eToro Review: Pros and Cons Uncovered 2023

In this eToro review, you will find the results of much dedicated time spent by InvestinGoal’s team of experts studying the quality of the broker.

We can round-up the main eToro features in the following way:

• Great Copy and Social Trading service
• Zero commissions on stocks and ETFs if bought as real
• Good crypto investing service
• Unlimited demo account offered
• Minimum deposit from just $50 depending on the country

What Are eToro Main Highlights?

When completely inexperienced friends and relatives ask me which platform they could use to invest and trade, my answer is usually eToro. Copy trading is definitely a tool that can help, as long as you understand the risks. Then there are many investment opportunities, including in innovative sectors such as crypto, and zero-commission stocks. Overall, it is a very interesting investment portal, although it is a bit more expensive than average.

Filippo Ucchino

Co-Founder - CEO - Broker Expert

What Is Our Opinion On eToro?

eToro is well-known as one of the top brokers in the world, particularly for those interested in social and copy trading. Although the spreads can be higher, they have an ideal first broker choice for many new traders. They also prohibit scalping, hedging, spread betting, and EA, which could be unsuitable for some day traders.

After analysing and testing the broker with the live account, we think eToro possesses a very intuitive and user-friendly trading platform for every category of trader. However, we noticed that eToro’s CFD spreads are relatively high. Also, upon reading the T&Cs, it appears that eToro prohibits scalping and hedging on its platform, so traders using these trading techniques should look elsewhere.

For all other traders, however, eToro offers an excellent range of assets and markets, including commission-free stock trading (when purchased as real) and an excellent cryptocurrency investment service (also available as real).

We were pleased that the demo account offered by eToro does not expire and offers $100’000 virtual money to try the service. Additionally, eToro can edit the virtual currency amount on request.

eToro Overview & Key Features

Copy and Social Trading: After trying eToro, we can confidently say that the broker is among the best (if not the best) for copy and social trading. On the platform, you can find over 100000 traders to copy and learn from. We also think the social trading service is excellent, allowing you to interact with other traders and stay informed about market news.

Stock investing: we think that eToro offers an excellent stockbroking service as traders can choose to speculate on the stock market by using CFDs, or they can choose to invest in them by buying the underlying asset. We tried to buy stocks with a small budget of $100, and it worked great as we bought ten stocks for $10 each, thanks to the low minimum fractional amount. Also, eToro doesn’t charge any commission when buying the underlying asset (other commissions may apply).

CFD trading: the eToro CFD trading service is solid, but it’s nothing special as it is in line with other brokers in the industry. The commissions are, in fact, generally high compared to other brokers. For instance, forex spreads start from 1 pip, while most brokers nowadays offer floating spreads ranging from 0.6 to 0.8 pips. eToro offers CFD trading on markets such as forex, commodities, indices, securities and cryptocurrencies.

Cryptocurrencies: although eToro is not a pure crypto exchange, we think it still offers a good crypto investing service. Traders can invest in over 70 cryptocurrencies buying the underlying asset or as CFD. Additionally, traders can engage in CFD trading on over 80 crypto-cross assets. However, one downside we have found is the high crypto fees set at 1%.

eToro Money wallet: the eToro money wallet is quite convenient for making withdrawals faster and removing conversion fees from deposits. However, we think that is all it has to offer: even though it can be used to store and receive cryptocurrencies, the fees are high, and the limitations are pretty restrictive.

What you can’t do on the eToro platform: on the eToro platform, you are not allowed to perform any scalping or hedging trades. Plus, eToro does not permit traders to use AI, API or EA for automated trading. There is also no spread betting account offered at the broker.

If these characteristics do not meet your interest and you want to expand your research while evaluating some options similar to this broker, you can consult the alternatives to eToro.

Pros

• A great selection of cryptoassets are available with over 90 to choose from
• You can trade the real crypto not only as a CFD
• Fractional trading is available that makes it very accessible
• The eToro Wallet is a great proprietary storage solution.

Cons

• The eToro crypto spread can be high particularly on more volatile assets
• Less cryptos are available here than you will find on a traditional exchange

Is eToro regulated and legit?

eToro is a well-regulated broker which has been operating in the business for over 15 years. They provide top-security with segregated bank accounts, risk tools like Negative Balance Protection and top regulators which guarantee a trustworthy environment for all clients.

Regulated: eToro is an ESMA compliant broker as it is regulated by CySEC. Moreover, eToro is regulated by the FCA in the UK, by ASIC in Australia, by FinCEN in the USA and it holds a FSAS license in the Seychelles.If you are a US resident who wants to trade with eToro, then check out our dedicated eToro USA review.

Reliability: Operating since 2007, they have a physical presence in many countries such as in Cyprus (Limassol), in the UK (London), in the USA (Hoboken, NJ), in Australia (Sydney), in China (Shanghai).

