eToro: A Window Of Opportunities Through CFDs

July 19, 2020
Brokers
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eToro is an innovative, regulated and personalized multi-asset social trading platform with registered offices in Cyprus, Israel, China and the United Kingdom. Furthermore, it counts with millions of users in more than 140 countries and has been operational since 2007. Also, eToro offers the possibility of making active and passive investments for each type of investor out there. In addition, the platform has a CopyTrading system. This system allows users to copy the strategies of the operators with the highest returns and even use filters to select the most popular strategies in the investor network. The platform has more than 20 languages, giving access to millions of people worldwide. .

The platform has hundreds of Contracts for Difference (CFD) on financial assets. For example, commodities, crypto assets, currencies, indices, and ETFs. Moreover, it is possible to carry out operations with leverage. In other words, use debt to finance an operation.

It is true that eToro is a broker that has good characteristics in several aspects. But, we strongly believe that Capital.com is the best online trading platform because it’s one of the easiest and cheapest ways to trade CFDs on equities, commodities, indices, Forex pairs and cryptocurrencies anywhere in the world. Capital.com offers you zero fees on intra-day trading, a lightning-fast web platform and their proprietary Negative Balance Protection. Also, Capital.com gives you the best chance at financial success with a clean, easy-to-use interface.

We analyzed hundreds of data points relevant to the costs, benefits and features of trading with eToro and scored our findings on a 10-point scale across 10 distinct categories.
Fees 8
Signup Process 7
Minimum Deposit 8
Ease of Use 7
Deposit & Withdrawal Options 10
Customer Support 9
Asset Classes 8
Referral Program 2
Demo Account & Educational Resources 8
Safety & Regulation 10
Total 77

What is eToro?

In a nutshell, eToro is an innovative, regulated and personalized multi-asset social trading platform with registered offices in Cyprus, Israel, China and the United Kingdom. It counts its users by the millions in more than 140 countries and offers the possibility of making active and passive investments for each type of investor out there.

Another key feature of eToro, is that it has a large amount of financial assets. It also has functions, tools and analysis instruments, all in a user-friendly platform that allows each type of user to create their preferred investment strategy.

In the following table we show you the countries where legally eToro can no longer provide its services:

AfghanistanCape VerdeGuatemalaMongoliaSao Tome
Aland IslandsCARGuineaMontenegroSerbia
AlbaniaChadGuinea-BissauMozambiqueSierra Leone
AnguillaChagos IslandsGuyanaMyanmarSint Maarten (Dutch Part)
AntarcticaChinaHaitiNamibiaSomalia
Antigua and BarbudaCongo RepublicHondurasNepalSri Lanka
ArmeniaCote d’IvoireIranNetherlands AntillesSudan
ArubaCrimea RegionIraqNicaraguaSuriname
BahamasCubaJamaicaNigerSvalbard and Jan Mayen
BarbadosCuracaoJapanNiueSwaziland
BelarusDemocratic Republic of the CongoKyrgyzstanNorth KoreaSyria
BeninDjiboutiLaosNorth MacedoniaTajikistan
BermudaDominicaLesothoPakistanTanzania
BhutanEl SalvadorLiberiaPalauTogo
BonaireEquatorial GuineaLibyaPapua New GuineaTrinidad and Tobago
Bosnia and HerzegovinaEthiopiaMalawiParaguayTunisia
BotswanaFaeroe IslandsMaldivesPitcairn IslandsTurkey
BruneiFijiMaliRwandaTurkmenistan
Burkina FasoGabonMarshall IslandsSaint Kitts and NevisTurks and Caicos Islands
BurundiGambiaMauritaniaSaint LuciaUganda
CambodiaGhanaMauritiusSaint VincentUzbekistan
CameroonGreenlandMicronesiaSamoaVanuatu
CanadaGrenadaMoldovaSan MarinoVirgin Islands

eToro: Pros & Cons

Pros

  • Easy to use web interface.
  • Competitive rate structure.
  • Platform with the possibility of copy-trading.
  • Excellent graphics.
  • Easy and fast account opening.
  • Possibility of using leverage.
  • More than 20 languages.
  • There is no commission to add funds.

