What is Etoro and how does it work?
Etoro is a trading platform that was founded in 2007 by three entreprenuers who had a simple mission: "make trading accessible to anyone, anywhere, and reduce dependency on traditional financial institutions. The platform was originally developed to trade the foreign exchange market, but has since evolved into a much more well rounded platform offering stocks, ETFs, and crypto. Please note that Etoro is available outside of the US, but our review is based on the US version.
Etoro works similarly to other trading platforms by offering commission free trading on stocks and ETFs. The platform has reasonable research and analysis tools to help you make informed decisions and execute trades. However, what really makes Etoro stand out is their emphasis on a social trading community. The platform offers several features that bring traders together which we will discuss in more detail below.
A Quick Summary
Personal (retail) account
Key
FeaturesTrading platform
Copy top investors
Popular investor program
Social news feed
Cost
$0 commissions on Stocks, ETFs, and options
Account Types
Etoro primarily offers one main account type if you are an individual: a personal retail account. The account simply allows you to deposit funds and trade all available securities on the platform.
Key Features
Trading Platform
Etoro's trading platform can be accessed via a web or mobile based version. There is not currently a desktop version of the platform. The platform is easy to use and is farily intuitive. It does not have the most advanced features, but instead sticks to the basics and includes:
Virtual portfolio with $100k in virtual funds to practice and test new strategies
Research tab: aggregates knowledge of investors and experts from leading financial institutions
Stop loss and take profit: set predetermined price points to close out profit and losses automatically
Pro charts: analysis tool to compare charts with different instruments and timeframes
Copy Top Investors
The "copy top investors" feature is exactly what is sounds like. Etoro allows you to quite literally copy the trades of the top investors on the platform. This can be advantageuos if you are a beginner, or if you lack the time to do your own analysis. This is how it works. Choose a trader on the platform that aligns with your goals. Set an amount that you want to trade. Hit the copy button and Etoro will automatically copy your chosen traders positions.
There is no additional fees for using this features and you can choose to copy anywhere from 1 to 100 traders simultaneously. You can also try copy trading using your demo account and virtual funds so you can see how it works without risking real funds. Etoro does note that you need a $200 minimum to start using this feature.
Popular Investor Program
The popular investor program is the flip side to the "copy top investors" features. This means that other investors on the platform can copy your trades, and in return you earn a fixed payment per copier that varies in value depending upon what level you reach. Reward tiers are $2 per copier, $250 a month, and 2% of assets under copy.
Anyone can sign up for the program, but Etoro notes you will have to build a following by being active in the community and by meeting the following qualifications:
Have a fully verified profile including: full name, bio, high res profile picture
Minimum equity of $100 investing and a maximum risk score of 7
Investment activity requirements: minimum 2 months of investing, minimum of 1 open position, opened or closed a position in last 30 days, not copying other users or using smart portfolios
Social News Feed
The final social feature of Etoro is the social news feed. The best way to think of this feature is like social media for a trading platform. Similar to other social networks, you can post updates, share posts, comment, and more.
Tradeable Securities
Etoro currently offers the following tradeable assets:
Stocks: you can trade a selection of 2,095 stocks.
ETFs: you can trade a selection of 263 ETFs.
Crypto: you can trade a selection of 24 cryptocurrencies.
Options
Platform Options
Etoro offers both a mobile and web based version of their trading platform. As of right now, there is not a desktop version of the platform. If you want to access the platform on a laptop or desktop, you are limited to the web based version. Both platforms are easy to use as neither offers features that are above a beginner to intermediate level.
Cost
Stocks, ETFs,
and Options
$0 commissions
$10 to start investing
Customer Support
Etoro's customer support is very thin. You currently only have a couple of options. First, you can use Etoro's online help center to find information on commonly asked questions. Second, you can fill out a customer service request ticket online and wait for an email response from Etoro's customer support team.
Other Details
Smart Portfolios
One other feature that is worth mentioning is the smart portfolios feature. A smart portfolio is a collection of crypto assets bundled together based upon a theme or strategy. Etoro created these portfolios with the idea of being less focused on individual assets, and more focused on the methodology of the portfolio. Etoro does manage the portolio and rebalances the asset allocation within each portfolio so that it stays loyal to its strategy. There is a $500 minimum investment to use this feature.
Advantages of Etoro
The primary advantage of Etoro is the social investment community. Being able to learn from top traders, copy their positions, engage in a trading community, and even be rewarded when other copy your trades are all huge advantages. There is no other trading platform with such a strong emphasis on social community.
Disadvantages of Etoro
The primary disadvantage of Etoro is their poor customer support. You only have two options for customer support when you need help: use the help center on Etoro's website, or submit a customer service request ticket and wait to hear back. Compared to other platforms that offer phone support and live chat, Etoro could use improvement in this area.
Is Etoro Right for you?
Etoro is right for you if:
You want a social trading community above all else
You don't need the most advanced trading platform and are comfortable with basic trading features
You want a user friendly platform on both mobile and web based versions
Alternatives to Consider
Take me to the reviewConsider using IBKR if you want a platform with global markets
Fees
$0 on select assets
Minimum Deposit
$0
Take me to the reviewConsider using TradeStation if want an advanced platform
Fees
$0 on select assets
Minimum Deposit
$0
Take me to the reviewConsider using Etrade if you want a well balanced platform
Fees
$0 on select assets
Minimum Deposit
$0