Money protection: eToro keeps your deposited funds in segregated accounts within top-tier banks such as Barclays and Goldman Sachs. They also have Negative Balance Protection in place, this means that you can’t lose more than the balance of funds in your account. Additionally, for EU retail clients there is the ICF compensation fund of 20.000 EUR.

In Which Countries is eToro not Available?

eToro accepts customers from all over the world, except from:

What Are eToro Account Types?

eToro offers a small range of account types compared to other brokers. Among these you can find the eToro demo account that allows you to try the eToro platform with virtual money before depositing real money. This can be opened providing eToro with an username, an email address, and a telephone number.

*Spreads on the Islamic account may differ from the Standard one.

Professional account: Note that in order to become a professional trader, you should open a standard account first and then apply for the professional status on the eToro website.

You will need to satisfy at least two of the following requirements:

• Large Trade Volume: you must have made at least 10 forex transactions with a minimum total value of $500.000
• Financial Portfolio: This should exceed $500.000. Your private assets are not counted toward this value. Just the balance and open positions you have.
• Professional Experience: You must have at least one year of working experience within the financial field.

Corporate account: the eToro corporate account is tailored to businesses that wish to invest their company money, or to protect their funds from inflation by investing them long-term.

Islamic account: To open an Islamic Account with eToro you should follow these steps: open a Standard live account, deposit the amount requested ($1000) and then get in touch with eToro customer service.

Account base currency: most brokers let you choose the account base currency when opening an account. This isn’t the case with eToro as they only offer the USD as account currency. This means that if you deposit or withdraw any other currency besides the USD, or trade symbols which currency is not the USD, eToro will charge a conversion fee.

How Can You Deposit And Withdraw With eToro?

eToro deposit: the minimum deposit at eToro depends on the country of residence of the trader, and the account type chosen. In most cases, the minimum deposit is $200, however it starts from $10 in some countries.

eToro doesn’t charge commissions on deposits, and offers a wide range of deposit methods. Even though the speed and payment methods availability depends from country to country, the deposit processing is overall relatively slow compared to other brokers.

eToro withdrawal: the eToro minimum withdrawal sits at $30. This means traders may not be able to withdraw less than $30 at any given time.

eToro charges a fixed $5 fee for withdrawals, which is quite convenient when withdrawing large amounts of money, but not quite as convenient for new traders who want to withdraw smaller amounts. Withdrawals are also quite slow but solid, however they can be made faster by using the eToro Money wallet. Keep in mind that in order to withdraw the money you have to verify the eToro account first, and use the same methods you have used to fund your trading account.

Conversion fees: with an eToro Money Account, you won’t get charged any conversion fees. In other cases, they may be applied if you make transactions in currencies other than the USD. For such transactions, the commission is 50 pips via wire transfer regardless of currency. For credit cards, debit cards and eWallet the commissions change depending on the currency used:

• EUR: 250 pips
• GBP: 50 pips
• AUD: 100 pips

How Much Are Spreads And Fees With eToro?

Dividend withholding: eToro charges a withholding tax on dividends which depends on the stock. For US stocks eToro withholds 30% of the dividend, but for other stocks the eToro dividend withholding ranges from 0% to 35%.

Overnight Fee: eToro charges overnight fees on every CFD trade. This fee is a common practice among all forex and CFD providers, so it’s not a downside of the broker. Matter of fact, eToro does not charge overnight fees when buying the underlying asset on the stock and crypto market.

Inactivity Fee: eToro does charge an inactivity fee of $10 per month. Even though this fee is quite high, you can avoid it by simply logging in at least once every 12 months. If there are not enough funds in your account to pay the inactivity fee, eToro reserves the right to close your account.

Which Markets Does eToro Offer?

eToro allows trading numerous markets such as forex, indices, commodities, stocks, ETFs and crypto.

These markets can be traded as CFD, but futures and options are also available depending on the market and where the trader is based:

• eToro Futures are available on some indices and on some commodities
• eToro Options are available to customers of eToro USA

If you’re not interested about derivatives, you can trade Stocks and Cryptocurrencies as real.

How Are Execution, Leverage And Position Sizing With eToro?

Execution: eToro is an STP/NDD broker. This straight through processing order method with No Dealing Desk appeals to many traders who are more experienced and can provide a range of positives when trading forex and other markets.

Leverage: The leverage provided by eToro depends on the account types and on the asset. The leverage on forex goes up to 30:1 for retail clients and up to 400:1 for professional clients.

Position sizing: the minimum lot size allowed by eToro ranges from $10 to $1000 depending on the asset and on the market.

Fractional stocks: eToro allows traders to invest in fractions of stocks. The minimum fractional amount is $10, which is great when investing in high-value stocks. However, if a stock is listed for less than that amount, you have to buy multiple stocks of the same company until reaching the minimum value of $10, which may lead to high risk when investing in low-priced securities.

Fractional cryptocurrencies: eToro allows traders to invest in cryptocurrencies starting from $10. This amount is a standard among the industry. This means that you can buy $10 worth of Bitcoin, even if the value of 1 bitcoin is worth more than that.

