eToro is a well-known Israeli fintech company and a social trading broker, established in 2007.
Is eToro right for you?
eToro serves UK clients through a unit regulated by the Financial Conduct Authority (FCA) and Australians through an Australian Securities and Investment Commission (ASIC) regulated entity. All other customers are served by a Cypriot unit that is regulated by the Cyprus Securities and Exchange Commission (CySEC).
eToro is not listed on any stock exchange, does not disclose its annual report on its website and does not have a bank parent.
eToro is considered safe because its UK and Australian arms are regulated by top-tier financial authorities and it is a well-known fintech company.
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% 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.
eToro pros and cons
eToro offers commission-free stock trading. Account opening is fast and seamless. It has innovative features like social trading, which lets you copy the strategies of other traders.
On the negative side, eToro's non-trading fees are high as there are withdrawal and inactivity fees. Money withdrawals can be slow and USD is the only currency you can hold your cash in. Lastly, it's difficult to contact the customer support.
Pros Cons
• Free stock and ETF trading • High non-trading fees
• Seamless account opening • Only one account base currency
• Social trading experience • Customer support could be improved
eToro trading fees
Is Etoro worth it? eToro trading fees are low.
We know it's hard to compare trading fees for CFD brokers. So how did we approach the problem of making their fees clear and comparable? We compare brokers by calculating all the fees of a typical trade for selected products.
We have chosen popular instruments within each asset class:
Stock index CFDs: SPX and EUSTX50
Stock CFDs: Apple and Vodafone
Forex: EURUSD, GBPUSD, AUDUSD, EURCHF and EURGBP
A typical trade means buying a leveraged position, holding it for one week and then selling. For the volume, we chose a $2,000 position for the stock index and stock CFDs and $20,000 for the forex transactions. The leverage we used is:
20:1 for stock index CFDs
5:1 for stock CFDs
30:1 for forex
These catch-all benchmark fees include spreads, commissions and financing costs for all brokers. Let's see the verdict for eToro fees.
Stock fees and ETF fees
eToro offers zero-commission real stock trading. Since May 2020, this is valid for all countries, but clients from Australia can only trade US stocks commission-free. Note that with the free feature, you're buying the real stock, not a CFD product and you cannot use leverage. eToro used to be primarily a CFD broker and they let you trade stocks and ETFs as CFDs, too, if you set the leverage to greater than one. For this CFD product, eToro charges low fees, i.e. the spread (the difference between the ask and the bid prices) is low.
Non-trading fees
eToro has average non-trading fees, as it charges $10 per month after one year of inactivity, but simply logging into your account counts as an activity. The withdrawal fee has been recently lowered to $5.
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