In this Etoro review, we thoroughly discuss what this popular Israeli fintech start-up is all about. More so, this review will hopefully help us understand more about what this platform has to offer, and whether or not it is worth it.
Just in case you haven’t heard yet, there is a new investment platform available for Americans or those living in the United States.
This platform basically offers trading services. It, in fact, seeks to make trading easier especially for everyday investors. While there are so many online trading platforms out there to choose from, there’s this particular name that has been popular being one of the early comers to this market — that is eToro.
The company has become popular over the years. In fact, it has grown by leaps and bounds from what it was over a decade ago. Today, eToro brings its trading services to more than 6 million customers in not just the US, but in over 60 countries worldwide.
Just a short trivia. Online investing is not a new thing for Americans. There are a lot of studies that show that the online investing industry is really growing over the years. Furthermore, it also is quite surprising to know that in terms of who is investing or trading online, a lot of them fall under those aged 30 to 49 years old.
The above-mentioned data was presented by Statista. It says that in the last 12 months in 2018, 14.59% of Americans who used online investing/stock trading services fall on the said age range. Next to that are even younger people — 12.29% belong to the 18.29 years of age, while 10.89% are between 50 and 64 years old.
To be honest, we were not quite surprised on the data given the (very obvious) fact that the young generation and the mid-generation are the ones who are more financially literate, and that they are the ones who have more access to online financial platforms like eToro.
Anyway, going back to the highlight of today’s review, we are going to particularly tackle essential information every newbie in trading (or even those who are pros but have not tried eToro yet) should know.
In this eToro review, we are going to specifically talk about the following:
- What is eToro all about?
- What are the prices and fees involved?
- What are the features offered?
- What makes it unique?
- How to open an account?
- How to withdraw money?
- Is eToro a scam?
- What are its pros and cons?
eTORO AT A GLANCE
Before we start our eToro review, allow us to share with you the first quick information regarding this online trading platform. This will give you a quick idea of what eToro is all about and what you can expect from it as a potential user.
|Regulation||FCA (UK), ASIC (Australia), CySEC (Cyprus)|
|Minimum Initial Deposit Required||$200|
|Asset Coverage||CFDs, ETFs, Forex, Cryptocurrency, Shares, Commodities, Indices|
|Trading Platforms||Proprietary Web, Mobile Apps|
WHAT IS ETORO ALL ABOUT?
As we earlier mentioned, eToro is an online trading platform. The company was founded in 2006 in Tel Aviv, Israel. eToro provides a wide variety of financial as well as copy trading services.
However, the company made a name for itself by branding itself as a social trading leader. What does this mean? Well, it basically refers to how the company works wherein the platform allows its users to do trading commodities, stocks, cryptocurrencies, indices, and forex through eToro’s social trading platforms. The platforms allow users to make use of their Copy Trading feature, at the same time, learn from other fellow investors.
It’s amazing how the company has grown over the years. From Tel Aviv, eToro has opened up several other offices particularly in the United Kingdom, as well as in Cyprus. But, with regards to their presence, it is nearly universal to date. As we mentioned, they are already present in over 60 countries all over the world.
Just recently, specifically in May 2018, the company has expanded and opened into the U.S. market. It was also then when eToro launched its very own exchange and mobile wallet. To date, eToro already counts with more than 6 million users from all over the world, at the same time, supporting over 15 cryptocurrencies.
By the way, just in case you are interested to know, eToro was founded by David Ring and brothers Yoni (Jonthan) and Ronnen Assia. The Assia brothers serve as CEO and Chief Product Officer, respectively. Meanwhile, David Ring acts as the Chairman of eToro in the United States.
If you are interested to know more about eToro, you may want to watch below informative review by Social Trading Vlog. Just hit the play button to watch the whole thing.
WHAT ARE THE PRICES AND FEES INVOLVED?
Like the previous reviews we made in another online trading as well as personal finance platforms, in this eToro review, we are also going to discuss the prices and fees involved when using this trading platform.
We thought prices and fees are vital in making decisions — particularly if whether or not you are going to use the platform.
