Etoro Review: Rookie Friendly Broker, But Lacks Spread Betting

Summary:
• Are you considering to open an account with eToro in 2020? Read our eToro Review to find out if it is the broker for you. One of its biggest drawdowns...

eToro is one of the well-established brokerage firms that are authorised and licensed by regulatory bodies within several jurisdictions. As such, traders from different countries across the globe can trade with eToro without worrying about the safety of their funds. eToro’s popularity in the global market is further founded on the fact that it offers numerous financial instruments, has competitive spreads, does not charge a commission per trade, and has a proprietary trading platform that beginners will find easy to use. Nonetheless, the firm has certain drawbacks that may be a concern to some traders. To start with, its support channels do not include hotlines. It also lacks free VPS, spread betting, and popular trading platforms like MT4 and MT5. To learn more keep on reading our eToro Review. 

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Education

One of the educational resources that are availed by eToro to both the novice and experienced traders is a blog. The firm regularly posts content on crucial topics such as effective trading strategies, global markets, and on various financial instruments. Video tutorials, guides, and podcasts are also part of eToro’s educational resources. Traders can acquire detailed information by coupling these resources with the company’s daily market reviews and FAQ section.  

Support Channels

On the one hand, eToro does not have customer care hotlines like some of its competitors. However, you can still reach its representatives via email or live chat. Alternatively, one can contact them via their social media accounts.

eToro Overview

Regulation & Licensing	eToro (Europe) Ltd (registration no. HE20058): regulated by the Cyprus Securities & Exchange Commission (CySEC) (License no. 109/10). eToro UK (registration no. 7973792): regulated and authorised by the Financial Conduct Authority under reference no. 583263. eToro Australia (registration no. ABN 66612791803): AFS license no. 491139 issued by ASIC and regulated under the Commonwealth Corporations Act.
Accepted jurisdictions	Worldwide except for Afghanistan, Japan, Jamaica,Iran, Iraq, and other countries listed here
Assets offered	Commodities, currencies, cryptocurrencies, ETFs, indices, and stocks
Platforms available	eToro trading platform
Mobile compatibility	Yes, it is mobile compatible. Through the trading app that is available on the App Store and Google Play, you can access the trading platform on your mobile phone, tablet, laptop, or PC.
Payment types accepted	Wire transfer, credit card (MasterCard, Visa, Maestro, Diners Club), and e-payments (Skrill, Neteller, PayPal)
Languages	About 20 languages including English, Spanish, Italian, French, Portuguese, and Deutsch

eToro Review: Account Types

eToro offers two types of accounts; the retail account and the professional account. The retail account, which is the standard account, does not have numerous requirements compared to the professional one.

Features	Retail Account	Professional Account
Account Currencies	USD, EUR, GBP, AUD, RMB, THB, IDR, MYR, VND, PHP	USD, EUR, GBP, AUD, RMB, THB, IDR, MYR, VND, PHP
Available leverage	1:30	1:400
Minimum deposit	$200	$200
Starting Spreads	From 1 pip (currencies)	From 1 pip (currencies)
Commission per trade	No	No
Decimal pricing	5 decimal places	5 decimal places
Swaps/rollovers	Yes	Yes
Trading instruments	Commodities, currencies, cryptocurrencies, ETFs, indices, and stocks	Commodities, currencies, cryptocurrencies, ETFs, indices, and stocks
Minimum lot size per trade	0.01	0.01
Demo account	Yes	No
Swap/rollover free	No	No
Copy trading support	Yes	Yes

eToro Review: Regulation

eToro (Europe) Ltd (registration no. HE20058) is registered as a Cypriot Investment Firm. It is regulated by the Cyprus Securities & Exchange Commission (CySEC) (License no. 109/10). eToro UK (registration no. 7973792) is regulated and authorised by the Financial Conduct Authority under reference no. 583263. Both eToro UK and eToro Europe comply with MiFID. Likewise, eToro Australia (registration no. ABN 66612791803) has an AFS license (no. 491139) which is issued by ASIC. The latter subsidiary is regulated under the Commonwealth Corporations Act.

eToro Review: Spreads and Costs

The spreads charged by eToro depend on the financial instrument. The screenshot below shows the usual spreads for different instruments. However, these figures may change depending on the prevailing market conditions.  

The company also charges an overnight fee for positions held overnight. These charges depend on the value of the position. If the position is held over the weekend, you will incur triple the overnight fee. As for commissions, eToro does not charge its clients any amount.

