Established in 2007, eToro is a widely known Israeli FX broker that serves clients from all over the world, offering low pricing, a wide range of cryptocurrencies, and a high-quality propriety platform. This is also the world’s most popular social trading broker and it allows its clients to copy successful investors’ trades with its innovative CopyTrade system.
The company was founded by David Ring and brothers Yoni and Ronen Assia as RetailFX in Tel Aviv, Israel. Initially, it offered Forex and CFD trading but in 2010, it launched the eToro OpenBook social investment platform and the CopyTrade feature. Soon, the re-named broker gained huge popularity among retail traders for the exciting social trading opportunities it offered. In 2018, eToro introduced eToroX, its crypto wallet, and exchange. It also entered the US market, offering clients trade on more than 10 cryptocurrencies and the famous CopyTrader feature.
Today, eToro is among the most preferred social trading platforms in the world with 12 million registered clients and an impeccable reputation for providing safe trading online, fast execution, and no-commission stock and ETF trades in the European Union.
The financial and brokering services of eToro are provided by its several subsidiaries that operate under licenses from different jurisdictions. In Europe, it is represented by eToro Europe Ltd., which is registered as a Cypriot Investment Firm (CIF). It holds a license from the Cyprus Securities and Exchange Commission (CySEC). For its customers based in the United Kingdom, the company operates through eToro UK Ltd., which is licensed by the Financial Conduct Authority (FCA).
Both companies comply with the Markets in Financial Instruments Directive (MiFID), the main piece of legislation in the European Union that provides harmonized control and regulation of investment services across all member states. In addition, eToro is licensed and regulated by the Australian Securities and Investments Commission (ASIC) through its subsidiary eToro AUS Capital Pty Ltd.
In the United States of America, the broker is represented by eToro USA LLC, which is registered with the FinCEN as a Money Services Business for its cryptocurrency trading platform. The broker does not accept registrations and clients from Canada (including the provinces of Ontario and Quebec), Japan, Brazil, Cuba, Turkey, Albania, Serbia, Syria, Iran, and Sudan.
Although a leading provider of social trading services, eToro is first and foremost an online Forex and CFD broker. As such, it offers contracts for difference (CFDs) on a wide range of underlying assets, including foreign currency (FX pairs), indices, shares, commodities, virtual assets, and exchange-traded funds (ETFs).
The catalog of trading instruments available at eToro is relatively small, especially when compared to other brokers who offer around 80 Forex pairs on average. Here, clients can trade a total of 47 pairs, including most major ones – EUR/USD, USD/CAD, GBP/USD, USD/JPY, AUD/USD, USD/RUB, etc. Other popular FX pairs include EUR/GBP, EUR/CHF, GBP/JPY, CAD/JPY, EUR/NZD, CAD/CHF, EUR/SEK, and GBP/HUF.
Using the broker’s trading platform, traders can track the performance of each currency pair over a period of up to 5 years. They can see useful information about the price fluctuations in the form of a chart or more detailed statistics. In addition, the platform features a social feed with posts referring to the specific trading instrument or asset class.
Clients who choose to use eToro’s services can invest in some of the largest and most successful companies in the world. The broker offers more than 1,500 shares and traders can explore stocks by industry or exchange – they can browse all available companies listed on the New York Stock Exchange (NYSE), on the London Stock Exchange, Hong Kong, etc. The Industry filter divides the shares into several major groups, namely consumer goods, technology, financial companies, services, healthcare, utilities, industrial goods, and more.
Using stock CFDs (contracts for difference), traders can invest in big industry giants and various conglomerates such as Apple, eBay, Coca-Cola, Alphabet (Google), Sony, American Express, Boeing, Berkeley Group Holding, Kindred Group, Phillip Morris International, and many more.
CFDs allow trading company shares without having to own the specific stock.
Indices are collections of companies and each index includes the shares of at least 20 or 30 companies listed on a particular stock exchange. Index CFDs are preferred by many traders since they are easier to track than the individual stock of any particular company. However, eToro does not offer a long list of index CFDs.
Traders can choose from fewer than 20 indices – US30, also known as Dow Jones or DJ30, FTSE China A50, which has components from the Shanghai Stock Exchange and the Shenzhen Stock Exchange, or AUS200, which is a capitalization-weighted index of stocks traded on the Australian Securities Exchange. Other indices that can be traded at eToro are GER30 (DAX), Nikkei 225, NASDAQ-100, and FTSE 100.
Commodity CFDs are another alternative for those traders who want to diversify their investment portfolios. Some commodities, in particular, are great for keeping long-term positions lasting several weeks or months. Those who browse the Commodities markets at eToro will find the most popular commodities, namely contracts for difference in oil, gold, silver, natural gas, and more.
In addition to these traditionally traded products, the broker offers trading on copper, platinum, and palladium, which is currently the most valuable tradable metal in the world. It is even more expensive than gold. Besides these hard commodities, eToro offers trade on soft, agricultural commodities such as wheat, sugar, cocoa, and cotton.
The broker covers an impressive range of cryptocurrencies but before opting for this interesting type of market, traders need to know that crypto trade may not be for them. The prices of these electronic currencies can fluctuate widely, which is why they may be risky for investors who are still inexperienced. Moreover, the trade of cryptocurrencies is not supervised and controlled by any legal framework in the European Union.
Unlike most FX and CFD brokers, eToro offers trade on a great number of cryptocurrencies. Along with the popular Bitcoin (BTC), the first and the largest cryptocurrency by market cap, clients here can speculate on the prices of Bitcoin Cash (BCH), Ethereum (ETH), Ethereum Classic (ETC), Ripple (XRP), Litecoin (LTC), Dash, Neo, EOS, and many more.
