eToro is one of the world’s leading platform with around 13 millions users registered worldwide. The scale of operations and the long-established customer’s trust of a broker are some of the key components to its good reputation, and eToro discloses a great volume of transparent information on its workings, the services it provides and the products it offers. Nevertheless, the amount of information may be overwhelming and you might still be left with some questions, and below you can find some key information on eToro.
(NOTE: Before we continue, we have to give a disclaimer that the trading products offered by the companies listed on this website carry a high level of risk and can result in the loss of all your funds. CFDs are complicated instruments that are never guaranteed to provide you supplemental earnings. In fact, Around 68% of all retail investors experienced a loss while trading CFDs. Make sure to keep this in mind before attempting to use the eToro platform yourself. All the information found on this website is not official trading advice and all practices shown are referenced for the use of the Demo account only.)
Key facts about eToro
eToro is a broker which provides an online platform for trading a great variety of assets, including CFD, real stocks, indices, Exchange Traded Funds, currencies and cryptocurrencies. It also provides several unique innovative features, including social trading, where traders not only share valuable information and news, but can also use options like copy trader and copy portfolio which you can replicate and pursue.
Who is eToro owned by?
eToro is not obliged to disclose information on its ownership as it is a privately owned company, yet the platform tries to maintain maximum transparency towards its users in that aspect too. The platform was founded in 2007 with current headquarters in London. There are a total of 23 investors and the funds originate from several global venture capital entities, including Anthemis Group from the UK, Cubit Investments from Israel, MoneyTime Ventures from the US, Ping An, China and so on. There is no parent bank company covering eToro.
The company is led by one of its key founders, Yoni Assia, in the position of the CEO, and information on other members of the team can be found on the website.
Is eToro regulated?
Since eToro operates in multiple countries and it is likewise regulated by several financial authorities. These include:
- Financial Conduct Authority (FCA) in the UK
- Cyprus Securities and Exchange Commission (CySEC) in Cyprus
- Australian Securities and Investments Commission (ASIC) in Australia
- and State Authority regulators in the USA, when it concerns cryptocurrency assets
How does eToro make money?
There are several sources of income for eToro, all of which are disclosed with transparency despite the platform not being legally obliged to publish its financial statements to the public.
There are various fees the platform charges to its users. These includes primarily
- The bid-ask spreads it applies to each trade opened by its users
- Overnight fees charged as the interest for CFD positions traders hold open overnight and this allows eToro to cover for the associated leverage costs
- Various non-trading fees charged for the services provided on the platform, including withdrawal fees charged when a user wants to withdraw earnings from the account on the platform and transfer them to their bank account/ credit card/ e-wallet etc, and conversion fees, possibly applied when foreign currency is placed onto your account since the platform operates in USD by default
eToro does not charge any management fees to its clients.
Is eToro trustworthy?
Trustworthiness of a platform is build off its reputation as well as the extent to which it is regulated. eToro is a well established platform in the industry with millions of users from all over the world. And as discussed above, eToro is regulated by three authorities, the FCA in the United Kingdom, CySEC in Cyprus and ASIC in Australia.
What is eToro copy?
eToro’s innovative and unique feature is social trading which allows you to copy other traders i.e. their trading choices. This may be a great option for you in case you have a limited amount of time available to invest into researching, staying updated and watching your position, or if you just want diversify your portfolio perhaps. You can also become a Copied trader yourself once you satisfy certain conditions such as trading for at least 2 month and having an acceptable risk score. This will allow you to earn money by providing such a service.
eToro also provides Copy portfolio as one of its financial products. Copy Portfolios are ready-made compositions of various assets that allow for thematic investment, and likewise help you to diversify and spread risks, spend less time re-balancing and surveilling your positions.
Income on eToro
eToro adheres to laws and regulations, hence the profits you make on the platform can also be subject to taxation depending on the country where you are registered in.
Trading in the USA
eToro offers its services worldwide, however unfortunately it is still not available in many countries and the company works continuously to improve that. Due to the specificity of US laws and regulations, the platform became available in the country only in 2018 and it is still in the more or less initial launch phase. Real trading is allowed in most states by now, however many features are disabled and not all markets are available for trading too. eToro is working closely on this process in adherence to juridical restrictions to make the platform more accessible around the globe. eToro USA LLC does not offer CFDs, only real Crypto assets are available.
Hopefully this article answered some principal questions you might have had about the platform.
Please remember that trading with real money involved capital loss risks and should be done with caution and a great amount of preceding practice. Do not underestimate the importance of learning trading theory, underlying basics and key trading strategies, as well as staying updated on market news and trends.
Good luck trading!
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eToro is a multi-asset platform that offers both investing in stocks and crypto assets, 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. 68% 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 authorized and regulated by the Cyprus Securities and Exchange Commission.
Cryptoasset investing is unregulated in some EU countries and the UK. No consumer protection. Your capital is at risk.
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.
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