eToro Review 2024: Pros & Cons

In the dynamic landscape of online trading, eToro has emerged as a game-changer, revolutionizing accessibility and introducing a social layer to financial markets. Boasting a user-friendly interface and innovative features like CopyTrader, eToro has garnered attention for its inclusive approach, welcoming traders of all levels.

As we embark on this etoro review, our focus is to unravel the platform's simplicity, explore its unique features, and provide insights into both the advantages and potential drawbacks that traders may encounter. Join us on this journey to decode eToro, offering a comprehensive guide for those navigating the complexities of online trading.

What is eToro?

eToro stands as one of the largest online brokers globally, facilitating millions of users annually in trading a diverse array of assets, CFDs, and ETFs. Established in 2007, this multi-asset platform has earned a stellar reputation, boasting millions of active traders worldwide and holding authorization from top-tier regulators, including the FCA and CySEC.

Recognized for its comprehensive social trading platform, eToro has become a go-to choice for investors seeking a user-friendly experience.

Despite offering commission-free investing on both UK and international stocks, it's essential to note potential charges, as outlined in our fees section.

With a notable News Feed and CopyTrader features, eToro not only excels in providing a top-rated trading app for 0% commission on stocks but also encourages a community-driven approach, allowing users to observe and replicate the strategies of fellow traders.

eToro Fees Overview:

eToro positions itself as a platform with no platform fees and zero trading fees for various assets, including UK Shares, US Stocks, International Shares, and Funds/ETFs. However, certain charges do apply, and it's crucial to consider them for a comprehensive evaluation.

General Fees:

• Platform Fee: £0
• Trading Fees: £0 for UK Shares, US Stocks, International Shares, and Funds/ETFs.
• Foreign Exchange (FX) Fee: 0.5%
• Regular Investing: Not Available
• Withdrawal/Deposit Fee: Withdrawal: $5
• Inactivity Fee: $10/month after 12 months of no login

Fee Ratings and Insights:

• Cost Rating: eToro earns a rating of 3 for competitive spread quotes and low non-trading fees.
• Day Trading Considerations: Not recommended for tight spreads in day trading; major currency pairs have around 1 pip.
• Commission-Free Stock Access: Traders enjoy commission-free access to stocks, allowing for bulk or fractional share purchases starting from $10.

eToro Trading Fees:

• Cryptocurrencies: Fee: 1%
• Commodities: Fee: From 2 pips
• Currencies: Fee: From 1 pip
• Indices: Fee: From 0.75 points
• Stocks and ETF CFDs: Fee: 0.15%

Additional Fee Details:

• Crypto Transactions: Competitive flat 1% fee added to the market bid/ask price.
• Non-Trading Fees: Currency conversion fees apply for non-USD currencies. $10/month inactivity fee after 12 months.

Key Fee Considerations:

1. Commission-Free Trades: eToro offers commission-free stock trades, making it budget-friendly for regular investors.
2. Withdrawal Fee: Users face a $5 withdrawal fee.
3. Inactivity Fee: After 12 months of inactivity, a $10/month fee is charged.
4. FX Fee: A 0.5% foreign exchange fee applies, but discounts are available through eToro's membership tiers.
5. Additional Trading Fees: Cryptocurrency trading incurs a 1% fee, while commodities, currencies, indices, and stock/ETF CFDs have varying fees.
6. Exceptions to Zero Commission: Zero commission doesn't extend to leveraged trades, shorts, or stock CFDs.
7. Minimum Deposit: Users need to deposit a minimum of $50 to start trading on eToro.

eToro Safety Snapshot:

eToro ensures high safety and security, backed by FCA regulation and full FSCS protection for deposits up to £85,000. Advanced security features, including biometric logins and two-factor authentication, fortify user accounts.

While private, eToro's commitment to regulatory compliance and robust security measures makes it a safe haven for traders. Client funds are segregated in tier-1 banks, ensuring they are not used for operational purposes. Investor insurance in multiple denominations adds an extra layer of protection in case of financial challenges.

