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eToro review and ratings

Established 2006
Location UK Cyprus
Regulation FCA, CySEC
Offices London, Limassol, Tel Aviv, Moscow, Shanghai
Broker type MM
Leverage up to 1:30
Deposit from 200 USD
Spreads high  high
Platforms Web Social Platform
Instruments Currencies Crypto Indices Metals Stocks ETFs
Funding methods Wire Transfer Credit Cards PayPal Skrill Neteller UnionPay WebMoney Yandex Money Giropay Wirecard

Company information

eToro group includes 2 related companies.

eToro UK - located in the United Kindom, regulated by the Financial Conduct Authority (FCA).
eToro CY - located in Cyprus, regulated by the Cyprus Securities and Exchange Commission (CySEC).

Be aware, both companies have some trading restrictions because of the European Securities and Markets Authority (ESMA) influence.

Availability

eToro group accepts clients from all over the world, excluding USA, Canada, Japan, Brazil, Turkey, North Korea, Iran, Cuba, Albania, Serbia, Sudan and Syria.

Distinctive features

Trading instruments

Forex broker offers the following underlying assets for trading.

45+ Currency Pairs Based on major and minor world currencies.
13 Crypto CFDs Based on Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic, Ripple, Dash, Litecoin, Cardano, Stellar, EOS, NEO.
13 Indice CFDs Based on baskets of different blue-chip stocks and US Dollar Index.
4 Metal CFDs Based on Gold, Silver, Platinum and Copper.
2 Energy CFDs Based on Crude Oil (WTI) and Natural Gas.
1000+ Stock CFDs Based on shares of US, UK and EU companies.
80+ ETF CFDs Based on exchange-traded funds containing various tradable assets.

Comprehensive review

Established in 2006, eToro is a relatively new forex and CFD broker that pioneered the concept of “social trading” when they entered the retail forex trading market. Social trading, aka “copy-trading,” centers around the idea of allowing inexperienced traders to follow the trades that more experienced and profitable traders are making, thus creating an easier path to potentially profitable trading for newbies.

eToro claims to have millions of users from around the world, many of whom have made their portfolios available for others to copy. The process of doing so is very simple, and all a new trader has to do is browse through a list of experienced traders and choose who to copy based on their past returns.

Likewise, experienced traders who want to start earning by having other traders copy their trades can do so by applying to become an “eToro Popular Investor,” and earn 2% of their assets under management as a management fee.

Originally from Israel, eToro now has offices in Israel, Cyprus, and the United Kingdom. In addition, the broker is serving Australian clients through a partnership with the local forex broker IC Markets.

eToro is regulated the Cyprus Securities & Exchange Commission (CySEC) with license number 109/10. Further, its UK operations are regulated by the UK Financial Conduct Authority, and in Australia by the Australian Securities and Investments Commission.

Although eToro is a broker that has brought innovation to the space in the form of the social trading experience, by some referred to as “the Facebook of forex trading,” spreads are relatively high on this platform compared to other more conventional brokers.

As primarily a CFD broker, traders can choose from a wide range of underlying assets to trade on with eToro. Choices include CFDs based on stocks of popular companies such as Apple and Google, stock indices like Nasdaq and the German Dax, commodities like oil and gold, all popular currency pairs, cryptocurrencies like bitcoin and ethereum, and even exchange traded funds (ETFs).

Interesting to note is that an investor who speculates on an ETF through eToro has the option to go with either the actual ETF without any leverage, or to trade a CFD with the ETF as the underlying asset. In practice, however, the broker makes the choice for the trader by executing buy (long) orders as an order for the actual ETF, while a sell (short) order will be processed as going short with the CFD.

The same principle applies when trading cryptocurrencies on eToro, with both CFDs and “physical” cryptocurrencies being offered. In the event a trader places a buy order for a cryptocurrency, the coin will be purchased by eToro on the trader’s behalf on the unregulated global crypto market. Due to the nature of the crypto market, no investor protection mechanisms apply here.

According to new EU regulations that went into effect on August 1, 2018, the maximum margin on retail trading accounts is set to 30:1 for the most liquid currency pairs, with many less liquid trading instruments having even stricter requirements. eToro complies with these new regulations.

However, by applying to become an eToro Professional Trader, traders can avoid some of these new regulatory requirements while also getting access to a wider selection of trading assets on eToro’s trading platform. In addition, professional traders will have the USD 25 withdrawal fee that eToro charges its other clients, waived.

When it comes to trading platforms offered, eToro differs from most other forex brokers by relying on its own proprietary “social trading” platform, rather than popular choices like MT 4 or TradingView.

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