Etoro Review: What Can You Do With Etoro in 2024

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eToro is a brokerage platform that primarily provides Contracts For Difference or CFDs, and a forex trading interface for its users. While the contracts involve making a profit from price shifts, eToro still offers trading opportunities with real stocks, commodities, ETFs, and a significant number of digital currencies.

Launched in 2007 as a FinTech solutions company, eToro has evolved into an investment broker for multiple assets.

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eToro, regulated by United Kingdom’s FCA (Financial Conduct Authority), Australia’s ASIC (Australian Securities and Investments Commission), and CySEC (Cyprus Securities and Exchange Commission) in Nicosia city, has licensed offices in each of those three locations as well as Israel. eToro started operations in the USA in 2019.

Let’s now assess the broker’s offerings.

What Can You Do With eToro?

The interface hosts a significant number of related operations broadly segmented into three categories.

eToro Trading Activities

eToro’s user base is already past the 6 million mark due to the remarkable number of unique financial assets it provides for its traders. The assets fall into six distinct classes – digital money, fiat money, commodities, shares, indices, and Exchange Traded Funds (ETFs). Due to their unique attributes, each asset type attracts distinct investment techniques.

For example, some assets may use CFD investment techniques, whereas others may require a trader to own the actual item.

Let’s briefly analyze each asset to see the trading products that eToro provides.

Stocks
The platform offers standard to long-term investment opportunities for stocks. Traders buy shares and hold them in their names for a long-term investment without borrowing. However, if the trader is unwilling to hold the shares in their name, they can invest partially in shares, for instance, $200 for a stock that costs $600.

For such stock investors, eToro provides CFD services where investors can indulge in short selling and leverage their position. Some of the most popular stocks offered for investment are Apple, Tesla, and Amazon.

Cryptocurrencies
Due to their high volatility, virtual currencies present many investment opportunities for crypto lovers. The interface, through Crypto Portfolio, has exposed its traders to the larger crypto ecosystem.

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Crypto buyers on the platform invest in the real asset for the long term without leverage. eToro does not safeguard the investor for such trades. However, it’s possible to execute digital currency short-selling with the CySEC and FCA-controlled CFDs. The interface offers popular virtual assets like Bitcoin (BTC) and Ethereum (ETH).

Commodities
Natural resources like gold, oil, and natural gas are available on eToro for investment in the form of CFDs. That means that semi-ownership, borrowing, and short selling will apply to their trades.

Currencies
Fiat currencies offer investors attractive opportunities due to their shifting prices affected by things like central banks’ change of policies, production statistics by a country, and so forth. On the platform, they are only traded as CFDs, and just like stocks; an investor can profit through partial ownership.

[/fusion_text][fusion_text rule_style=”default” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky” animation_direction=”left” animation_speed=”0.3″]ETF
Investment experts sometimes merge several assets to form a financial instrument-ETF, which is traded as a single unit. The new unit is then shared with investors for profit-making, but the experts behind its formation retain its ownership. eToro offers ETF investment for long positions without borrowing and as short-selling CFDs with leverage.[/fusion_text][fusion_text rule_style=”default” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky” animation_direction=”left” animation_speed=”0.3″]Indices
Indices are statistics that reflect the financial health of a given market segment. Indices carry representative data for various assets evaluated together. On eToro, traders invest in assets in the form of CFDs. NSDQ100 and SPX500 are two good examples of indices that are offered.[/fusion_text][fusion_text rule_style=”default” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky” animation_direction=”left” animation_speed=”0.3″]

Copytrading
On the trading aspect, social trading sets eToro apart from similar platforms.

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eToro boasts a vast social network that allows traders to consult one another and share their trading skills. Less experienced traders can copy from professional traders.

eToro Exchange Services

The platform also plays host to an exchange dubbed eTorox with a unique set of assets. The exchange handles buying and selling activities in forex, crypto, and tokenized stablecoins.

Borrowing Activities

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eToro offers capital leverage services to its community of investors by lending them money when opening a position. Funds are offered in multiples of the capital amount the investor is funding like 2x and 10x.

Leveraging helps its users invest more with minimal equity. It’s available for both short-term and long-term investments. Whereas leveraging is aimed at multiplying profits, any losses incurred will accumulate with the same multiplier.

