eToro


eToro Review 2020 for South Africa - The Copy Trading Pioneer

etoroFounded in 2007, eToro is a well-established Israel based fintech start-up and multi-asset trading platform, providing both CFD and non CFD products. It was originally founded by the Assia siblings, along with their friend David Ring in Tel Aviv Israel. It has fast become one of the primary online brokerages for social trading. They have almost changed the way beginner online traders trade in the financial markets, through their open-book social trading platform.

A unique aspect of eToro is that it allows experienced traders to become “leaders” within the social community and can earn from their “followers”. Originally only offering forex trading, eToro has now expanded to provide commodities, stocks, cryptocurrencies, and market indices.

 


 
etoro overview
eToro Website

Overview:

  • Minimum Deposit: 200$
  • Maximum Leverage:
  • Tradable Assets: Currency Pairs, Stock Index CFDs, Stock CFDs, ETF CFDs, Commodity CFDs, Bonds CFDs, Futures CFDs, Cryptocurrencies
  • Regulated by: CySec, FCA, ASIC, MiFID
  • Demo Account: Yes

Note: Your capital is at risk


 

eToro License & Regulation

eToro (Europe) provides the brokering services of eToro, which is registered as a Cypriot Investment firm or CIF, with the company registration number, HE20058. eToro Europe is regulated by CySEC or the Cyprus Securities & Exchange Commission with the licence number 109/10.

eToro UK is regulated in the United Kingdom by the Financial Conduct Authority or FCA, with the firm reference number 583263 and company registration number 7973792. Both eToro UK and eToro Europe comply with and operate under the Markets in Financial Instruments Directive or MiFID.

eToro offers services and products in Australia via eToro AUS Capital Pty Ltd. With the registration number ABN 66 612 791 803, it is a holder of an AFSL or Australian Financial Services Licence. It is regulated under the Commonwealth Corporation Act. eToro Europe provides services to eToro Australia clients.

 

eToro Signup and Registration

The process of signing up and registering seems pretty straight forward and easy. Users simply have to go to the official wwe.eToro.com page and click on the “Join Now” or “Trade Now” button. They will be re-directed to a page with an electronic form. Here, users are required to enter all the personal data that is required to open a new account.

Users simply have to fill in all the relevant information requested in the form. Additional options include logging in via a user’s Gmail or Facebook account. They are advised to take a look at eToro’s privacy policy and Terms and Conditions before submitting their information for review. After reviewing all the terms, users have to check the appropriate box to indicate their agreement. They can then submit the information by clicking on the ‘sign-up’ button.

Newly registered investors are required to confirm residence as part of the KYC process. They are also required to produce proof of identities, such as a valid passport or any other valid photo ID. New investors are also required to fill out a questionnaire to help eToro custom-tailor a service package that is ideally suited to the investor.

etorosignup

 

eToro Account Types

eToro offers only two types of accounts. They provide a live account, as well as a demo or virtual account. The minimum deposit for an account at eToro is $200. However, it differs in certain countries, as given below.

  • For residents of Russia, Hong Kong, China, Macau and Taiwan, the minimum deposit is $500
  • For residents of Israel, the minimum deposit is $10000
  • For residents of Australia and the USA, the minimum first time deposit is $50

 

The demo account is a perfect way for newer users to try out and experiment with the platform, as it is provided with virtual money.

 

Trading conditions

 

eToro Minimum Deposit and Minimum Investment in South Africa

South African users need a minimum of $200 to take part in Copy Trading. The minimum investment for CopyPortfolio is $5000. The minimum quantities for manual positions largely depend on the nature of the instrument used. For instance, it is just $25 for currencies, cryptocurrencies, and commodities. The minimum deposit for stocks is $50 and $200 for indices and ETFs.

 

Minimum Trade Size

The minimum trade size depends on exposure in the form of leverage times the invested amount (, (T&Cs apply). This applies to users who registered on April 2, 2017, or afterward. The minimum trade size for ETFs and stocks, for commodities and indices and Forex is $500, $2500, and $5000 respectively.

 

Instruments

Although primarily being a CFD and forex broker, eToro has expanded to offer real stocks, different cryptocurrencies as well as ETFs. It offers a total of 47 currency pairs, 1900 stock CFDs, 145 ETF CFDs, 13 Stock Index CFDs, 6 Commodity CFDS and 17 Cryptocurrencies.

eToro Forex/CFD Trading: As mentioned before, eToro offers a total of 47 currency pairs for users to trade on. It also provides Forex Spot Trading.