Overall, eToro's safety measures, regulatory adherence, and user-focused protections make it a reliable choice for online trading.

Unlocking eToro's Key Features:

1. Smart Portfolios (Formerly Copy Portfolios): Investors can diversify with ease by investing in themed portfolios that track specific investing themes or strategies.
2. Copytrader: Access thousands of investors with unique strategies and risk levels. Copy trades from one or build a team of up to 100 traders simultaneously.
3. Demo Trading Account: Practice trading with a virtual account worth up to $100,000 USD, ideal for gaining experience before using real money.
4. CFD Trading: Trade fractions of shares and leverage trades up to 30x for increased flexibility.
5. Fractional Shares: Invest in fractions of shares, making it more accessible to expensive stocks like Amazon, Apple, and Tesla.
6. Leveraged Trading: Leverage trades up to 30x, amplifying trading potential.
7. In-depth Research: Gain insights and analysis from leading experts to inform your investment decisions.
8. Professional Charts: Utilize tools for comparing data from different financial instruments, enhancing analytical capabilities.
9. Stop-loss and Take-profit Alerts: Set opening or closing points for positions to maximize profits and mitigate losses.
10. Offline Trading: Place trades even during server issues or scheduled maintenance.
11. Free Investment Insurance: Protection against loss in the event of eToro's insolvency or misconduct.

eToro's Rich Toolkit:

eToro provides a comprehensive toolkit for traders, including interactive charting tools and various trading order types like stop loss and trailing stop for enhanced control. In the realm of research, users access ample information on stocks and ETFs, coupled with real-time news and company announcements.

The platform's social features, such as the News Feed and social trading, facilitate interaction and idea sharing among traders. With a virtual portfolio offering a demo account worth $100,000, eToro caters to new investors seeking a risk-free environment to practice before venturing into live trading.

Navigating eToro's User-Friendly Realm:

Mobile and Desktop Accessibility:

• With a versatile offering, eToro caters to both mobile and desktop users, earning a solid ease of use score.
• Users can access the platform through web browsers (Google Chrome, Microsoft Edge, Mozilla Firefox, Safari) and dedicated mobile apps for both iOS and Android devices.

Customer Service and UI/UX:

• Customer service is readily available through live chat, email, and a community forum.
• The overall User Interface (UI) and User Experience (UX) are deemed good, contributing to an enjoyable investing experience.
• The desktop platform is available for those who prefer a non-mobile investing approach.

Mobile App Review:

• eToro's mobile app, available on Android and iOS, mirrors the web platform's great user experience.
• The app, secured with two-factor authentication (2FA) and biometric data options, allows users to manage accounts on the go.
• Key features, including virtual portfolio setup, social feed curation, trade copying, and charting and analysis tools, are seamlessly integrated into the app.

Web Trading Platform:

• eToro's web platform stands out for its user-friendliness, designed to appeal to both new and experienced users.
• The intuitive layout, simple functions, and an easy signup process make it particularly accessible for beginners.
• The provision of a free demo account further enhances the platform's usability, allowing users to familiarize themselves without risking real funds.

Overall, eToro's commitment to user-friendly design across its platforms and accessibility on various devices positions it as a welcoming platform for both novice and seasoned traders.

eToro Through the Lens of Users:

Trustpilot Ratings:

• On Trustpilot , eToro attains an impressive 4.4 out of 5 stars, labeled as "Excellent," based on a substantial pool of over 20,000 reviews.

App Store and Google Play Ratings:

• The eToro app garners positive feedback on both platforms, earning 4.3 out of 5 stars on the App Store from over 8,000 reviews and 4.1 out of 5 stars on Google Play from more than 130,000 reviews (last updated November 2023).

