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eToro Review 2022 – Leading Social Trading Platform

Franklin Carneiro da Silva| Updated September 8th, 2022
eToro Review 2022 - Leading Social Trading Platform 1
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78% of retail CFD account lose money.

Hi, we will review eToro to help you find out whether eToro is the right investment platform for you!

We recommend eToro if you want to buy stocks, ETFs, cryptocurrencies, and/or follow other people’s trades, which is called social trading, but you can also invest in other products such as CFDs (leveraged positions) on indices, stocks, commodities, currencies and crypto assets through the platform.

The content in this review does not apply to US users, as the eToro offering is different there.

eToro is a well-known fintech startup and the leader in the social trading field, with over 25 million users worldwide. Recently, they saw a boost in their number of customers after offering commission-free stock and ETFs trading in some regions (not all ETFs are commission-free).

Their trading platform is intuitive and simple to use, making it a good choice for investors of all shapes and sizes.

Opening an account and depositing is easy, and you can even open a demo account to try it out with virtual money. On the downside, withdrawing money is slow and expensive, and spreads can be high for some products.

That’s our eToro review in a nutshell. If you want a more detailed eToro review, keep on reading. Here’s what we’ll cover:

1. eToro’s Overview

eToro is a fintech startup, a social trading broker founded in 2006 in Israel, with the mission to make trading accessible and fun to anyone, anywhere, and reduce dependency on traditional financial institutions. Its hassle-free trading platform allows users to trade various financial assets online, such as traditional stocks, ETFs, and thousands of CFD products on stocks, indices, currencies, and commodities. eToro also allows you to buy and sell cryptocurrencies. Here is how the investor’s dashboard looks like:

eToro Review - Watchlist Overview - Investing in the Web

eToro Review – Watchlist Overview

eToro Highlights

🗺️ Supported Countries Worldwide – Exceptions include the US
💰 Stocks and ETFs fees Free of charge (some ETFs are not free)
💰 Cryptos and CFDs fees Low
💰 Inactivity fee $10 after 1 year of inactivity
💰 Withdrawal fee $5
💵 Minimum Deposit $200 (it varies between countries)
📍 Products offered Stocks, ETFs, Cryptos and CFDs
🎮 Demo Account Yes
📜 Regulatory entities FCA, CySEC, ASIC

 

eToro is known for its product innovations, introducing, throughout the years, several features such as CopyTrader™, which allows any user to follow and automatically replicate other investors’ trades, and CopyPortfolios™, a brand new long-term thematic investment products designed to manage portfolios of various asset classes or a group of traders, under a predetermined market strategy and constantly monitored by machine-learning algorithms.

In other words, the CopyTrader™ allows you to copy individual trades, whereas the CopyPortfolios™ enables you to invest in a single portfolio that aggregates several securities. For example, you may invest in a CopyPortfolios™, which allocates your capital to technological companies.

On both approaches, you stand a chance to make gains passively. It is not surprising why eToro has been attracting global attention and becoming one of their main and most well-known features since it explores new ways to generate profits. Here are some examples:

eToro Review - CopyTrader™ Overview

eToro Review – CopyTrader™ Overview

Past performance is not an indication of future results.

eToro Review - CopyPortfolios™ Overview

eToro Review – CopyPortfolios™ Overview

Past performance is not an indication of future results.

Besides, eToro allows you to buy cryptocurrencies with a fraction of the costs involved in more well-known platforms in that area like Coinbase, which charges you a whopping 3.99% on debit/credit card deposits, and then a 1.5% commission when you buy and, again, when you sell.

On the other hand, eToro only charges you spreads that can vary from 1% (Bitcoin) to 4.5% (IOTA). If you just stick to Bitcoin and/or Ethereum, you will better off using eToro’s platform.

eToro Review - Cryptocurrencies' Spreads

eToro Review – Cryptocurrencies’ Spreads

When investing in Cryptos through eToro, you will gain ownership of the asset (like a real stock) if you meet all these three requirements: you are not leveraged (meaning CFDs) on your cryptocurrency trade, you are not short-selling it, and you are not a client under the Australian Securities and Investments Commission (ASIC).

