Is eToro a Market Maker Broker?

logomark Filippo Ucchino calendar Last Updated: November 2021 timer 5 min read
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So, you are trading or thinking about trading with eToro?

Excellent. They are one of the largest and most respected brokers in the industry.

Still, you may have several questions about them. Our eToro review goes into every aspect of the broker in detail. Here though we will focus on one key question that often pops up. Is eToro a Market Maker?

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.

Table of contents

Is eToro a Market Maker broker?

eToro is a Market Market broker with STP features. This means that depending on the situation, and the asset you are trading, eToro has flexibility in deciding how they will act in executing the trade.

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.

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.

Account Vs Account ACCOUNT
CFD Assets Market Maker / STP
Real Cryptocurrencies Market Maker / STP
Real Stocks Market Maker / STP
Spread Forex from 1 pip
Demo Yes
Minimum Deposit $200

Pros and cons of the eToro execution method

Pros

  • Fast execution speeds are provided for and with no liquidity issues
  • The demo account perfectly replicates the execution styles offered
  • Typically commission-free trading with no added costs besides spread
  • A huge variety of CFDs are offered by the broker
  • eToro STP costs are extremely low, and the liquidity remains excellent

Cons

  • Prices may be slightly higher under market maker execution
  • The choice of execution method used is not up to you

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.

If you have any concerns or need more information, you will definitely find our post on Why eToro is a safe broker to be very helpful.

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.

FAQs

What type of broker is eToro?

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.

Is eToro a real broker?

Absolutely. They are one of the biggest in the industry. eToro was founded in 2006 in Tel Aviv, Israel. Since then, thanks to its revolutionary Social Trading service, it has managed to expand all over the world with over 13 million customers worldwide and is one of the most well-regulated and trusted major brokers in the sector.

How does eToro make money?

eToro earns money mainly through spreads, losing trades, and non-trading commissions. For detailed information, check our in-depth article on how eToro makes money.


About the Author

Filippo Ucchino

Co-Founder - CEO - Broker Expert
Filippo is the co-founder and CEO of InvestinGoal.com. He has 15 years of experience in the financial sector and forex in particular. He started his career as a forex trader in 2005 and then became interested in the whole fintech and crypto sector.
Over this time, he has developed an almost scientific approach to the analysis of brokers, their services, and offerings. In addition, he is an expert in Compliance and Security Policies for consumers protection in this sector.
With InvestinGoal, Filippo’s goal is to bring as much clarity as possible to help users navigate the world of online trading, forex, and cryptocurrencies.

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