Is eToro a Market Maker Broker?

In this short guide we will focus on a key question that many traders often ask themselves: Is eToro a Market Maker broker?

For the answer to this question and much more information on the execution style of eToro and how it can work for you, keep reading below and we will provide all the information you need.

Is eToro a Market Maker broker?

eToro is a hybrid Market Maker broker, and Straight Through Processing (STP) broker. This means they execute some trades as a market maker, and some using STP execution depending on the assets and how they want to manage the trades.

On CFD positions, it is most likely that eToro will act as a market maker due to the nature of the assets. Meanwhile, trading real assets which are also offered by eToro, it is more likely they will act as an STP broker.

The best way that you can get to know more about this order execution management and how it works for you is to open an eToro demo account to gain some realistic experience in a risk-free way.

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(79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money)

eToro Market Maker and STP execution: How does it work?

Taking a deeper look at how these two execution methods work at eToro we need to take a look at the official eToro (EU) Terms and Conditions.

According to these T&Cs, eToro interchanges its execution methods so that you, the customer, can achieve the best possible financial result whether that be in terms of costs, or raw execution capability.

In fact, in every case, eToro must act in the best interest of the trader when acting as a market maker broker too. This cannot cause any conflict of interest which may be harmful to you as a trader. With that said, market makers operate their own internal market, and act as a dealing desk which means they will be the counterpart to your trade.

In an STP role though, brokers have no dealing desk and so, you will have direct access to the market through this method which can lead to improved pricing and more efficient execution in many situations.

At eToro, the broker will aggregate similar orders to form one large order before transferring it to one of their top-tier liquidity providers. The size of the broker and volume of trades they process makes this possible in a very short space of time.

eToro Account Execution Methods

You will find only one account type available at eToro and therefore, the execution method that is employed solely depends on the trades you make and how eToro decides they want to execute them.

Again, a very effective way to get a clear picture of how this works is to open a free demo account and try out the broker for yourself.

Pros and cons of the eToro execution method

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Closing Remarks on the eToro execution method

eToro is one of the most respected, and well-regulated brokers in the entire industry. This means you do not have to worry at all about any untoward actions or manipulation from them even when they are executing as a market maker. Their market maker model is in line with the rest of the major brokers and completely transparent and trustworthy.

At the same time, the STP execution offered by the broker is some of the very best around. This is thanks to many factors including the top-tier liquidity providers they have in place.

Ultimately, eToro facilitates you to trade in a flexible manner often utilizing their STP model when you trade real stocks and ETFs. Through aggregating these orders they can also ensure the best possible prices for you and almost no costs in the majority of operations.

As you would expect with such a major broker, they also provide great liquidity and are typically able to execute trades in an extremely quick fashion.

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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. 79% 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. Trading history presented is less than 5 complete years and may not suffice as basis for investment decision.

Copy trading is a portfolio management service, provided by eToro (Europe) Ltd., which is authorised and regulated by the Cyprus Securities and Exchange Commission.

Cryptoasset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

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.