The search for a good trading platform in the UK is always a bit of a letdown.
Many of the best platforms are US-specific or don’t have the market variety necessary for traders who really want to spread their wings and find great success.
Until eToro came along, that is. I’ve personally used eToro as a trading platform for years and found it to be a great experience from start to finish. Let’s break down eToro in more detail so you can decide if you want to try it yourself.
What is eToro?
eToro is a licensed and regulated trading platform available to UK residents and users across the globe.
In this eToro review you will find that the platform offers a plethora of trading options, extensive markets, excellent features, and a wide userbase that creates a good trading environment for both newcomers and experienced traders alike.
eToro Trading Review (2021) 🇬🇧
Overall, eToro is a solid online trading platform that is among the most affordable and useful compared to many others.
It charges 0% commission fees for all your trades, plus offers trading options across a variety of asset types, including stocks, ETFs, and more.
It has a reasonable minimum deposit amount of $200 for your first trade plus advanced features such as CopyTrade, which allows you to copy successful traders if you don’t have the experience to create a complicated strategy on your own.
Is eToro Safe?
Safety Comes With Experience 🛡️
Yes. In fact, eToro has already been in operation for over 14 years and has a head office in Cyprus, UK.
Any payments that are funded to your account will be held in a segregated bank account.
Tier-1 banks are always used, which are considered to be among the safest and most secure for any client capital.
In other words, money that goes into your eToro account or that you receive from your trades will be safe until you choose to retrieve it.
It’s heavily regulated and is supervised by the Financial Conduct Authority or FCA, as well as the regulatory bodies CySec (Cyprus Securities and Exchange Commission), MiFID (Markets In Financial Instruments Directive), and ASIC (Australian Securities and Investments Commission).
All we want to say with this eToro review is that the trading platform has lots of oversight. So you don’t need to worry about any issues or scandals plaguing your time on the platform.
eToro UK Laws
Completely Legitimate 👨⚖️
eToro is fully licensed and regulated in the UK. This essentially means that you have to follow the same regulations using this platform as you would with other fully licensed brokers, such as:
- You need a color copy of your passport and signature to request a withdrawal
- You’ll also need a copy of a recent bank statement when making an account
- Certain limitations exist if you pay with a credit card
You can look at the details of these rules and regulations right on eToro’s website.
No Commission, but There Are Some Fees 💰
Although eToro frequently advertises that it is a free stock trading platform (and indeed, it has 0% commission fees), there are a variety of other fees you should be aware of before using it.
The first of these are conversion fees. This occurs whenever you convert currencies such as GBP, AUD, or EUR into US dollars.
Remember, eToro only allows trades with US dollars, so you have to pay a conversion fee if you deposit funds in another currency and withdraw them back to their original currency after trading.
These conversion fees typically range from as low as 50 pips to 250 pips. A “pip” is an investing term and acronym for a percentage in point. It’s equivalent to 1% of one basis point, or about $0.0001.
Next are withdrawal fees, which are much simpler to understand. eToro charges a flat $5 fee for any withdrawals, and you must have a minimum account balance of $30 to make a withdrawal in the first place.
eToro also requires a minimum position amount of $50 for any position you hold. If your account is inactive for 12 months (meaning you don’t log in at all), you'll also be charged an inactivity fee of $10.
Lastly, if you perform any CFD or “contract for difference” trades, you might also incur additional fees. These are heavily dependent on the value of different CFD assets, however.
Note, however, that signing up for a higher account tier (or reaching the higher account tier by increasing your current account balance) may make you eligible for various fee discounts plus some special features.
eToro Overnight Fees
eToro, along with many other top stock trading apps or brokers, charges overnight fees if you hold various assets or financial instruments.
In eToro’s case, you’ll only be charged overnight fees for holding CFDs or margin trades overnight, and only on weekdays (except for cryptoassets, which are charged for overnight holding over the weekend).
Overnight fees can be charged on different weekdays depending on the asset or instrument in question.
What Exchange Rate Does eToro Use?
As mentioned, eToro does allow you to convert your currency (such as GBP) to US dollars if you want to trade.
But it’s almost always a better idea to simply convert your currency to USD first, then put your money into the eToro platform in order to avoid extra fees.
eToro’s exchange rate is increased by 0.5% every time you make a currency conversion from euros or pounds to dollars.
Earning money in the long run will prove lucrative if you change your trading currency to be USD before adding it to your eToro account. This is, ultimately, a minor downside compared to all of eToro’s excellent features and functions.
Is eToro Really Free?
All in all, eToro isn’t truly free when you take into account the withdrawal and other fees.
However, it’s still a superior option compared to a lot of other online brokers and trading platforms purely because it doesn’t incur any commission fees (which are typically the highest fees traders experience).
Calculate the Risk 🧮
Leverage in stock trading parlance is basically the risk level a trader is allowed to use to make a trade with stock or another asset.
eToro, as many other brokers do, does allow traders to use leverage when they open a trade, but they can also choose to decrease the leverage available at any time.
Leverage limits are dictated by the ESMA or European Securities and Markets Authority. These include
- Limits of x30 for any major currency pairs
- x20 for any non-major currency pairs, as well as gold and major indices
- x10 for any commodities other than gold or nonmajor equity indices
- x5 for ETFs and CFD stocks
- x2 for any cryptocurrencies
In the end, it’s excellent that eToro allows for some leverage flexibility. It allows traders to make bigger trades and potentially see better returns than they would with the cash they have on hand alone.
eToro Market Hours
Find Out When Are You Able to Trade ⏰
With the exception of cryptocurrency markets, which are open 24 hours a day, eToro has certain market hours based on the assets you wish to trade.