So, having said that, here are what you can expect when using eToro:
Compared to most of its competitors, we have to say that eToro pricing is much simpler. The company does not charge commissions. They also do not have a deposit fee.
So, how does eToro make its money then? Well, it does make money on the “spread,” price thresholds above and below the market price of an asset.
Mostly, the spread is set at 0.09% per side. Expect some spread differences though with some assets like cryptocurrencies. If you want a full breakdown of eToro spread costs, you can always go and check out the company’s price guide.
By the way, eToro only accepts US dollars. You can still use other currencies like the Euro but the online platform will convert them into USD and will charge you 0.25% for that service.
As compared to other assets, cryptocurrencies trading spreads are wider. This is primarily because cryptocurrency prices are very unpredictable.
Just so you know, all cryptocurrency spreads range between 0.75% and 3.45%. Bitcoin is the cheapest to trade as it is the most stable of all. Meanwhile, altcoins such as Ethereum and Bitcoin Cash trade with a 1.90% spread. As with EOS, DASH, as well as other trade at 2.9%. Of all the altcoins, Zcash was found to be the most expensive with a 3.45% spread per side.
ETFs are much simpler. In fact, it is just made up of potentially thousands of stocks. ETFs are found to be more stable than the usual stock.
The ETF trading fee is 0.09% per side.
Forex or also known as currency trading spreads are measured in “Percentage in Point (Pips)”. Pips are defined as the smallest price change a platform can register.
Anyway, for popular trading pairs Pips spreads are very small for the stable. For instance, USD/CAD has only 3 Pip spread. Meanwhile, for uncommon pairs such as USD/TRY, the spreads are 50 Pips.
While most Forex pip spreads are 20 or below, a lot is less than 10.
Stocks trade at 0.09% spread. However, it is important to note that Overnight Fees are charged for stock positions that are held for 24 hours or more.
Based on what we found, eToro has apparently had high non-trading fees. In fact, the company charges $10 per month after a year of inactivity. Also, the withdrawal fee is $5.
WHAT ARE THE FEATURES OFFERED?
As part of our eToro review, we are also going to share with you some of the featured offered by this online trading platform.
One thing we notice about eToro, and also one of the things we like about this platform is that it does not necessarily focus on just short-term day trades or long-term investments. What it does is that it offers both. Thus, if you are interested in doing both, eToro can give you that.
Anyway, apart from that, here are some of the eToro features we found to be very note-worthy:
Simple – In the first place, eToro was founded on the idea of making trading more accessible to all. Thus, it is not surprising how simple the platform is. We particularly appreciate the fact that eToro is fairly intuitive, at the same time, easy to understand. If you are a new investor, you will surely like this fact.
Fully Managed Options – As we have mentioned earlier, eToro works for both investors who are interested in day trading as well as those who choose to go for a managed portfolio option. eToro has a CopyFunds program, which offers managed portfolios on different themes, as well as various risk levels.
Social Trading – Currently, eToro offers a sort of a social media platform for cryptocurrency traders outside the US markets. Moreover, investors are given the option to replicate the trading activity of other traders who they fund interesting via the CopyTrader feature. Please note, however, that this feature is not yet available in the US. But for sure, it will eventually hit the US markets in time.
Mobile Application – What better way to make trading accessible than making it available for mobile users, right? Thus, the existence of eToro’s mobile app, making trading easier, simpler, and accessible anytime, anywhere. The eToro mobile app lets you copy, trade, as well as follow the trading social feeds using your very own mobile device.
WHAT MAKES IT UNIQUE?
To be honest, there are so many CFD as well as cryptocurrency platforms out there to choose from, which actually makes it hard for any newbie in the trading industry to choose.
So, the question now is that — of all these trading platforms, why opt for eToro? What makes it stand out from the rest?
The answer to that is this — of all the online trading platforms out there, eToro is perhaps the only service that is fully equipped for both CFD and cryptocurrency services. Apart from that, eToro’s products are well-designed and are intuitive. They are of great quality, and on top of that, they are fun to use.
Currently, eToro offers CFD trading of many securities as well as asset types. It also added cryptocurrency trading to ensure it meets the ever-changing investment landscape. Furthermore, eToro is known also for its wide variety of social trading features that make investing more fun and more diverse for traders/investors of all levels of experience.
