Cryptocurrency trading can be challenging for beginners and advanced users. However, platforms like eToro make it easy for both investors and traders. In addition, features like a Demo account add to their convenience.
eToro is a multi-asset platform that offers to invest in stocks, crypto assets, and trading in CFD assets. A CFD (Contract for Differences) is a financial contract that pays for the differences in the settlement price between opening and closing trades. These contracts are popular in FX and commodity products as they allow investors to trade in the direction of the securities over a very short time.
eToro Key Features
One should understand that CFDs are complex instruments where the risk of losing money is high. eToro does not have an excellent reputation in trading CFDs. Therefore, one should understand the CFD mechanism before considering trading in it.
- eToro, established in 2007, is regulated in two tier-1 jurisdictions and one tier-2 jurisdiction. Therefore, it is considered a safe broker for trading forex.
- eToro is an excellent platform for social copy trading and cryptocurrency trading. It has a user-friendly web platform and mobile app convenience for beginners and casual investors.
- eToro offers a demo account feature to enable newcomers to acclimatize to crypto trading. Besides, it provides a wide range of different cryptocurrencies to trade.
- The crypto trading fee structure is complicated to understand. Despite reducing the spreads and introducing zero-dollar commissions for US stock trading, eToro offers pricy options for trading forex and CFDs.
Types of Trading & Order Types
eToro offers the following investment and trading products.
· Stocks and ETFs
eToro has made investing in the world’s leading stocks affordable with its 100% stocks – 0% commission product. 0% commission means that eToro does not charge any additional management, administration, or ticketing fees. It also absorbs stamp duty and financial transaction tax for clients wherever applicable.
· Crypto Trading
eToro provides ample opportunities for beginners and experts to enjoy a comprehensive crypto trading experience. In addition, the social trading feature lets users connect with more than 20 million users worldwide and find the best crypto traders to copy using Copy Trader.
CFD trading offers options to traders that are not available with traditional investing platforms. CFD trading allows individuals to engage in contracts with CFD brokers rather than purchasing the underlying asset directly. CFD trading does not involve the actual asset and operates independently of the market, offering greater flexibility.
Is Verification Required – Verification Levels & Fees
Verifying your account on eToro is mandatory. It enables the user to get the best possible service and comply with financial service regulations. The user has to complete these formalities to verify their account:
- Identity Verification – by submitting a government-issued ID card.
- Phone number verification – through SMS verification links.
- Proof of address – any document that proves the residential status of the user.
Here is the fee structure stipulated by eToro:
- Opening an account with eToro is free.
- No commission of stocks.
- No management fees.
- Stocks and ETFs: There are no management or broker fees. Similarly, there are no rollover and ticket fees.
- Cryptos: On purchasing cryptocurrencies on eToro, you gain the assets’ ownership. The trading fees are in the form of spreads, depending on the cryptocurrency you trade.
- CFDs: CFD fees depend on PIP (Percentage-in-point). One PIP equals the smallest price change a given exchange rate can make. Generally, it is the last digit of the price. Thus, it measures the change in the price of one currency with the other.
- Currencies – Starts from 1 PIP, depending on the currencies traded.
- Commodities – Starts from 2 PIPs, depending on the commodities.
- Indices – Starts from 0.75 points
- Stocks and ETFs – 0.09%
- Cryptocurrencies – From 0.75%, depending on the cryptocurrency you trade.
- Other Fees
- eToro charges a fixed fee of $5 for withdrawals to cover international money transfers. The minimum withdrawal amount is restricted to $30.
- Conversion fees start from 50 PIPs.
- An inactivity fee of $10 per month is payable for accounts not having logged in for 12 months.
eToro Security Features
eToro is a secure crypto exchange platform and offers a lot of security features such as:
- eToro is regulated by FCA (Financial Conduct Authority) and CySec (Cyprus Securities and Exchange Commission).
- The company has industry-leading security protocols to protect investor and trader funds.
- eToro does not share your private data without your permission.
Is Your Money Safe With eToro?
More than five million traders trust the eToro platform. The exchange is licensed in various countries to hold client funds and provide brokerage services. eToro plans a NASDAQ listing in the third quarter of 2021 following a $10.4 billion merger.
eToro is amongst the safest brokers to use because it follows proper regulatory licensing. Besides, it has ample liquidity in the form of financial capital. eToro has a reliable operational history and a good track record of providing customer service. Thus, eToro is a trustworthy exchange, and your money is safe with eToro. However, one should understand that CFDs can be risky investments. The chances of a loss are always high. Even eToro states on its website that around 67% of traders lose money on CFDs.
eToro Pros & Cons
Here are the benefits of trading on the eToro platform:
- Supports 30 different cryptocurrencies.
- Offers the advantage of a demo account with risk-free trading.
- Opportunity to earn interest through crypto staking.
- Social copy trading
- Provides a convenient mobile app and eToro Money wallet.
Here are the drawbacks of the eToro platform:
- The trading fee structure is complicated.
- The live chat feature is available to eToro Club members only.
- Stock trading and CFD features are not available to USA residents.
The best advantage of eToro is that it is an excellent cryptocurrency broker platform that is easy for beginners and experts alike. In addition to crypto investments, features like social trading and copy trader enable users to take full benefits of the platform. Whether you want to invest in Bitcoin or learn the strategies of more experienced traders, EToro can be a great way to diversify your investments and broaden your knowledge. In addition, the Demo account allows beginners to practice risk-free trading. EToro is great for retailers who want to crowdsource investment ideas and use the power to copy the trading experience of active traders, but also want to be rewarded for sharing their ideas with other traders. Experienced traders who need some handling may find the user-friendly platform an added benefit.