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eToro enables users to trade low-priced stocks listed on major exchanges like NYSE and NASDAQ, ensuring transparency and regulatory oversight. Low-priced stocks, often defined as stocks priced below $5 per share, are available as real stocks on eToro, not OTC stocks, which are excluded from the platform.
Low-Priced stocks on eToro present risks due to volatility and low liquidity, which can lead to slippage, challenges in trade execution and high losses from small price changes when bought in large quantities.
Cheap stocks investing on eToro is better suited for experienced traders who understand the risks of the stock market, and casual investors should carefully evaluate their investment goals before trading any low-priced stock.
How does Stock trading work on eToro?
eToro Stock Trading works by offering both real stock ownership and CFD stocks. eToro users buy real stocks when their positions are long and without leverage, while CFDs are applied when shorting stocks or using financial leverage.
eToro allows users to trade real stocks with full ownership when no leverage is applied, and eliminates fees such as markups and overnight fees, which makes stock trading on eToro a cost-effective choice for investors.
Trading CFD stocks on eToro incurs overnight fees regardless of whether the trader goes long or short. While overnight fees on eToro stocks are typically just a few cents, they can accumulate over time, making CFDs less suitable for long-term investments.
To start trading stocks on eToro, a minimum deposit starting at $50 (depending on the country) is required. This deposit is sufficient for investors to begin stock trading, as both real and CFD stocks on eToro can be traded fractionally, with a minimum trade amount of $10.
Are there cheap stocks on eToro?
eToro offers publicly stocks which market value is below $5 per share.
Publicly listed stocks are low priced when their market value is below $5 per share, or when their market value is less than the real value of the stock.
On eToro the word “Cheap” when referring to the stock market is a very broad term. If eToro allows traders to buy a publicly listed stock worth $100, and its price suddently drops to $95 due to market reasons, that stock might be considered cheap to buy at that specific moment because it may be $5 cheaper compared to its true value.
Stock traders focused on small-cap stocks use the word “cheap” to refer to “penny stocks”. Penny Stocks are stocks which value is is below $5 per share. On eToro you can only trade publicly listed low-priced stocks, as OTC stocks are not available to buy on their platform.
Examples of cheap stocks you can find on eToro are listed below:
- Agenus Inc
- Airthings ASA
- Ambev ADR
- Heidelberger Druckmaschinen
- Accsys Technologies PLC
Low-priced stocks on eToro tend to be very volatile, as traders and investors can easily open and close large-volume positions. Another risk associated with trading cheap stocks on eToro is low liquidity, which can lead to slippage when buying or selling stocks. Low liquidity may also result in the inability to execute trades due to a lack of counterparties.
Are Cheap Stocks safe on eToro?
Cheap stocks on eToro are safe to invest into because they are publicly listed stocks and not scams occurring on the OTC Market. However, cheap eToro stocks hold intrinsic investment risks as they may lose value, and their low price means that the investor can lose money faster than other stocks.
The most important feature of low-priced stocks on eToro is that eToro is not an OTC stockbroker and does not offer OTC stocks. OTC stocks such as Pink Sheet are not monitored nor regulated by any market exchange. Publicly listed stocks on established stock exchanges like NYSE or NASDAQ have to follow transparency and financial rules, meaning have to take accountability of their malpractices.
This means that whether you use eToro to invest in 1 Amazon share, or in 1 low-priced stock, you can be sure that both are subjected to the same treatment, rules and monitoring by the stock exchange they are listed into.
Investing in low-priced stocks on eToro can be dangerous as investors can buy large amounts of cheap stocks with a very small investment, so even a small change in price may generate a large loss. Cheap stocks investing on eToro is not recommend to casual traders or beginners.
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
Trading history presented is less than 5 complete years and may not suffice as basis for investment decision. This communication is intended for information and educational purposes only and should not be considered investment advice or investment recommendation. Past performance is not an indication of future results.
Copy Trading does not amount to investment advice. The value of your investments may go up or down. Your capital is at risk.
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eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.