ETFs or exchange-traded funds usually consist of dozens or hundreds of assets and they track the performance of market or bond indices. ETFs trade like stocks and come with low costs and great tax efficiency, which makes them attractive investments for traders. Those who register with eToro can trade more than 140 ETFs from all over the world.
Unlike the vast majority of FX brokers, eToro does not offer the popular MetaTrader platforms and instead, its clients trade using the eToro proprietary platform. It is user-friendly, intuitive and genuinely innovative, allowing users to copy successful traders or take advantage of ready-made investment strategies.
The broker’s proprietary trading platform can be opened directly in the browser of any computer or mobile device. Traders do not need to download and install any specific software. However, if they are trading from their phones or tablets, they should opt for the eToro mobile app, which is available for free download from the App Store and Google Play. The app supports multiple languages and is fully functional, retaining all features and instruments from the desktop version.
The eToro trading platform offers more than 2,000 financial instruments across several asset classes and for most of them, it utilizes contracts for difference (CFDs). For certain assets such as stocks and crypto assets, however, it also gives its clients direct access to the market by offering direct ownership of the underlying asset – eToro simply buys the assets and holds them in the client’s name.
The interface of the platform seems modern and easy-to-use and it comes with various useful features for both novices and experienced traders. One of them is the Virtual Portfolio, which is practically a demo account with a $100,000 virtual balance for practice. The platform also features Stop Loss and Take Profit, Price Alerts, One-Click Trading, and Offline Trading, as well as great research and analysis tools such as the TipRanks Research Tab and the professional-grade ProCharts.
The main feature of the eToro platform is, of course, the social trading and the opportunity to copy portfolios. In fact, eToro is considered the best platform for social trading – the broker has created a wonderful community of traders and every client has access to it. The News Feed works just like a social media platform, while less experienced traders can try the Copy People feature – they can choose from the top investors on the platform, the most copied ones, those who are trending, or those with a low or medium risk score.
Last, but not least, eToro features CopyPortfolios, a portfolio investment product that allows clients to customize their trading strategy and build it around a performance metric or some specific idea. The product offers thematic investments such as Food and Drinks, Cyber Tech Stocks, Drone Technology, etc.
The broker supports several base currencies that can be registered by clients and these are USD, EUR, GBP, and AUD. The minimum deposit for starting a trade is $200 but there is an exception for traders based in Australia or the United States and they can open a live account with a deposit of $50 or more. Moreover, Israeli residents cannot open a trade if they deposit less than $10,000, while the minimum initial deposit for traders based in Russia, China, Hong Kong, Taiwan, and Macau is $500.
Deposits are instant and free of charge, while eToro accepts several payment methods on its platform. These include all major credit and debit cards, including Visa, Mastercard, Maestro, and Diners Club International, as well as popular digital wallets such as PayPal, Skrill, and Neteller. Other e-wallets such as the Russian WebMoney can be used, while Chinese traders can make deposits safely and conveniently via UnionPay.
Another option is to make a deposit using Rapid Transfer, a type of relatively fast online banking transaction, or simply via Wire Transfer. However, bank wires make take 4 to 7 business days to complete, which is why most eToro clients prefer e-wallets or credit cards. Another thing that should be taken into account is the maximum deposit amount – there is none when using Wire Transfer and it is $40,000 when depositing via credit/debit cards. When the trader deposits through an e-wallet, the maximum transferable amount will be $10,000 or $20,000.
The same payment methods could be used for withdrawals, as well. The minimum withdrawal amount is $50 and each time, traders withdraw money from their account, they will need to pay a fixed fee of $25. The processing times, however, vary significantly, depending on the preferred payment method – it is 1-2 working days for e-wallets and online banking or 3-8 days for withdrawals via Wire Transfer or credit/debit card.
Focused solely on social trading, eToro does not have a wide range of accounts for its clients. Instead, it offers two basic types of accounts, namely a Demo Account and a Live Account. Most traders should probably start with the Demo Account, which comes with a Virtual Portfolio and a virtual $100,000 balance, which can be used for testing the trading platform and trying out the exciting social trading features.
Investors can sign up using their Google or Facebook account or register with their email. Once eToro clients learn the basics, they should continue with the Live Account and the Real Portfolio, which requires a real-money deposit and a fully functional user account. Overall, traders can open and verify their account within 1 working day so they can start trading almost immediately. The verification process includes providing the broker with the client’s proof of identity (a copy of a passport or personal ID) and residency (a copy of recent utility bills or a bank statement).
Also, under EU regulation, traders can open Professional Accounts at eToro. Professional clients must meet certain requirements but they also enjoy higher leverage for certain instruments – it is 1:400. Of course, higher leverage is always associated with a higher risk.
Since its launch more than a decade ago, eToro has expanded globally and now has more than 1 million active users from all over the world. This is why its platform is available in multiple languages, namely English, German, Norwegian, Danish, Swedish, Dutch, Finnish, French, Italian, Spanish, Portuguese, Polish, Czech, Romanian, Russian, Chinese, Arabic, Thai, Malay, and Vietnamese.
The broker does not offer a phone line, except for Australian customers. All other clients of eToro can contact the customer support service by opening a ticket and referring their issue to the support agents. Such a support system was popular in the 1990s and early 2000s but nowadays, most online brokers and other businesses as a whole prefer to offer their users a more convenient way to contact them, namely a phone, live chat or email. Traders here can use the live chat – email is also not available.
Overall, eToro is a wonderful solution for less-experienced traders who are looking for a way to educate themselves into the world of Forex, CFD or crypto trading. It is also the best platform for those who have little time for making research themselves and who want to exploit the features and options of social trading. However, traders should know that copying someone else’s investment portfolio does not guarantee success – not at all. This is why they should be very careful when using the social trading aspect of the eToro platform.