Cons

  • High rates for currencies.
  • Withdrawing money is slow and expensive.
  • No live news broadcast.
  • It only uses the dollar as an account base.
  • There are not many offers.
  • There are fees to withdraw funds.
  • Country restriction to operate.
  • Opening amount higher than other social trading platforms.
  • No electronic communication with brokers.
  • No direct access to the stock market.

Account Types

eToro will allow you to open two types of accounts, a real one, and a paper money demo account. You could even trade both at the same time:

  • eToro’s Real Account: it is a standard investment account with which you can trade with all the instruments that eToro offers.
  • eToro’s Demo Account: with this type of account it is possible to operate with paper money. We’ll cover this account later down the post so keep reading to find out more.
Here’s a breakdown of our 10 scoring categories, each scored out of 10 for a total of 100 points.

#1 eToro: Fees

eToro’s fee structure is simple and low-cost. You will have the following benefits:

  • No management fees.
  • No rollover fees.
  • 0% commission on stocks.
  • No ticket fees.
  • No additional broker fees.

Even though eToro is a no-fee broker, it does charge a $10 USD monthly inactivity fee. This happens when you don’t log into your account for 12 months straight. The only good side is that the inactivity fee is only applicable if there are still funds in the available balance, so you won’t have to worry about becoming indebted with eToro if you abandon your account.

Although eToro offers you an excellent fee scheme, the broker loses points due to inactivity fees.

eToro Fees Score: 8/10

#2 eToro: Signup Process

The platform allows you to create an account easily and free of charge and the process is fully digital. However, to comply with security standards and operate with real money, it is necessary to verify the account in different ways. It’s not that different from opening an account in your local bank branch:

  • Identity verification: eToro will request an image of both sides of your identity document, passport or driving license.
  • Address verification: you will need a recent invoice containing your full name and address.
  • Telephone verification: this is simply a free SMS code you will receive on your mobile phone.
Etoro: Signup Process

The verification process is relatively quick and it won’t take you more than 2 days. Also, you can access the platform in 21 languages. This feature will allow you to fully exploit the tools that eToro offers you, no matter where you’re from.

Etoro: 21 languages

The only real downside to eToro’s signup process is the account activation time, which means that you must wait more than 2 days to operate within the platform. Being able to verify your account quickly is essential because it offers you the possibility of exploiting opportunities in the financial market.

eToro Signup Process Score: 7/10

#3 eToro Minimum Initial Deposit

For residents of Australia and the United States, you are required to deposit a minimum initial balance of $50 USD in order to start trading. For the rest of the countries, the minimum deposit to open a real account on the platform is $200 USD. Additionally, after making the first deposit, all subsequent deposits must be at least $50 USD each. Even though eToro does require an initial deposit, it isn’t really that high, especially considering that other brokers can require upwards of $2,000 USD and more.

eToro Minimum Initial Deposit Score: 8/10

#4 eToro: Ease Of Use

The eToro trading platform is ideal for beginners. It is very basic, intuitive and easy to use. But, for experienced investors, the eToro investment platform falls a bit short because it does not allow customization and is limited in terms of technical analysis and line drawing tools.

Etoro trading platform

eToro App

eToro’s mobile trading platform is very like the web version. It is easy to use and very intuitive. However, the platform does not offer many customization options and technical indicators. Even so, the eToro app has a good rating on the app market (4/5). Customers comment that the app could improve in the following dimensions:

  • Speed: You have to wait a long time for the application to start.
  • Boot stability: Sometimes it seems you have to try several times to start the application.
  • Improve the interface: Some users want improvements in the distribution of the elements.

Unfortunately, eToro does not offer a desktop trading platform, only the online version and the mobile app. The lack of more robust computer platform and the needed improvements in its mobile app make eToro lose points, managing 7/10 according to our scoring criteria.

eToro Ease of Use Score: 7/10

#5 Deposit & Withdrawal Options

There are several methods of depositing on the platform. It is possible to use

  • Credit cards such as Visa, Mastercard, Diners Club and Maestro.
  • Bank transfers or deposits. The initial deposit is $500 USD.
  • Platforms such as PayPal, Neteller and Skrill can also be used.