Non-trading fees

One of the non-trading fees that eToro charges its clients is the inactivity fee. If no trading activity has been conducted on your account for 12 consecutive months, you will incur a monthly fee of $10. It also has rollover fees (overnight/weekend) fees that vary depending on the market conditions. You can see your rollover fees at the bottom of the trade window as you open a new trade.

While it does not charge its clients a deposit fee, eToro charges a constant fee of $5 for withdrawals. You will also incur a conversion fee if you withdraw in a currency other than USD. For more information about the firm’s conversion fees, head on here.

eToro Review: Customer Service

The primary means of contacting eToro is by heading on to their Customer Service page and opening a ticket containing your name, email address, and query. It may take up to 7 days for you to get a response.

You can also contact eToro on their social media accounts as follows;

Facebook: eToro

Twitter: eToro

Instagram: eToro_official

LinkedIn: eToro

eToro Review: Account Opening Process

eToro offers two types of accounts; retail and professional accounts. The retail account is the basic account and is relatively easy to open. The steps of opening this account are:

• Go to the firm’s website and click on ‘Trade Now’ or ‘Join Now’.
• Fill in the required personal details.
• Ensure that you have read and understood the firm’s Terms & Conditions before agreeing to them.
• Click on ‘Create Account’.

In line with the Know Your Customer (KYC) laws, you will be required to show Proof of Identity (valid passport or photo ID) as well as a Confirmation of Residence (utility bill that is not more than 6 months old).

Fill in a questionnaire meant to help the company customize its services to suit your profile. The required information includes your professional status, financial liquidity, level of knowledge regarding the capital markets, investment goals, and the acceptable risk levels.

The other available account for eToro clients is the professional account. It is somewhat of any upgrade from the retail account. To apply for one, complete the following steps:

• On the website, go to ‘Trading’ and then ‘Professional Account’.
• Scroll down and click on ‘Apply Now’.
• Fill in the needed personal details
• Submit the application. If you meet the firm’s criteria for the professional account, one of its representatives will get in touch with you.

Minimum Deposit

In general, eToro requires its clients to have a minimum deposit of $200 in order to start trading. However, this requirement is subject to certain exceptions. For instance, the residents of the United States and Australia need a first-time deposit of at least $50. The figure required for the residents of the Maldives, Venezuela, Lebanon, and Algeria is $5,000 while that of Israel’s residents is $10,000.

Other than the first-time deposit, eToro clients should have a deposit of at least $50 to trade. As for the professional account, the minimum first-time deposit is $10,000.  

Deposit and Withdrawal Fees

eToro does not charge its clients a deposit fee. However, it charges a standard fee of $5 for withdrawals. You may further be charged by your receiving bank, credit card provider, or intermediary bank. Additionally, withdrawals made in a currency other than USD are subject to a conversion fee.

eToro Education Offering

Just like the other brokerage firms in the market, eToro is keen on enhancing the skills and knowledge of its clients. It does so by availing several educational resources that are beneficial to beginners and experienced traders alike. To begin with, the company has a blog where it constantly posts content on effective trading strategies, global markets, as well as comprehensive information on various financial instruments. Video tutorials, guides, and podcasts are also part of eToro’s educational resources. What’s more, traders of all levels of experience can benefit from the company’s daily market reviews.  

Conclusions

eToro is licensed to operate in different countries across the globe. Its operations are regulated by various authorities in the accepted jurisdictions; an aspect that makes it a credible broker that one can trade with without worrying about the safety of their funds. The additional benefits of trading with this firm include its competitive spreads, lack of commissions, and a beginner-friendly trading platform that enables individuals to trade different financial instruments.

Nonetheless, it has certain drawbacks including the lack of customer care hotlines, spread betting, and free VPS. In addition to lacking these features, it also does not offer common trading platforms like MT4 and MT5. However, the absence of these popular trading platforms does not necessarily mean that its proprietary platform is not efficient.  

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eToro Review FAQs

Q: Does eToro provide leverage on cryptocurrencies?

A: Yes. eToro avails *2 leverage on all cryptocurrency trades.

Q: Why is there a loss as soon as I open a trade?

A: When you open a trade, the current rate that is shown is the one that the position would close. For instance, if you open a BUY trade, it will open and close at the BUY price and SELL price respectively. The difference between these two rates is the reason for an immediate loss at the start of a trade.

Q:  What are the market hours?

A: At eToro, different financial instruments have different market hours. For detailed information on the market hours for specific instruments, click here.