User Perspectives:

• Users find eToro easy to navigate, with a notable highlight on the CopyTrader feature.
• While overall feedback is positive, some 1-star reviews express concerns about high withdrawal fees and less satisfactory customer support.

In essence, eToro receives favorable user ratings across multiple platforms, reflecting user-friendly interfaces and a generally positive user experience. However, as with any platform, individual experiences may vary, with some users expressing concerns about specific aspects such as withdrawal fees and customer support.

Pros of eToro:

• Innovative Social Investing: Copy trades of successful investors with social trading.
• Global Presence: Over 25 million users in 140 countries, including access for U.S. customers.
• Virtual Trading: $100,000 virtual trading account for practice and skill development.
• User-Friendly Setup: Easy-to-use platform suitable for both beginners and experienced traders.
• Commission-Free Trading: No trading fees on a diverse range of assets, with over 3,000 options.
• Social Features: Collaborative features like CopyTrading and News Feed enhance the trading experience.
• Low Investment Threshold: Start investing with as little as $10, making it accessible to all.
• Abundance of Learning Resources: Free demo account and educational materials for informed decision-making.

Cons of eToro:

• Withdrawal Fee: $5 withdrawal fee with each withdrawal.
• No ISA Investment: Absence of the option to invest in an ISA.
• Trading Emphasis: Platform leans more towards trading, potentially less appealing for long-term investors.
• Automatic FX Fee: Currency conversion fee of 0.50% on non-USD deposits.
• Complex Trading Fees: Certain asset classes, like crypto, may have intricate and complex trading fees.
• Inactivity Fee: $10 fee after 12 months of no login.
• Minimum First Deposit: Requires a minimum first deposit of $50.
• Currency Conversion Fee: Additional 0.50% fee for currency conversion.
• Withdrawal Fee: $5 USD withdrawal fee per transaction.
• Customer Support Limitations: Reported issues with customer support quality.
• Limited Service Availability: Availability limited to 46 U.S. states and Washington, D.C., with restrictions in Hawaii, Minnesota, Nevada, and New York.
• No Crypto-to-Crypto Trading: Absence of trading pairs for exchanging one cryptocurrency for another on the platform.

Verdict:

In conclusion, eToro emerges as a popular and versatile trading platform with a unique social trading feature, allowing users to trade a variety of assets without commission. The platform's standout feature is its ability to facilitate social trading, enabling users to replicate the successful trades of experienced investors. Despite offering commission-free trading, eToro imposes various fees that users should be mindful of, distinguishing it from competitors like Trading 212 and Freetrade .

eToro provides access to shares from major global stock exchanges, coupled with robust charting tools suitable for intermediate investors who prefer desktop analysis. The platform's user-friendly interface and copy trading features make it an attractive choice for both beginners and intermediate traders. However, potential downsides include jurisdiction-dependent trading options, limited advanced charting tools for smaller account holders, and withdrawal fees.

For those prioritizing automated features like copy trading and smart portfolios over low spreads and day trading, eToro stands out as a compelling option. It is a well-regulated platform with safety measures in place, offering a diverse asset library to cater to various trading preferences. While eToro has its caveats, its overall high score positions it as an appealing choice for investors seeking a comprehensive and affordable trading experience.

FAQ:

1. Does eToro charge platform fees for trading?

   No, eToro does not charge platform fees. The platform provides commission-free trading for various assets such as UK Shares, US Stocks, International Shares, and Funds/ETFs.

2. Are there trading fees on eToro for UK Shares and US Stocks?

   No, eToro offers zero trading fees for UK Shares and US Stocks, making it an attractive option for traders interested in these assets.

3. What is the Foreign Exchange (FX) fee on eToro?

   eToro imposes a 0.5% FX fee for currency conversions. Traders should be aware of this fee when engaging in transactions involving different currencies.

4. Can I invest in ISAs (Individual Savings Accounts) on eToro?

   eToro does not support ISAs. Traders should check the latest updates on eToro's offerings to confirm the availability of ISA accounts.