HOW TO OPEN AN ACCOUNT?
Also part of our eToro review is the process of opening accounts with the said platform.
Just like most investing platforms, you will need to sign up for an account, which requires the usual personal information. After that, you will be asked to verify your account with a government-issued ID, a verified phone number, as well as a proof of address.
Once your account is verified, you will immediately be able to start trading in cryptocurrencies. You may deposit funds to trade in your eToro account through electronic fund transfer from your online bank account. Otherwise, you may deposit funds via wire transfer. So far these two are the only ways you can deposit funds to your account, which leaves room for improvement on eToro’s end.
Meanwhile, eToro requires a minimum investment for online bank transfer amounting to $50 for your initial deposit, and any additional deposits you will make after that. As with funding your account via wire transfer, the minimum required amount is $500. Meanwhile, the maximum you can add to your eToro account in a day is $10,000.
HOW TO WITHDRAW MONEY?
Withdrawing money from your eToro account is also pretty simple. It only requires that your account is verified, and has at least $50 available for withdrawal. You can withdraw the fund to your bank account.
Meanwhile, if you have funds invested in open positions, what you can do is close them. This way you get to make more money available for withdrawal. Also, you can withdraw any amount as long as you have funds available in your account.
Receiving your funds in your bank account usually takes 3 to 7 business days. This only means, if you need to withdraw money from your account for an unexpected expense, you have to wait for a little before you get the money.
IS eTORO A SCAM?
One question that we want to answer in this eToro review is whether or not the platform is a scam.
If you come to think of it, it’s actually a very valid question. After all, your hard-earned money is involved here.
Particularly with eToro, a lot of people thought it’s a scam because first and foremost, it looks totally different from a lot of other trading platforms out there.
However, it’s a perfect example of do not be deceived by how it looks. Ultimately, eToro is a legit trading platform. In fact, they are a licensed brokerage registered by the Cypriot Investment Firm (CIF).
Also, eToro is regulated in Europe by the Cyprus Securities and Exchange Commission, and in the United Kingdom by the Financial Conduct Authority.
Meanwhile, in the United States, eToro has been more recently licensed in the following states (as of this writing):
- New Mexico
- North Dakota
- South Dakota
It is important to understand that for a while, regulatory changes in the US made eToro unavailable to Americans. However, the company was able to eventually get licensed in the country, thus allowing its investors to use some of its services. Eventually, eToro aims to offer more of its functionality and options to American investors.
In addition, making it indeed a legit trading platform, eToro uses a Straight-Through-Processing platform, which means the investor can leverage eToro’s broker license to access investments directly for a fee.
Also, eToro operates on a No Dealing Desk model. This basically means they do not change the price between you, the user and the market. So, when you trade during active hours, the platform automatically transfers and processes the trade. No price change happens on their end — unless of course the price change because of market changes.
Moreover, eToro has no limits or daily withdrawals.
Having said all that, it is perhaps clear that indeed, eToro is legit and not a scam.
WHAT ARE ITS PROS AND CONS?
This eToro review will not be complete if we are not sharing with you our list of pros and cons. Some of you actually rely on the pros and cons of making decisions.
Having said that, here are some of the advantages and disadvantage we found on eToro:
- eToro is a slick, modern, as well as easy-to-use trading platform.
- It does not charge deposit or commission fees.
- It offers social trading.
- It offers all kinds of investment types in one platform.
- It offers a new blockchain-based Crypto Wallet.
- It charges high withdrawal fees.
- It has a limited choice in the eToro Wallet.
FINAL THOUGHTS ON ETORO REVIEW
It’s nice knowing that there are plenty of trading platforms out there including this amazing platform called, eToro. This, along with its competitors gives traders and investors alike more options on where they want to do business with – rather trading with.
If you are a newbie in the trading industry, we got to say that eToro would be a great choice. As we have mentioned earlier, eToro is fully equipped for both CFD and cryptocurrency services. This allows you to do both in just one platform.
So, after all the information we have shared, have you decided yet?