  • Assets: EUR/USD, GBP/USD, NZD/USD, USD/CAD, USD/JPY, USD/CHF, AUD/USD, EUR/GBP, EUR/CHF, EUR/JPY, GBP/JPY, EUR/AUD, EUR/CAD, AUD/JPY, CAD/JPY, CHF/JPY, USD/HKD, USD/ZAR, USD/RUB, USD/CNH, AUD/CHF, AUD/CAD, AUD/NZD, EUR/NZD, GBP/AUD, GBP/CHF, GBP/NZD, NZD/CAD, NZD/CHF, NZD/JPY, CAD/CHF, USD/NOK, USD/SEK, NOK/SEK, EUR/NOK, EUR/SEK, USD/TRY, USD/MXN, USD/SGD, GBP/CAD, ZAR/JPY, EUR/PLN, USD/HUF, EUR/HUF, GBP/HUF, CHF/HUF and USD/PLN
  • Maximum Leverage: For retail clients of eToro (Europe) and eToro (UK) Ltd, maximum leverage for major currency pairs such as EUR/USD is x30 while for non-major currency pairs, it is x20. For non-EU clients like South Africa and of eToro Australia, it is x400 for currency pairs. (T&Cs apply).
  • Spreads: Spreads vary according to the type of asset traded. The EUR/USD currency pair is charged with a 2 pip spread.

 

eToro Cryptocurrency Trading

Compared to some other crypto-specific platforms, eToro offers a limited amount of cryptocurrencies as the platform is more general in nature, rather than focusing solely on cryptocurrency trading. It has recently expanded its offerings to include most of the popular cryptocurrencies available presently. When traded short, eToro offers Cryptocurrency CFDs as well.

  • Assets: Supported Cryptocurrencies on the eToro Platform include Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic, Ripple, Litecoin, Dash, Cardano, IOTA, Stellar Lumens, EOS, NEO, ZCash and Tron.
  • Maximum Leverage: The maximum leverage for Cryptocurrency trading is x2. Leveraged cryptocurrency positions, however, cannot be transferred to the eToro Wallet from the eToro Platform. (T&Cs apply)
  • Spreads: Spreads can vary based on the market conditions and liquidity of the assets in question. Some of the daily break spreads of cryptocurrencies are as follows: 
    • Bitcoin – 1.5%
    • Bitcoin Cash – 5%
    • Dash – 3%
    • Ethereum – 2%
    • Ethereum Classic – 5%
    • Litecoin – 3%
    • NEO – 5%
    • Stellar- 5%
    • Ripple – 3%

 

 

Trading Platform Review

eToro has come a long way since it was founded in 2007, boasting close to 1000000 clients worldwide at the moment. One of the key features of this platform happens to be the convenience and ease when it comes to the implementation of copy trading. There are many traders using the eToro platform who want their trading style to be copied and also follow risk-control rules. This allows any retail account holder to mimic the trades as well as the trading strategy of a successful trader. Additionally, while many other brokers provide the same kind of feature, eToro has done a great job of integrating social media communication along with it.

etoro platform

 

eToro Social Trading / CopyTrader

Copy Trading also known as Social Trading is one of the most innovative and distinctive features offered by eToro. The “CopyTrader” allows a user to one by one, copy the portfolios of other, more successful traders on the platform. They can browse through the portfolios of other eToro Traders, to take a look at their trading performance record on a monthly and annual level.

eToro also allocates a risk score to each of the traders having portfolios. They also include other stats for each trader, such as average holding time, performance on charts, trades per week, as well as the opportunity to check out the trader’s profiles and newsfeed comments.

For Copy Trading, the minimum and maximum amount one can invest in a single trade is $200 and $500,000, respectively. It allows a user to copy a maximum of a hundred traders simultaneously.

One disadvantage of the CopyTrader is that users have to close the full amount of their positions, and cannot close part of it.

 
 

 

eToro CopyPortfolio

eToro’s CopyPortfolio is an investment fund which also doubles as a CFD portfolio. Unlike Copy Trading, where users can follow one trader, CopyPortfolio allows a user to invest either in a portfolio or in a theme of the best eToro traders.

  • Users can invest via CopyPortfolio by investing directly in a portfolio containing multiple “star” traders.
  • Users can use the cryptocurrency CopyPortfolio
  • Users can invest in themes. Themes can comprise of a portfolio of big banks or cryptocurrencies. For instance, the Big Banks CopyPortfolio is comprised of CFDs traded by large investment banks such as Bank of America, HSBC and Citi.

 

eToro has clearly indicated the proportion of CFDs in the specific CopyPortfolio. Users can read the investment strategy and check asset distribution and performance statistics. CopyPortfolios are built around a theme, which is usually built by either eToro’s external partners or its algorithms.

The minimum investment amount for CopyPortfolio is fixed at $5000. eToro also checks the user’s financial knowledge and determine whether CopyPortfolio is right for the user or not.

 

eToro Wallet

eToro provides a Cryptocurrency wallet as a separate mobile app. Here, users can deposit and withdraw cryptocurrencies held by eToroX, the associated cryptocurrency exchange. eToroX is the custodian of eToro’s private keys. The eToro wallet is very similar to the eToro mobile app, and also includes the social trading feature.

