eToro Review

last updated

August 18, 2022

written by

Kerry Harrison

Ease Of Use

5/5

Fees

4/5

Trading Options

4.8/5

Customer Support

4/5

Have you been looking for the perfect trading platform? There are so many different options, which can be overwhelming for beginners.

eToro is quite a familiar face in the industry now, though, especially with the recognisable logo featuring a bull. If you are wondering whether or not this is the right trading platform for you, I can help.

I have experience with a whole host of trading platforms, and eToro is one I have used for quite some time now.

Below, I will aim to answer all of the questions you have about eToro, covering the different features, as well as the pros and cons, so you can determine whether or not this is right for you.

1. Background information on eToro

Before I delve into the different features that are available, let me explain what eToro is. This is a regulated and licensed trading platform that is available to users worldwide.

Brothers Ronen Assia and Yoni Assia set the company up with David Ring in 2007, and since then, it has gone from strength to strength. 

The company is actually headquartered in Tel Aviv, Israel, yet it has registered offices in the UK, US, Cyprus, and Australia. It was most recently valued at $8.8 billion. 

However, like the other reviews on my website, I will be delving deeper into the features of eToro, helping you to understand whether this trading platform is right for you and your needs. So, let’s take a look…

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2. What can you invest in?

eToro is a multi-asset investment platform, which means you can invest in ETFs, stocks, and crypto assets, all in one place. There are a few extra functions as well.

Investing in crypto assets

You have the option of investing in more than 60 different cryptocurrencies and assets. Examples include:

eToro crypto

You are also able to use the eToro crypto wallet for storing your tokens until you are ready to spend them, send them to a friend, or sell them. 

Investing in stocks

You can invest in more than 2,700 stocks on this platform. Plus, there is a selection of ETFs. Invest with as little as £8 to get started. 

eToro stocks

Most investors like to select their own collection of assets. However, there is also the option to invest in a readymade ‘Smart Portfolio.’ More on that in the next section! 

You have the option of trading CFDs, which are Contracts for Differences. They are risky and complex, so you should only go down this route if you are experienced. Not only can you lose your initial investment but you can end up owing money as well.

Let’s take a look at how to go about both options in more detail:

How to trade stocks on eToro

As mentioned, you have the option of either buying and selling stocks outright, or you can trade stock price movements with CFDs. 

Here are the steps to take:

Purchasing stock outrights 

  1. Create an account and log in to eToro
  2. Go to the Markets page 
  3. Choose Stocks, and you will be presented with a complete list of different stocks available for trading 
  4. Choose the stock you want to invest in, and then select ‘Trade’
  5. Click on ‘BUY’
  6. Enter the number of units of stock you want to buy or the amount of money you want to invest in the stock 
  7. Make sure the leverage is set to XI
  8. Set the take profit parameter should you wish
  9. Select ‘Open Trade’

Trading stocks eToro

Trading a stock via a CFD

  1. Create an account and log in to eToro
  2. Go to the Markets page 
  3. Choose Stocks, and you will be presented with a complete list of different stocks available for trading 
  4. Choose ‘BUY’ or ‘SELL’ – depending on what direction you want to take (i.e. SELL if you expect the stock to fall or BUY if you think it is going to rise)
  5. Enter the number of units of stock you want to buy or the amount of money you want to invest in the stock 
  6. Choose your leverage, for example, X5 or X2
  7. Set your stop loss and take profit parameters
  8. Select ‘Open Trade’

Smart portfolios

Another option is to invest in one or several of their smart portfolios. This enables you to invest in a pre-chosen collection of assets, with the objective of diversifying your holdings.

Some portfolios will concentrate on a specific theme, for example, this could be an industry, be it crypto or technology. Other portfolios are composed with a certain investment strategy in mind.

You can also make the most of CopyPortfolios, which enable you to automatically replicate the portfolios of successful investors on the platform. If these investors get sufficient copiers, they earn extra income on top of the profits from their investments. 

You will need to invest a minimum of £380 in order to use CopyPortfolios and Smart Portfolios. The only way to cash out is by closing the entire portfolio, so do keep this in mind.

3. Fees

Needless to say, fees are also one of the most vital elements to consider when selecting a trading platform. You want to be sure that you are going to be able to keep as much of your money as possible.

Fees

When looking at the fees in place, I have split them up into two categories; trading fees and non-trading fees.

Trading fees happen during trading, for example, conversion fees, financing rates, spreads, and commissions.

