What Is eToro?
eToro is a social trading platform that allows users to trade stocks, cryptocurrencies, and forex as well as keep up with the investing strategies and patterns of other users.
The company is based in Tel-Aviv, Israel, and its CEO is Yoni Assia.
The platform has over 25 million registered users.
How Does eToro Work?
eToro has several different sides to its business.
This includes the ability to trade different asset classes, copy top traders’ portfolios, and trade virtual currency for practice.
Let’s talk about the different features available on eToro.
eToro Features
Stocks
eToro currently lets you trade over 1700 stocks.
You’ll be able to find your favorite companies and easily invest in them or learn how others are investing in them.
ETFs
eToro is currently beta testing ETFs for U.S.-based customers.
ETFs are currently only available in 44 states.
Cryptocurrency
Crypto is where eToro got its start.
eToro was one of the early adopters of crypto trading and it functions as a full crypto exchange.
You can trade over 40 cryptos on eToro, such as Bitcoin, Ethereum, and Dogecoin.
CFDs
eToro also lets you trade CFDs on cryptocurrencies.
A CFD is a contract for difference.
This contract is an agreement between two parties that states that one person will pay the other person the difference between what the current price of the underlying security is and what the price is at the time the contract expires.
Think of it as a derivative contract where the underlying security never actually changes hands.
You’re essentially betting on what the price of the security will be without having to buy or sell the security,
One person is betting that the underlying crypto will go up in price while the other is betting that it will go down.
And the loser will have to pay up!
Watchlist
You can create a watchlist by adding stocks and cryptos that you’re interested in.
Any securities that you add will populate your Watchlist page, where you can see them all in one place.
The watchlist shows you the price, gain or loss percentage, and chart for each security.
You can also see the 52-week price range for each security as well as analyst sentiment.
The sentiment will tell you whether most analysts are rating a security as buy, hold, or sell.
You can easily trade your favorite securities from the Watchlist view.
Social Investing
One of the features that makes eToro so unique is its social aspect.
The platform is essentially bridging investing and social media!
The “copy trading” feature lets you automatically replicate another investor’s strategy or portfolio at the click of a button.
You can look at how top investors are trading, and what securities they’re fans of right now.
These top investors get paid when you copy their strategies through eToro’s Popular Investor Program.
Virtual Portfolio
eToro also has a Virtual Portfolio feature.
The Virtual Portfolio allows you to paper trade, or trade virtual money as practice for real investing!
The Virtual Portfolio allows you to trade any security you can trade in your real portfolio.
eToro Fees
So, now that we know what eToro is and how it works, how much does eToro cost?
eToro is a commission-free investing platform for all users.
If you’re based in the U.S., you won’t have to pay too many fees to trade on eToro.
You will have to withdraw a minimum of $30 any time you want to withdraw money from your account.
If you decide to transfer crypto in or out of your eToro account, you’ll pay a fee that depends on what crypto you’re moving.
If you’re an investor located outside of the United States, you’ll be facing a few more fees from eToro.
International users will pay a withdrawal fee of $5 anytime they withdraw money from eToro.
If you’re transferring money to or from your account in a currency other than USD, you’ll pay a fee starting at 0.50% of the amount of the transfer.
There’s also an inactivity fee of $10 per month for any eToro account that has been inactive for at least a year.
Is eToro Safe?
As you’re doing your due diligence while evaluating eToro, you’re probably asking: is eToro reliable?
Well, we think that eToro’s years of business in the investing world and millions of users speak for themselves.
But on top of that, eToro is a member of both the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
This means that eToro is heavily regulated by the government, just like many other big investing platforms.
eToro is also a member of the Securities Investor Protection Corporation (SIPC).
This means that your stocks and deposited cash are protected in the event that eToro goes out of business and you’re unable to liquidate the assets in your account.
Keep in mind that cryptocurrencies are not insured.
