, the United States, Canada, Brazil, Turkey, North Korea, Syria, Cuba and Sudan.
As with other brokers registered in Cyprus, they are required to have an Investor Compensation Fund prepared to cover investors’ funds in the event of any bankruptcy that may occur. This fund meets to protect up to 20 thousand euros per investor registered within the platform. For British users the protection is higher as the FCA requires a maximum amount of £50,000.
Now, at the legal level within the company itself, eToro still maintains itself as a technology company that is not listed on the stock exchange, implying that it does not provide any kind of financial statement of its own finances to the public. This situation generates that it is not known in real time how the truthful numbers are kept inside the broker himself.
Investment Options within eToro
In total, the options that we are going to visualize within eToro are the following:
- 13 Stock exchange indexes. These include New York, Frankfurt, Hong Kong, London, Paris, Milan, Madrid, Zurich and Oslo.
- 47 Fiat currency pairs.
- 1300 shares of different stock exchanges around the world.
- 6 basic or raw materials.
- 14 crypto currencies. It is the portal that offers the most crypto currencies and has an offer of Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic, Dash, Ripple, Litecoin, Stellar, NEO, BNB, EOS and YEC.
To execute trades, eToro uses a proprietary platform that is very user-friendly because it is really easy to use. In terms of languages, the platform is available in Spanish, Italian, English, German, French, Russian, Greek, Chinese, Arabic and Polish.
The process for entering the desired orders is also very simple to use. We can determine the price at which we want to buy a certain asset, the amount of money we want to invest, the leverage we want to apply as well as determine Stop Loss of the operation or Take Profit for when the price of the asset rises. All of these options can also be carried in the eToro mobile app that is available for both Android and iOS.
In terms of leverage, the platform offers a 5X standard on the vast majority of trades. The maximum leverage they offer is 400:1. However, it is important to note that for crypto coins, eToro does not offer any kind of leverage or consumer protection against price drops.
Payment Methods at eToro
eToro offers us a variety of options to deposit our money, however, it is important to mention that it only allows opening accounts and operations in U.S. dollars, so if we deposit in another currency will charge us a commission that we will explain later. With respect to the existing methods are found:
- Credit and debit card.
- International bank transfer.
The minimum amount accepted on the platform is $200 for all countries, with the exception of Israeli accounts that must pay $10,000 as minimum income. The maximum you can invest without having to verify the profile is 2000 dollars, if you want to make transactions with a higher figure, you must go through a KYC process.
Withdrawals have a minimum of $50. We will only be able to withdraw and deposit money in accounts that are in our name, due to anti-money laundering policies. Withdrawals take 1 to 8 business days, depending on the method used.
eToro Trading Commissions
We’ve come to one of eToro’s rather complicated points, commissions. Unfortunately this is the point that generates the most rejection in users due to the fact that high commissions are charged for many things.
Let’s start with the commission to withdraw our money from the platform. It is calculated at $25 for each withdrawal we request within the platform. This amount does not include the rate we must pay in the event that we receive our money in a currency other than the dollar. The conversion fee varies according to the currency we use, as an example we can see that for the Euro is 2.5%, the pound sterling is 0.50% and the Australian dollar 1%.
It also has commissions for when you want to open trades outside market hours and weekends. They also charge a $10 monthly fee when the account is inactive for more than a year.
As far as trading fees are concerned, the system does not charge fees to open or close trades. It applies the traditional system of spreads on prices. However, it should be noted that eToro’s spreads are among the highest in the market. Specifically for the market of crypto coins has some Spreads ranging from 0.75% to 2.9%.
If you would like more information on this point, you can access the official eToro website.
Bonuses and Offers at eToro
As mentioned above, brokers registered and regulated by the European Union are too limited to grant bonds within their platform. But eToro does offer certain benefits to its users and it’s important that we highlight them.
First we’ll have a trial account of $100,000 (not real) that allows us to use eToro for as long as we want. With this account we can assess how the platform and the market work before investing our own money into the system.
eToro also provides us with an education system that is quite practical and useful for learning the basics of the investment world. This system offers us videos and webinars offered by experts and teachers specialized in the markets. The offer of courses is quite varied, we can get from basic courses to teachings for expert traders.
eToro is a very popular broker within the markets as it is very easy to use and has a considerable offer of investment options. Likewise, the Social Trading system is enriching to learn about the market, especially when you are new in the world of investments.
Unfortunately, its commissions could alienate some users, especially for those who want to invest less than 500 dollars in the platform, proving too high to carry out operations as a small investor. Nor are they very advantageous for those who do not handle dollars since conversion fees are equally high.