Stocks trading is, of course, one of the most popular assets and markets which many traders select.
Nowadays a lot of investors want to know more about cheap high potential stocks.
But first, if you’re planning to invest in them with eToro, you must be aware of one thing:
eToro DOES NOT offer Penny Stocks since they are an OTC asset and the broker only offers publicly listed shares within its platform. What eToro does offer thanks to their wide shares offering, are publicly listed stocks. Among them, it is possible to find a number of low-cost shares below the $5 market price.
And with this post we will guide you through the basics on stock trading as an eToro user, and how you can find them.
For a more detailed guide on what you can do with this broker you can have a look at our in depth eToro review.
Table of contents
Stocks trading on eToro: how does it work?
As mentioned, eToro does offer extensive choices when it comes to stock trading. Unlike many other top forex platforms, eToro stock trading is offered as both CFDs and as real stockbroking where you also own the underlying asset.
Whether you are trading on a demo account, or a live account available from $200, the choice will be up to you.
If you are trading the eToro stocks as real and with ownership, then this will be in a circumstance where no leverage has been activated and you will be trading on a 1:1 basis long position.
With this kind of eToro stock portfolio, you would not be charged any markups or overnight fees as the investment type is different given that you would completely own the underlying asset without leverage.
This can represent a good deal if you want to get into stock trading through eToro.
Are there “cheap stocks” on eToro?
Cheap in the stock market is a very broad term.
If a stock is usually worth $1000, and it suddently drops to $500 for market reasons, that stock might be considered cheap to buy at that specific moment.
However, when we talk about “cheap stocks” we mean something very specific:
A stock is considered low priced when its market value is below $5 per share.
Here you can see the full list of stocks available on eToro.
Below instead you can see directly some examples of cheap stocks you can find on eToro, with share price below $5:
- Athersys Inc – NASDAQ
- Agenus Inc – NASDAQ
- Adamis Pharmaceuticals Corp – NASDAQ
- BBVA – Madrid
- Heidelberger Druckmaschinen – Frankfurt
Due to this low price, sometimes being as low as 0,10 US pennies, this kind of asset is usually very volatile since traders and investors can open and close large volume positions with ease.
On the other hand, low prices can also be correlated with low risk in many cases due to the reduced investment amount. This often leads to both new and experienced traders seeing a lot of value and enjoyment from trading low cost shares.
Are Cheap Stocks safe on eToro?
This is an interesting question which you may be uncertain of, particularly as a new trader if that is the case (“is eToro safe?” might be another one).
Cheap stocks on eToro are extremely safe to invest into because, as we have already mentioned above, eToro is not an OTC stockbroker and does not offer OTC stocks.
This means that whether you invest thousands of USD in 1 Amazon share, or $5 in a promising stock, you can be sure that both are subjected to the same treatment, rules and monitoring by the stock exchange they are listed into.
That’s why, objectively speaking, the intrinsic risks in these stocks are the same as any other stock in that they may lose value, and this is the main issue when investing in them: low priced stocks are a risky investment.
Traders can buy large amounts of these with a relatively small investment, and the crowd trading these assets make them liquid and volatile at times. This may in fact translate in large returns, but also in horrific losses which is the reason why we do not recommend this investment 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. 75% 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.
Past performance is not an indication of future results.
Cryptoassets are volatile instruments which can fluctuate widely in a very short timeframe and therefore are not appropriate for all investors. Other than via CFDs, trading cryptoassets is unregulated and therefore is not supervised by any EU regulatory framework.
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.