This multi-signature eToro crypto supports all the cryptocurrencies stated above. It is available for both iOS and Android devices.

The eToro Wallet provides functions such as exchanging cryptocurrencies directly, transferring cryptocurrencies from User eToro accounts as well as managing and storing different cryptocurrencies.

 

eToro App – Mobile Trading with eToro

eToro’s Mobile App is available for both iOS and Android devices. The look and feel of the mobile App are almost identical to that of the web version. To unify platform experiences across devices to provide a seamless experience, it has provided the sync watch-list feature.

Charting on the mobile app is as responsive as the web platform, even though there are just five indicators provided compared to the 67 present in the web version. It also does not provide any drawing tools which would certainly be a nice addition. Other than that, the mobile app provides all the necessary functions and is nicely integrated.

etoro app

 

Deposits and Withdrawals

Deposits and withdrawals can only be made once the users have their accounts verified. eToro offers a lot of convenient payment methods including Credit Cards, Neteller, Skrill, Wire Transfers, Yandex Money, GiroPay, and PayPal.

The minimum withdrawable amount is $50. eToro additionally charges a $5 withdrawal fee (it was reduced from $25 since February 2020). Usually, it takes one business day to process a withdrawal request.

 

eToro Fees

Compared to other brokers, eToro’s fee is low. It consists of two types of fees, trading fees, and non-trading fees. Trading fees are any fees associated with trading, which can be in the form of conversion fees, financing rates, commissions, and spreads. Non-trading fees include non-trading related charges, such as inactivity fees and withdrawal fees.

  • Stock and ETF fees: eToro offers zero-commission ETF and stock trading for European clients. It charges a small fee for non-EU clients.
  • CFD fees: CFD fees are also generally low compared to its peers. For a $2000 long position which is held for a single week the eToro CFD fees are as follows.
    • Apple CFD fee: $6.3
    • Europe 50 Index CFD fee: $2.7
    • S&P 500 Index CFD fee: $2.4
  • Forex Fees: For a $20000 long position with a 30:1 leverage applied; the forex fees are as follows.
    • EUR/USD fee: $19.6
    • AUD/USD fee: $12.4
    • GBP/USD fee: $16.2
    • EUR/CHF fee: $11.8

 

eToro Demo Account

eToro provides a demo account with virtual money. This provides a great opportunity for newcomers and novice traders, who can use the demo account to test the market, their strategies and trading methodology, without the danger of risking real money during trades.

 

Note: Your capital is at risk

 

eToro Education

Providing educational resources can be a great way to assist novice users to start trading on a platform. When it comes to eToro, they have provided “interactive trading courses” section. It is divided into two categories, the investor course, and a trader course. The course is quite limited in its contents and does not offer an in-depth trading guide. However, eToro also provides a platform guide which present an easy 5-step walk-through.

 

eToro Bonus and Special Features

eToro offers a $50 cash bonus (T&Cs apply) to new users who have signed-up using our links to register. They also get a $50 cash bonus (T&Cs apply) for every person the user refers to the platform.

 

eToro Pros and Cons: Should I Trade with eToro?

 Pros  Cons 
  •  Seamless account opening
  •  Forex fees are steep
  •  Social trading experience
  •  One account base currency
  •  Free Stock and ETF trading for the EU
  •  Slow withdrawal method

 

 

Best Features of eToro

        etoro logo Features of eToro:
  • Innovative features such as social trading (CopyTrader) and CopyPortfolio
  • Zero-commission stock trading in Europe
  • Fast and seamless account opening
  • Powerful web and mobile apps

 

 

 

Frequently Asked Questions

1. What is an eToro inactivity fee?

eToro has an inactivity fee of $10 per month after an inactivity period of one year.

2. eToro MT4: is it available?

eToro does not support the MetaTrader 4 platform. It uses a propietary platform

3. Where is the eToro Login?

The login option is found at the top right-hand side of the official website. Users must enter the required fields to login.

4. eToro Welcome Bonus: Is it available?

eToro has offered a welcome bonus of $50.

5. Are there eToro Overnight fees?

etoro charges overnight fees, which is a small fee they charge for lending the user money and hold a stock overnight. For instance, the overnight fees are 1.55% for a $1000 investment in a US Stock for one month. It is to be noted that no overnight fees are charged for users who trade stocks but do not leverage them. (T&C Applied)

6. eToro negative balance: Can an account become negative?

An eToro user’s balance can become negative due to the account being invested in open positions or when trading losses occur. When this happens, eToro performs a margin call, where they close all the user’s open trades.

7. Is eToro offering a no deposit bonus?

eToro offers users the opportunity to earn a free bonus without depositing a single penny (T&Cs Apply). It is usually offered during special events such as Cyber Monday or Black Friday

 

 

Conclusion

eToro is one of the most popular multi-asset trading platforms in existence today. It excels in many aspects compared to several other brokerage services in existence today.

Note: Your capital is at risk