You can withdraw funds from your eToro account at any time. When you do, the funds are withdrawn using the same payment method as when you made the deposit, and to the same account. For example, if you used PayPal to load funds, then the withdrawn amount will go to your PayPal account. If you deposited via bank transfer, then the withdrawal will go to your bank account, and so on. Also, there is a flat fee of $5 USD to process any withdrawal.

In this aspect eToro is very well qualified for the diversity of funding methods.

eToro Deposit & Withdrawal Options Score: 10/10

#6 Customer Support

eToro’s customer service doesn’t offer many options. You can only communicate through live chat 24/5 and email. However, technical staff responses are generally quick.

eToro also offers alternatives via phone for you to contact their offices. However, take into account that it is not a customer support service. These are their numbers:

  • UK: +44 02038687213
  • Australia: 1-800 778 439
  • EU: +357 25262100

Technical support offers you several alternatives to communicate with the technical advisers. However, the service is only 24/5. For this reason, eToro loses one point in this classification, as the ideal scenario would be to have a 24/7 technical support service.

eToro Customer Support Score: 9/10

#7 Asset Classes

With eToro you can trade hundreds of contracts for difference (CFD) on financial assets. For example, commodities, crypto assets, currencies, indices, and ETFs.

Stocks

You can buy shares through CFDs such as Apple, Tesla, Google, Facebook, Amazon. In addition, you can access stock exchanges in more than 15 markets:

  • Amsterdam
  • Frankfurt
  • London
  • Paris
  • Madrid
  • Milan
  • Zurich
  • Oslo
  • Stockholm
  • Copenhagen
  • Helsinki
  • Hong Kong
  • Saudi Arabia
  • New York

Currency Pairs

You will have access to a large number of investment possibilities such as:

  • EUR/USD
  • GBP/USD
  • AUD/USD
  • USD/JPY
  • USD/CAD

Gold

Yes, you can trade gold through CFDs.

ETFs

Yes, through CFDs you can access ETFs like:

  • SPY
  • VXXB
  • TLT
  • HMMJ
  • QQQ

Crypto

You will be able to trade cryptocurrencies through CFDs. You can buy for example:

  • Bitcoin
  • Ethereum
  • Ripple
  • IOTA

While it is true that eToro has a number of alternatives in most of the financial instruments it offers, unfortunately, you will not be able to invest in bonds and the number of options within each asset class could also be a lot better. These factors reduce the diversification capacity of your portfolio and therefore eToro’s score in this dimension.

eToro Asset Classes Score: 8/10

#8 Referral Program

eToro offers a referral program that allows you to earn $50 USD for each friend you invite. You must consider the following elements to earn the money:

  • New eToro customers cannot be registered on eToro’s websites or mobile apps.
  • The new customer must complete their first deposit and account verification within 6 months of eToro’s registration date.
  • Both the referring and referred friends must meet all of the following additional terms not later than the promotion end date: (i) be residents of one of the eligible states; (ii) be fully verified by eToro according to its policies and procedures; (iii) deposit at least $50 USD in their eToro account. Customers of other eToro entities (outside of the U.S.) shall not be entitled to participate in this promotion, either as referring or referred friends.

Although eToro offers the possibility of winning $50 USD each time you refer someone who meets all the necessary requirements, the bonus could be higher. In fact, in general, referral bonuses are higher and that is why eToro doesn’t fare well compared to other competitors.

eToro Referral Program Score: 2/10

#9 Demo Account & Educational Resources

As we mentioned previously, you can open a demo account in eToro. The demo account allows you to practice investment strategies exactly as you would in the real market. You’ll have access to the same statistics, indices and other market information as if you were really trading. That way, you’ll know for sure when you’ve hit a home run or when you strikeout. It also lets you get to know the platform to make trading more natural once you start for real.

Educational Resources

In eToro, you will find very useful tools that help you design and understand trading styles. On the eToro platform, you will find a blog, economic calendar, and results reporting calendar.

The eToro Blog

eToro’s blog is a great place to find articles and news about the investing world. In addition, you’ll also find conversations between investors and information about the markets. Moreover, if you want to delve deeper into the theoretical foundations of the financial world, you’ll find ample resources there as well.

The Economic Calendar

Markets are like living beings that are susceptible to both foreseen and unforeseen events. eToro’s economic calendar includes all relevant events that could affect the market. This information is very important because many financial instruments could present volatility to specific events.