Non-trading fees are charges that are not directly related to your trading activity, for example, inactivity fees or withdrawal fees.

Trading fees

In terms of trading fees, eToro is certainly one of the more affordable platforms out there. Fees can be quite difficult to understand, though, as it depends on what you are trading and how much of it you are trading. However, I will give you a brief overview.

Stocks are commission-free, which is a real highlight. There are no added broker fees, ticket fees, or rollover fees.

If you want to invest in crypto, you will be charged a simple, single, and transparent fee of just one per cent. 

CFDs are often a bit more difficult to comprehend in terms of fees, as you will incur overnight fees and spreads. I’d recommend checking out this CFD fees page so you can work out how much you’re likely to be charged based on your likely investment.

Non-trading fees

While trading fees may be highly competitive, non-trading fees are high, so eToro really is designed for an active trader.

You will be charged $10 per month after one year of being inactive. However, activity can be as simple as logging into your account. So, simply log in, and you will be able to avoid these penalties.

It is important to note that you will also be charged $5 per withdrawal.

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4. Security

One of the reasons why eToro is considered one of the best trading platforms by many is because of the level of safety and security. One thing you never want to do is take a risk with your hard-earned cash, which is why security should always be a chief priority when evaluating these platforms.

eToro security

The good news is that eToro operates in line with ASIC, CySEC, and FCA regulations, which means there are stringent measures in place to protect investors. 

The company state that they use SSL encryption to guard personal information and that all funds are kept secure in top-tier banks.

In addition to this, they offer Two Factor Authentication on your account, which means that not only will you need to enter a password to gain access but you also need to provide a verification code that will be sent to your mobile phone. This is an added security layer, which you can turn on or off via your Account Settings, but I highly recommend you keep it switched on.

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5. Customer Support

The customer support at eToro has definitely improved in recent times. I was delighted to see that they added a live chat function to their offering, so you can contact someone for instant assistance if needed.

If you do have a technical issue, you can find yourself waiting a few days for help, which can be a little bit frustrating, especially if you miss out on some trades because of it. However, the customer support team is sincere, and they do go the extra mile to ensure your query is resolved.

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6. Is eToro right for you?

With so many trading platforms out there today, it is important to choose a solution that is right for your goals and level of experience.

If you are new to the world of investing, eToro could provide you with a good starting point. The platform is very easy to use, and you can access it via a mobile app or desktop browser.

You also have the ability to select from a wide range of thousands of different stocks and shares, yet if you do not feel confident selecting your own portfolio, there is always the option of investing in one of their readymade portfolios.

If you are looking to connect with other investors and enjoy more of a social experience, eToro is also a worthy choice. There are some great social elements that enable users to share their thoughts and advice.

7. Summary

As you can see, eToro is certainly one of the better platforms on the market today for investors looking to dabble in stocks, shares, and potentially cryptocurrency.

There are a few drawbacks you do need to keep in mind, though, such as the non-trading fees and the fact that customer support could be better.

Overall, though, if you are looking for a cost-effective starting point, this is certainly a platform worth considering. You won’t be charged any management fees or commissions on the stocks and ETFs you sell or purchase.

Rather than making money via share investing fees, eToro generates profit via crypto investing fees, currency conversion fees, inactivity fees, and withdrawal fees, so if it’s regular stocks and shares you are looking to invest in, this could be the most suitable platform for you.

8. FAQ about eToro

  • Is there a withdrawal fee at eToro? Yes, all withdrawals are subject to a £5 withdrawal fee, so do keep this in mind when budgeting.
  • Is eToro better than Coinbase for crypto investing? Generally speaking, you will have a bigger selection of crypto options available at Coinbase. However, transaction and trading fees are less on eToro. Plus, if you need some extra guidance and assistance in getting started, I would go for eToro. 
  • How much should I invest in eToro? There is typically a minimum deposit of £50 on your first-ever deposit, and then a £10 minimum deposit after this. However, it is important to stress that you should never invest more money than you can afford to lose. 
  • Is eToro a good choice for beginners? Yes, eToro is a wise choice if you are just getting started with trading. The trading platform is not overly complex, and it does not have a steep learning curve. There is a great balance of features and tools, which is ideal if you are looking to trade for the first time. 
  • Can you get rich off eToro? It does not matter what trading platform you use, there is the opportunity to make money, but there is also the possibility of losing money as well. 

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