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16 Oct

What to Expect from this Review

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eToro is probably one of the most marketed brokerage firms across the online community. From Social Media to websites that have Google Ad Sense, eToro had positioned itself as a brokerage with great visibility and good repute. 

The review team aims into looking at why the brokerage had been given this much attention by the worldwide web and if this attention is due and deserved.

This review is a result of months spent with eToro. The team had availed and had conducted a probe into the claimed soundness of the firm’s offers and services. The methodology employed by the review team had been exhaustive, as it looked hard into the firm’s 5 pertinent facets:

  1. Trading instruments
  2. Trading platforms offered
  3. Fee structures
  4. Commissions
  5. Account Types
What to Expect from this Review

About eToro

Established in 2007, eToro is an Israeli start-up that specializes in Social Trading. Its main market is the United Kingdom and is regulated by the Financial Conduct Authority (FCA). As it also operates in Australia, the brokerage’s business is being sanctioned by the Australian securities and Investment Commission (ASIC). eToro’s other clients are being served by the Cyprus Securities and Exchange Commission (CySEC).

Trading through eToro is seen by the online trading community as safe as the firm’s branches in the United Kingdom and Australia goes under the guidelines of leading financial authorities.

eToro is not listed on any stock exchange. It does not declare any of its earnings or losses through an annual report or takes cues from a bank parent.  

Offers and Services

As already mentioned, this review will focus on the firm’s three key offers. Its specific details will be discussed at length through this segment.

Trading Instruments

eToro allows its clients to trade the following instruments:

  1. Stock Index CFDs

These instruments include SPX and EUSTX50.

  1. Stock CFDs

Apple and Vodafone are the two main Stock CFDs that the firm provides 

  1. Forex Currency Pairs

eToro allows the trading of 5 currency pairs, namely:

EUR/USD

GBP/USD

AUD/USD

EUR/CHF

EUR/GBP

Despite allowing only three asset classifications to trade, eToro is able to provide smart trading conditions for its clients. These assets may not be expansive in number, but the main instruments, especially if we look at the currency pairs for Forex trading. The 5 currency pairs are seen by traders as ones that can result into profitable trades and therefore would look impressive in any investment portfolio. 

Fee Structures 

In general, the fees charged by eToro on trades only go from low to average:

S&P 500 CFD

The fees for this CFD are already built into its spread. During the peak trading hours, the average spread cost is at 0.7.

Europe 50 CFD

As with S&P 500, the fees are already within the spread. The peak hours see the average spread cost at 3. 

EURUSD 

The currency pair, EUR/USD is considered to be at an average. The average spread cost is at 1.2 pips within the peak trading hours.

Inactivity Fee

Should the trader happen to be inactive for a few months of trading due to other professional concerns, he or she is not charged with too much. The trader is only required to pay $10 and this only comes after a year of being inactive.

Commissions 

In real Stock Trading, eToro provides zero-commission that is valid across all countries. Australia is an exception as Australian citizens are only allowed to trade U.S. stocks, commission-free. With this, traders are actually buying real stocks, not CFD products without having to use leverage.

To test out these trading specifics, the review team had decided to set up an account with the brokerage.

As this was needed, the following had been observed:

  1. The general minimum deposit is $200
  2. For traders coming from Australia and the United States, the minimum initial deposit is $50
  3. Traders from Russia, China, Hong Long, Taiwan, and Macau are required a deposit of $500
  4. Probably the highest minimum deposit, ironically, is required from Israel-based traders. The minimum deposit for such is pegged at $500.

Meanwhile, the minimum amount required of traders for them to perform bank transfers is at $500.

What to Expect from this Review

Account Types

Learning through the trading accounts that eToro offers is simple in that the brokerage only offers two types of account:

  1. Demo Account

After signing up with an email account or a Facebook or Google account, a trader may already start performing simulated trades with a digital fund of $100,000.

  1. Live Account

Should the trader want to turn the Demo Account into a Live Account, he or she should be able to provide the following documents:

  1. Proof of Identity – a copy of one’s passport or any personal ID
  2. Proof of Residency – a utility bill or any bank statement

Deposits and Withdrawals

Through eToro, Credit and Debit cards are available as means of withdrawals and deposits. 

While it is good to note that eToro boasts of an intuitive platform, with no fees necessary to perform a deposit, there are three things that the review team had noted:

  1. The exclusivity of the base currency
  2. A 5-dollar withdrawal fee
  3. A conversion for non-USD deposits

These are considered cons in eToro’s well laid-out offers and services. And while these stand, it is not seen by the review team as deterrents to trading with the firm. These are things that can easily be shrugged off as part of eToro’s attempt at profit.

Trading Platforms

eToro offers its own trading platform which is available across different devices. It has a web version, a mobile application, and a desktop application.

The eToro platform is available in a number of languages including Arabic, Chinese, Dutch, French, and German, just to name a few. 

It includes features that make trading more convenient such as placing different types of orders (Market Order, Limit Order, Stop-Loss Order, and Trailing Stop Loss Order). Price Alerts, a built-in Search Function, and a two-step login system for greater security. 

Trading with eToro

With everything that had been outlined, trading with eToro seems to be good idea. The testimonies by actual clients, the promotional claims, and the observations made by the review team affirm each other. As this is the case, the team strongly recommends interested parties to give eToro a shot, although, looking deeply into other reviews regarding the brokerage would still be considered wise.