What Platforms Does eToro Offer?

eToro proprietary platform: the eToro platform is user friendly as it’s quite easy to use and navigate. It is available as both webtrader (i.e. you can use it on the browser), and mobile. The mobile version is very convenient for keeping track of one’s portfolio and seizing trading opportunities while away from the PC, but it has flaws in the market analysis side.

Risk Management: the eToro platform offers industry standard risk management orders such as stop losses, take profit, limit orders, and trailing stops. The broker will also initiate margin calls to alert you when your equity is at a certain level against your open positions.

Copy Trading: the eToro platform excels at copy trading, which is a service that allows you to copy other eToro traders or invest your money in CopyPortfolios that work similar to modern roboadvisors.

Social Trading: on the eToro platform you can check other traders’ profiles, and see how they are investing their money as well as their profitability. Additionally, you can also post, comment and like their posts. This feature works great especially for beginners, as they can follow and interact with expert and professional traders to speed up their learning curve. For more info check our etoro guide.

Real stocks: eToro in most countries allows you to invest in real stock trading. This can be a great tool for long term investment as eToro won’t charge overnight fees, and won’t charge commissions when buying or selling securities.

Real cryptos: on eToro you can buy the underlying crypto asset starting from $10. The cryptocurrencies, however, cannot be transferred to other exchanges, nor other cryptocurrencies can be transferred into the eToro platform. The only way to transfer them outside eToro, is to send them to the eToro Money wallet.

eToro Money: The eToro Money wallet is a service available to UK and EU traders only. With this service, you won’t be charged conversion fees on deposits, withdrawals will be instant, and you can also use it to store your cryptocurrencies. The eToro Money wallet is available to traders that have reached the silver tier in the eToro Club.

eToro Club: The eToro Club is a premium program that gives you access to certain perks, like reduction in fees and spreads, depending on your account level.

How Is eToro Customer Service?

Ways of contacting: if you haven’t opened an account, you can contact eToro via email and live chat if you need faster help. Moreover, once you have funded an account, you will be assigned an account manager who will reach out to you and whom you can contact if needed.

Languages: The eToro website and support is available in as many as 19 different languages. However, the live chat is only available in English, German, and Chinese.

Does eToro Have Research And Education Services?

Market Research: eToro provides comprehensive market research and daily updates, freely available for download. An extensive economic calendar is also available to keep you in the know about all the current events that may impact trading.

Blog: eToro has a blog updated daily, which contains all types of fintech and market news, including eToro updates.

Video Tutorial: Several step-by-step tutorials are provided to clients, in particular beginners who need help.

Webinars: Clients can also join webinars live or online for in-depth market and financial reviews.

Podcasts: This format has made its way into eToro’s Academy section. Anyone interested in trading can listen to the Podcasts offered.

Fintech guides: A very stocked section of guides is there to help eToro’s traders. General fintech content is provided, but also specific topics such as Crypto and how to trade on eToro.

What do Users Think About eToro?

eToro vs other brokerage firms

If you’re not sure whether to choose eToro or another broker, here’s a selection of articles comparing eToro to its main competitors:

• eToro vs DEGIRO
• eToro vs IG Markets
• eToro vs Pepperstone
• eToro vs Plus500
• eToro vs Trading 212
• eToro vs ZuluTrade

FAQs

What is the minimum deposit for eToro?

In most cases the minimum deposit with eToro is $200. This minimum deposit increases to $1000 if you are trading through a rollover-free account since your fees are reduced on this account type.

What happens if eToro goes bust?

eToro is a very secure broker. If they did though, you are very well protected through the fact that your funds are always held in segregated accounts at top-tier banks. This means in the event of bankruptcy your funds would be safe and untouched.

Is eToro trustworthy?

eToro is a very trustworthy broker. This trust can be showcased through the extensive top-tier regulation they have in place. They are very well-regulated through CySEC (109/10), FCA (583263) and ASIC (491139) for your protection.

Is eToro safe?

eToro is considered to be a safe broker thanks to its good regulatory environment, and thanks to the fact they use segregated bank accounts to hold clients’ funds.

Is eToro good for beginners?

eToro is excellent for beginners. They have a very user-friendly trading platform and also cater for social and copy trading which is very popular among new traders.

Is eToro illegal?

eToro is not illegal. In fact eToro accepts clients from over 190 countries. There are a few exceptions though and these can be found in the not accepted clients section of our review above.

Is eToro legal in Australia?

eToro is completely legal in Australia. In fact they are also regulated by ASIC in Australia under the number 491139 which you can check.

Does eToro report to the IRS?

eToro won’t file your taxes unless the broker is physically present in your country. You will be responsible for your own tax filing. If you need to, you can download the history of your trades for help from your professional tax advisor to file your taxes. We always recommend that you consult a tax professional on tax related issues.

How does eToro pay dividends?

Both shares and ETFs held through eToro can pay dividends into your account. These dividends can be paid if you are holding the assets as real shares or as CFDs.