Results Reporting Calendar

On the platform, it is possible to have access to a list of the next results reports of the listed companies. Also, the reports are ordered by market capitalization. On the portal, you’ll find details of the financial instruments, sectors and the expected publication date.

The educational resources that eToro offers is good. However, there are other brokers such as Capital.com that offer a much more complete and varied educational resources.

eToro Demo Account & Educational Resources Score: 8/10

#10 Safety & Regulation

eToro brokerage services are provided by eToro (Europe) Ltd. (“eToro Europe”), a registered Cypriot investment firm (CIF). Furthermore, the company registration number is HE20058.

eToro Europe is regulated by the Cyprus Securities and Exchange Commission (CySEC) under license number 109/10. Similarly, in the United Kingdom, eToro (UK) Ltd. (“eToro UK”), company registration no. 7973792 is licensed and regulated by the Financial Conduct Authority (FCA) under company reference number 583263.

eToro Europe and eToro UK operate and comply with the Markets in Financial Instruments Directive (MiFID). Likewise, in Australia, services and products are provided by eToro AUS Capital Pty Ltd. (“eToro Australia”). eToro Australia ensures that its clients receive services from eToro Europe.

eToro offers you great security when you invest your money because it is a broker that has important regulations. For this reason, eToro has a solid rating in this regard.

eToro Safety & Regulation Score: 10/10

While researching 100+ of the world’s top brokers, we’ve noticed what works and what doesn’t from the customer’s point of view. That’s why our final test for any broker is to compare it to Capital.com, which scores 91/100 points across the 10 categories mentioned in this review.

eToro vs. Capital.com

One of the most relevant aspects when taking the best and most profitable investment ideas is that you can have a platform that can add value to your strategies. Moreover, it should allow you to be confident when investing your money and provide the means to do the best analysis while charging you the lowest rates. Taking into account the most relevant aspects for an investor we prefer Capital.com over eToro for the following reasons:

It’s Easier To Use

While it is true that eToro’s investment platform is good, we think that your best option is Capital.com. It has a very stable platform, is easy to use and is intuitive. Furthermore, it has an interface that follows the best data processing standards for traders.

Capital.com: It has a very stable platform, is easy to use and is intuitive

A Better Mobile app

Users comment on the eToro app download page that the app has significant flaws. In this regard, we also believe that Capital.com is a better option for you because it offers more flexibility and it’s an app with an excellent rating and very good user reviews.

A better Interface

Capital.com offers a powerful stand-alone desktop trading platform that will let you trade like a pro, something that eToro simply doesn’t offer. Also, your computer can perform better thanks to the Capital.com interface. Keep in mind that investment platforms generally need modern and sophisticated hardware. This aspect causes you to have to incur additional expenses to have an adequate computing capacity. With Capital.com there is greater stability of your computer equipment.

eToro In Summary

  • eToro is an innovative, regulated and personalized multi-asset social trading platform with registered offices in Cyprus, Israel, China and the United Kingdom with millions of users in more than 140 countries.
  • The platform offers hundreds of contracts for difference (CFD) on financial assets.
  • eToro charges a $ 10 USD monthly inactivity fee.
  • The platform allows you to create an account easily and free of charge
  • For residents of Australia and the United States, the initial deposit is $50 USD. For the rest of the countries, the minimum deposit to open a real account on the platform is $200 USD. Additionally, after making the first deposit, all subsequent deposits must be at least $50 USD each.
  • The eToro trading platform is very basic, intuitive and easy to use; it is ideal for beginners.
  • There are several methods of depositing on the platform. It is possible to use credit cards such as Visa, Mastercard, Diners Club and Maestro. In the case of a bank transfer deposit, the initial deposit is $500 USD. Also, platforms such as PayPal, Neteller and Skrill can be used.
  • You can open a demo account in eToro.
  • At eToro, you will find very useful tools that will help you design and understand trading styles.

In general terms, we think that Capital.com is a better option because it offers a broader base of investment options, the investment platform is easier to use, and the educational content is more complete and useful. Also, the trading platform has an excellent interface and far better withdrawal options. Capital.com is ideal for all types of investors. If you are a beginner or an experienced trader you will see that this wonderful broker is an ally that will allow you to fully exploit capital gains

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