- Stocks and ETFs – Monday 01:00 to Friday 09:30
- Commodities hours vary, but are usually Sunday 16:00 to Friday 14:30
- Indices hours vary, but are usually Sunday 16:00 top Friday 14:15
- Currencies hours vary, but are usually Sunday 15:05 to Friday 14:30
Fortunately, the eToro website made our job of making eToro review much easier as it outlines all of its trading hours if you want to know what your options are for a particular asset or instrument.
What Can You Trade at eToro?
eToro Has It All! ✨
One of eToro’s biggest strengths is the sheer variety of trading options that users have.
Plenty of other brokers have limited trading variety.
In fact, eToro offers eight different trading options.
The most basic of these are, of course, regular stocks.
You can trade trees through the London Stock Exchange or LSE through regular hours. Unfortunately, eToro is not yet approved in the US for trading stocks on the NYSE.
eToro Forex (Currencies)
Forex currency trading is also supported on eToro which made number one spot on our best forex broker list. This allows you to make trades on Forex instruments such as trading on the USD or GBP.
One of the big ways in which eToro shines ahead of the competition is through its cryptocurrency trading options. Not only can you trade these 24/7, but you can trade with US markets as well.
Crypto trading is quickly taking off and may become the next big place for growth for traders who know what they’re doing and who have a little appetite for risk.
eToro offers trading for indices such as the USDOLLAR Index, ChinaA50 Index, and more.
You’ll be able to place trades with ETFs or exchange-traded funds, too.
eToro is a great place to trade various commodities, such as oil, gold, and silver.
Additional markets focusing on natural gas, platinum, palladium, and more are also available for traders who have the knowledge needed to make winning exchanges.
Want to see some regular returns from your investments?
eToro allows you to trade dividends, which are simply stocks that include cash payments from companies that issue said stocks. Those payments are paid directly to any investors every year or quarter depending on the contract.
Trading options is a little abstract for many traders’ tastes, but it does allow you to get in on some speculative trading. Buy buying or selling an option, you essentially buy or sell the choice to purchase or sell a stock or asset at a set price at a particular time.
Ultimately, eToro allows for relatively simple stock exchanges and trading actions along with more complex options as well. There’s plenty of variety here for both newcomers to trading and experienced users.
Other eToro Features
More Than Meets the Eye 👀
Although eToro has a lot to offer in terms of its actual trading variety, the platform is good in large part due to its advanced features. Let’s break down some of the best of these.
One particularly advanced feature we found, while doing the eToro review, is “CopyTrader”.
Since eToro has a collaborative community of millions of different traders, you can directly leverage this knowledge base and choose popular or well-known investors you want to copy.
Simply set-aside how much you want to allocate for investment, then copy that trader’s moves. This may be particularly good for newcomers learning the ropes or who may not have the confidence to know whether they’re making a good trade.
Find someone who gets consistent results and let them do the work for you!
Asking for Expert Advice
As mentioned, eToro has an extensive user community filled with stock trading and investing experts.
You can consult these experts at any time, whether to ask questions about whether or not your strategy is sound or their thoughts about where the market is heading.
In this way, eToro is a good platform to start building up your knowledge and confidence when it comes to stock or financial asset trading.
However, these experts also provide a variety of research and knowledge materials you can sink your teeth into.
You can access analyst ratings and various price targets for tons of different assets, although most are for US stocks. Keep in mind that this may limit eToro’s research usefulness for stocks listed on the London Stock Exchange.
The eToro mobile app is available for both iPhone users and Android devices.
It’s particularly good for managing your portfolio while on the go, as it’ll allow you to check your markets and trading portfolio 24/7.
In fact, so long as your desired market is open, you can make trades right from your mobile device.
Even better, you’ll be able to access most of what is on the main eToro platform through your phone or tablet.
This includes connecting with other members in the eToro investment community, CopyTrading, receiving real-time market updates, and more.
eToro shines once again when it comes to customer support, offering support in multiple languages including English, Spanish, French, Italian, and German.
Live chat, email, and phone support are all offered, so you should be able to get a quick and easy resolution to any issues you have in no time.
eToro Live Chat
eToro’s live chat function specifically works well and agents typically respond to user questions or issues within three minutes. This is true regardless of the language you speak or choose to use for your customer support session.
Ask Away! 🤔
Is eToro Trustworthy?
Yes. This platform is fully licensed and is heavily regulated by multiple governing bodies across several countries. Plus, all of your funds are secured in trustworthy banking institutions.
Is eToro Good for Beginners?
In many ways, yes. The CopyTrading function is great if you want to get consistent returns from your investments as you learn the ropes of smart trading.
Plus, having access to certain research tools and the advice of experts (as well as the greater eToro community) makes it easy to learn your way to success.
Because of both the CopyTrading function and the vast eToro community the trading platform is considered one of the best online trading platform for beginners.
How Much Can You Withdraw from eToro?
You can withdraw as much as you want from your eToro account, provided you meet the minimum withdrawal amount of $30. If you want to withdraw via a bank transfer, you must have $500 in your eToro account.
Can You Make Money on eToro?
Yes. However, remember that trading on the stock market is never 100% sure, nor should you treat it like a traditional business. Many people fail, even if they have great trading strategies, simply due to inherent market volatility and other factors.
Can I Buy XRP on eToro?
Yes. XRP is a type of cryptocurrency. In addition to this, you can also trade BTC or Bitcoin, ETH or Ethereum, and more.
Final Verdict 📜
Ultimately, eToro is an excellent choice for a “mostly” free stock and asset trading platform.
It’s a great place for both beginners and experienced traders looking for a place to make smart, successful trades or to benefit from the collective wisdom of a large network of traders around the globe.
For UK traders, in particular, it may be an ideal choice due to its heavy regulation and excellent trading option variety.