Borrowing is available for all assets though it’s not always available for cryptocurrencies. However, to mitigate the risk of loss inherent in high leveraging, eToro has leverage limitations for each investment.

eToro Fees and Commissions

The broker does not levy its users any fee for using their collaborative CopyTrader program. However, the trader should bear the cost of spreads (price difference) and overnight fees regarding the count of opened copied trades.

Now let’s have a look at the trading and non-trading fees applicable on the eToro platform.

Trading Fees

In cryptocurrency trades, Bitcoin has the lowest spread fee of 0.75% with XTZ (Tezos) being the most expensive at 5%.
The fiat currency trades’ spread fees range from 1 percentage in profit (pip) to 50 pips, those of commodities range from 2 to 20000 pips depending on the currency pair or commodity. Note that a pip is a measure of the smallest price movement.
Spread fees for indices range between 4-1200 pips depending on the index in question.
For ETFs and stocks, the BUY Position spread charge is at 6.4%, whereas the SELL Position at 2.9%.
For a trader wishing to swap fiat with crypto, the platform charges 5% for conversion. The fee drops to 0.1% for exchanging one crypto coin with another.
Traders with leveraged trades incur overnight fees if they remain open past a given time frame.

Non-trading Fees

Deposits incur zero fees, but withdrawals attract a $5 fee except for cryptocurrencies.
Their system charges the user $10 per month upon depositing if the account has been inactive. The inactivity can range from 4 months to a year.

Buying and Transfer Limits

eToro has minimum first-time deposit thresholds ranging from $50-$10000 depending on the trader’s geographical location restrictions. Additionally, there are limits on the virtual coins transferrable to the wallet from the buy/sell platform in a single transaction.

For instance, the maximum BTC transferrable is 2BTC, whereas the minimum is 0. 008BTC. The maximum limit per day is 10BTC. The minimum amount any user can withdraw is $30. However, the account should be verified and hold an available withdrawable balance.

eToro Referral and Sign-Up Promotions

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eToro offers a simple yet impressive referral bonus scheme. The referrer and the account holder who join the platform through their referral link can receive a $50 bonus if the latter trades at least $100.

Moreover, the new trader must complete the registration process within 30 days of receiving the link to be eligible for the promotion.

Earn more from referral programs with Voyager referral and Acorns referral. Check out these referral articles to step up with your trading and investing journey.

Supported Currencies

eToro currently supports 18 crypto coins. Bitcoin (BTC), the most traded crypto asset, is one of the platform’s major digital currencies.

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Although the base currency is the US dollar, the platform still offers more than 40 (crypto versus traditional money) pairs. They involve leading global fiat currencies like the Euro (EUR), Sterling pound (GBP), Japanese Yen (JPY), and the Australian dollar (AUD).

In Which Countries Is eToro Available?

eToro has widespread availability in Africa, Europe, and America. Unfortunately, it’s not accessible in Canada and Japan.

CFDs are not offered in the USA, and the trading service is only available in some states. Sudan and North Korea are some of the nations where the buying and selling services remain unavailable.

Comparison with Other Exchanges

Now let’s make a simple comparison between eToro and leading exchanges.

eToro Versus Binance

Trading BTC on Binance is cheaper than on eToro. While Binance charges 0.1% for every transaction, eToro’s 0.75% spread fee is much higher.

Binance also offers more than 100 distinct crypto coins, whereas eToro provides only 18. However, Binance doesn’t have a copy trading service like eToro. Furthermore, eToro’s active users are less than 1 million, while Binance has over 10 million users. Read more about Binance in our Binance Exchange Review.

eToro Versus Coinbase

Though Coinbase is one of the top exchanges for Bitcoin trades, eToro has the lion share from a “social trading” perspective.

On the number of cryptocurrencies, Coinbase offers the most trading pairs. However, when we compare them in terms of the variety of financial assets they can offer, eToro is the apparent winner.

It’s not easy to compare the two platforms on fees because their schedules are different. However, eToro seems cheaper due to the variable spread. Though Coinbase charges a fixed rate of 1.49%, other extra factors usually drive it to as high as 3.99%. If you want to learn more about Coinbase, check out our Coinbase Review.

Conclusion

eToro is undoubtedly the global leader in terms of collaborative trading. The convenience of copy trading comes in handy for newbie traders who want guidance on the right investment decisions.

However, eToro may be unsuitable for high-volume trades since the immense amounts will significantly impact the spreads’ magnitude.. Additionally, the platform’s maximum trade thresholds will inconvenience such investors.

Traders indulging in eToro’s CFDs service should first understand it since it has been one of the platform’s riskiest investment products.

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