Does eToro offer spread betting? Alternatives for 2024

No, eToro does not offer spread betting services. Among the many instruments available on the platform, spread betting is not one of the options. The company does not mention plans to include the financial instrument into their platform.

One alternate instrument and the only derivative you will find in eToro is the contract for difference (CFD). These are also derivative contracts where investors try to profit from the price variation of an asset without owning it. The investor receives the difference between the price when the contract is opened and when the position is closed. 

There are a few differences between the CFD and a spread betting contract: the latter has a fixed expiration date, set when the bet is placed. Generally, there are commissions and fees for trading CFDs. Most importantly, the P&L of the CFD is calculated by taking the price at the closing of the contract and subtracting it to the initial price plus commissions. In opposition, the P&L of the spread bet is the change in the price times the amount of cash placed in the bet. While the profit of spread betting depends on the size of the bet, the profit of CFDs depends on the price variation of the asset.

Etoro Alternatives for spread betting

If you want to look for spread betting services, we have provided you a few alternatives to start, and now we will help you listing a few of the factors that you should consider when choosing the right broker for you:

• Costs: Generally, the spread betting accounts are free and the broker profits from the spread. So one thing to consider is the difference between the bid and the offer. To make a profit, you should look for a low spread. Low liquidity in the market can increase this difference, but the broker can increase it to profit more from the transactions.
• Regulation: It is important to assess if the broker you use is regulated by a top-tier regulator such as the FCA (Financial Conduct Authority).
• Deposit protection: You can also assess if the broker can secure your funds if it goes bankrupt, providing you more protection.
• Trading offers: Since the underlying asset will determine the P&L of your investment, it is important to trade with a broker with a diverse set of financial instruments to offer.
• Customer support: Eventually, you will have problems using your trading platform. For that purpose, it is important to find a broker with good customer service that can quickly solve your issues. 

Besides offering many types of instruments for your investments, eToro does not offer spread betting services. They also do not mention any plan to include it in their platform. Currently, the only derivative available in eToro is the CFD. But if you are looking for spread betting service providers, there is no need to worry, there are many alternatives, especially in the UK, where the instrument is more common.

Spread betting may be very profitable due to its leverage effect. But for the same reasons that it can be profitable, the losses incurred by the instrument are limitless, making it very risky, it should be used very carefully.

If you are interested in spread betting, we hope this article helps you with your doubts and provides you with some information about it. Note that this article is for informational purposes and should not be seen as financial advice. Remember that you should always do your research, and due diligence, especially when dealing with such a risky instrument. We wish you good luck with your investments, and please leave your questions below!

What is eToro, and what is spread betting?

eToro is a social trading platform with diverse financial instruments for your investments. One of its main features is the possibility to copy other traders, which allows inexperienced traders to mimic the investments of experienced ones. Although eToro lets you invest in stocks, ETFs, cryptocurrencies, commodities, and CFDs (Contract for Difference), it does not provide spread betting services.

If you are not familiar with this financial instrument, we can help you. Spread betting is a derivative: a contract whose value comes from an underlying asset, like currencies or stocks. Derivatives are frequently used to hedge positions or gain leverage and speculate about the price of the underlying asset.

In a nutshell, spread betting is a contract that allows investors to bet on the price movement, both up and down, of an underlying asset. At the end of the contract, the profit or loss is calculated by taking the change in the price of the asset (initial price – final price) and multiplying it by the amount of cash that the investor placed in the bet. 

When spread betting, you do not acquire the ownership of the underlying asset, and leverage your position. This makes this type of investment risky, since you will gain full market exposure to the underlying asset, while investing only a fraction of the price, magnifying your profit and loss. 

To illustrate this explanation, imagine the following: let’s say that you think that a stock that currently costs $100 is overvalued. You believe that its price will fall. Then you decide to bet $10 that the price will fall below $100. If, at the closing of the contract, it reaches $95, you will close the contract with the profit of $50 {($100 – $95) * $10}. On the other hand, if the price goes up to $105, you will close the contract with a loss of $50 {($100 – $105) * $10}.