Overall, eToro offers the best platform for investors who want to have an account in a brokerage that offers the social trading service, want to benefit from commission-free stock and ETFs trading (not all ETFs are commission-free), and even gain exposure to cryptocurrencies. Plus, you can even invest through an eToro business account, if you have a company!

2. eToro’s Pros and Cons

Pros

  • Commission-free stock and ETFs trading (not all ETFs are commission-free)
  • Social Trading and other innovative products
  • Wide variety of financial products
  • Slick, modern, and easy for anyone to use
  • Top tier regulators

Cons

  • Limited disclosed financial information
  • Withdraw and inactivity fees
  • Spread, overnight, inactivity, and currency conversion fees higher than average
  • Offers primarily CFDs, which are high-risk instruments and with no asset ownership
  • Only one currency account (USD)

4. eToro’s fees snapshot

Fee Type Classification
Stocks and ETFs fees Commission-free stock and ETFs trading (not all ETFs are commission-free)
Forex, Commodity & Index Spreads Medium-High
Inactivity fee $10 after 1 year of inactivity
Currency conversion fee Averages 0.5%
Withdraw fee $5
Overnight and Weekend Costs Medium-High

The company does offer an eToro Club program that provides discounts based on account size. You can check the full description of the fees charged by eToro here.

5. Safety and Regulation

eToro is fully regulated and supervised by top tier regulators such as the Financial Conduct Authority (FCA) in the UK and the Australian Securities and Investments Commission (ASIC) in Australia. The subsidiary in Europe is authorized and regulated by the Cyprus Securities Exchange Commission (CySEC).

Moreover, keep in mind that it is registered in several countries, which means that it must have authorization from the local financial markets authorities. For instance, in the Netherlands and Germany, eToro is registered in the Netherlands Authority for the Financial Markets (AFM – Autoriteit Financiële Markten), and the Federal Financial Supervisory Authority (BaFin), respectively.

Even so, eToro is not listed on any stock exchange. As a result, it does not need to disclose its annual report on its site.

Finally, following the August 2018 restrictions in CFD trading by the European Securities and Markets Authority (ESMA), eToro provides negative balance protection for Forex and CFD trading on a per-account basis to retail clients from the European Union. What does that mean?

Imagine that you deposit 1000€ in your account and open a position with a 5:1 leverage. This increases your exposure to 5000€. If the market dropped 25%, you would lose 1250€ (25%*5000€). As you can see, it is above your initial deposit of 1000€, meaning that you would owe 250€ to your broker. With ESMA regulation, your account balance is automatically readjusted to 0€, so you only lose your deposit. (more info here).

Do you want to read a deeper analysis? Check out our dedicated article on eToro Safety and our article on investment protection (for EU investors)!

6. eToro’s supported countries

Due to regulation, eToro cannot legally offer its services in the following countries: Afghanistan, Albania, Belarus, Bosnia and Herzegovina, Botswana, Brunei, Burundi, Canada, Chad, Congo Republic, Crimea Region, Cuba, Ethiopia, El Salvador, Egypt, Guatemala, Guyana, Kenya, Guinea, Guinea-Bissau, Iran, Indonesia, India, Japan, Laos, Libya, Mali, Myanmar, Namibia, New Zealand, Nicaragua, Nigeria, North Korea, Papua New Guinea, Panama, Palau, Pakistan, Samoa, Serbia, Somalia, Sudan, Syria, Turkey, Taiwan, Uganda, Venezuela, Yemen.

For regulatory reasons, eToro cannot provide its service to US citizens who reside outside the USA.

eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Past performance is not an indication of future results. Trading history presented is less than 5 complete years and may not suffice as basis for investment decision.

Copy trading is a portfolio management service, provided by eToro (Europe) Ltd., which is authorised and regulated by the Cyprus Securities and Exchange Commission.

Cryptoasset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.

Franklin Carneiro da Silva
Co-Founder & Fintech Analyst

Franklin is a CFA Level III Candidate with 3 years of experience in Wealth Management as a Fund Research Analyst and the Host of the "Edge Over Hedge" YouTube Channel.

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