eToro was founded in 2007 and is one of the most reliable brokers in the eyes of traders. How they achieved great success in the market can be explained with the focus on social trading and user-friendly platforms. Let’s look into eToro more deeply.
Is the Broker Safe?
The answer is an easy “yes.” The broker is regulated by two tier-1 regulators(high trust), Australian Securities & Exchange Commission (ASIC) and the Financial Conduct Authority (FCA). In addition to these two, there are one tier-2 authority (average trust) and one tier-3 authority (low trust) regulating the company. It may be beneficial to say that eToro did not get any listing in stock exchanges.
eToro offers a wide range of products with 2361 tradable symbols consisting of 2314 CFDs and 47 Forex pairs. Cryptocurrency trading is also available via CFDs and assets. However, crypto CFDs cannot be traded by UK residents.
Commission and Fees
eToro serves as a market-maker and offers a spread of 1 pip on the EUR/USD pair which is a little bit higher than the average spread in the market. Traders with balances between $5,000 and $25,000 can enjoy VIP accounts which allow them to withdraw at a discounted rate and have access to private signals. The minimum initial deposit is $200 to open an account at eToro.
eToro implements a pricing method close to the market average for physical cryptocurrency around 0.75%. If you want to convert from fiat to crypto, then the fee becomes 5%, slightly higher than the average of the industry. Luckily, crypto-to-crypto conversion fee is very low at 0.1%. By considering the number of cryptocurrency assets available on the broker, it is possible to say that eToro is among the top brokers in 2021.
We already mentioned the CFD shares but eToro makes a difference when it comes to stock trading. US stock trading does not have any commission fee on the platform but it is not available to US traders.
Platforms, Tools and Research
Copy trading and social trading are what make the broker special and one of the most preferred brokers worldwide. The innovation of eToro is to combine copy trading with a self-directed trading system. CopyPortfolios, the tool designed by eToro, allows clients to join a single portfolio and trade by copying the others.
While social trading is the core of the broker, it is fully manual and automated trading is not available at eToro. MT4 and MT5 making automated trading possible are not offered by eToro. The beauty of this system is when you want to copy a trader on the platform, it will be certain that each order is placed manually. Thus, you will know that the performance of the trader is based on their decision-making strategies instead of a machine or computer software.
The research opportunities are not the strongest side of eToro. There are standard tools such as economic calendar, earnings reports calendar, podcasts and so on. The company keeps improving itself in terms of fundamental analysis tools, however, it still falls behind the industry leaders like IG and Saxo Bank.