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eToro Share Dealing Review

Joey Shadeck

Joey Shadeck | May 21st, 2020

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFD assets. Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% 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. This content is intended for information and educational purposes only and should not be considered investment advice or investment recommendation.

eToro is excellent for traders seeking zero-commission stock and ETF trades, an efficient platform, and access to copy trading. That said, education is sub-par, and eToro doesn't offer the same range of investments as traditional brokers.

Top Takeaways for 2020

After spending over 100 hours testing ten online stock brokers for UK share dealing, here are our top findings on eToro:

  • Although eToro markets 0% commissions, there are conversion fees, withdrawal fees, CFD fees, and inactivity fees readers need to be aware of. That said, share dealing at eToro is still cheaper than most brokers.
  • The eToro web platform and mobile app are user-friendly and offer a variety of charting tools and layouts.
  • Compared to research leaders Interactive Investor and Hargreaves Lansdown, the eToro research left us unimpressed, offering limited fundamental data and little in terms of research reports.
  • eToro is the only share dealer we've reviewed thus far that provides copy trading, a unique way to invest.
  • Traders have access to stocks, fractional shares, forex, ETFs, and CFDs, while sacrificing the ability to trade options, bonds, investment trusts, and funds. ISA and SIPP accounts are not available at eToro.

Overall Summary

FeatureeToro
Overall 4 Stars
Offering of Investments 3.5 Stars
Commissions & Fees 4.5 Stars
Platform & Tools 4 Stars
Research 3.5 Stars
Education 3 Stars

Commissions & Fees

eToro markets 0% commission stock trading. While commissions are not charged, there are some fees customers should be aware of.

The different types of additional fees are disclosed below. Note, eToro has different account tiers based on account balance, which make traders eligible for fee discounts and other features.

Conversion Fees - If you deposit money in AUD, EUR, GBP, and RUB, it will be converted to USD when you deposit money and converted back when you withdraw the money. Fees vary based on how you deposit money, and what currency you are transferring. Fees range from 50 pips to 250 pips per conversion.

Example conversion fee: Let's say the GBP/USD is trading at parity (1.00), and that £1,000 is worth $1,000. For every 1000 units of GBP, 1 pip will be worth exactly 10 cents, or 0.0001 * 1000, so 50 pips on £1,000 is £5. If you trade £1,000 worth of shares while the GBP/USD is trading at 1.00 you will pay a £5 conversion fee when depositing money and another £5 when withdrawing money. At 250 pips, you will be paying £25 for each deposit/withdrawal or £50 round-trip.

Withdrawal Fees - eToro charges a flat $5 fee on all withdrawals. The minimum withdrawal amount is $30.

Minimum Position Amount - Imposes a minimum position amount of $50.

Inactivity Fees - When an account has been deemed inactive (no login for 12 months), a monthly inactivity fee to the sum of USD $10 will be charged from any remaining available balance.

CFDs - Clients may also trade stocks on eToro using Contract for Difference (CFD) trading. These trades incur multiple fees, and traders can learn more at the eToro website.

When calculating annual share dealing costs, trading frequency and account balance are the two most important factors to consider. Assuming a £30,000 portfolio in traditional, taxable share dealing account, here are four scenarios of how much eToro would cost depending on trade frequency:

  • 1 deal per month, 12 trades = £75 (£75 in conversion fees if GBP/USD is trading at parity)
  • 3 deals per month, 36 trades = £75 (£75 in conversion fees if GBP/USD is trading at parity)
  • 10 deals per month, 120 trades = £75 (£75 in conversion fees if GBP/USD is trading at parity)
  • 20 deals per month, 240 trades = £75 (£75 in conversion fees if GBP/USD is trading at parity)

Zero commission trading applies to all stocks available on the eToro platform when investing in non-leveraged BUY stock positions. Zero commission does not apply to leveraged positions, short selling, or stock CFDs. Look at the bottom of the order ticket to see if you are purchasing the underlying asset or a CFD before submitting the ticket. The first picture below is an underlying asset (meaning you own the stock), while the second is a CFD (different from stocks + charge fees). Zero commission stock investing is available to eToro users residing in countries under FCA and CySEC regulations, which include all major European countries.

FeatureeToro
Share Trading: 0-9 Deals/ Month£0 (Other Fees Apply)
Share Trading: 10-19 Deals/ Month£0 (Other Fees Apply)
Share Trading: 20+ Deals/ Month£0 (Other Fees Apply)
Annual Custody Fee: £0 - £250,000*£0 (Other Fees Apply)
Annual Custody Fee: £250K-£500K*£0 (Other Fees Apply)
Annual Custody Fee: £500,000 - £1m*£0 (Other Fees Apply)
Annual Custody Fee: £1m and over*£0 (Other Fees Apply)
ETFs - Fee£0 (Other Fees Apply)
Investment Trusts - FeeN/A
Telephone Dealing Fee*N/A

Gallery

Platforms & Tools

eToro does not have a downloadable platform, currently offering a web platform and mobile app. Both are user friendly and allow easy access to real/virtual trading, copy trading, and sound charting capabilities.

Charting: eToro boasts 66 technical indicators and 13 drawing tools for its platform. Traders have access to change chart types, chart intervals, and overlays, amongst other features. Another useful feature eToro offers is ProCharts, which allow traders to compare up to six different charts at once. ProCharts is currently only available on the web platform.

Mobile Trading: The eToro mobile app is an efficient and easy way to trade shares. All of the technical indicators and drawing tools function smoothly on the app. Navigating to specific markets, watchlists, or virtual trading is seamless. The eToro app has a clean and modern feel to it, unlike some of the more traditional brokers. We did not test CFDs or forex trading for this review.

Gallery

FeatureeToro
Desktop Platform (Windows) No
Web Platform Yes
iPhone App Yes
Android App Yes
Stock Alerts Yes
Charting - Indicators / Studies66
Charting - Drawing Tools13
Charting - Notes No
Charting - Display Corporate Events No
Charting - Stock Overlays Yes
Charting - Index Overlays Yes

Research

Traditional research for stocks and ETFs is limited at eToro. Basic company fundamental data are provided, such as financial data and a quick overview of the asset. Analyst ratings and price targets are also available for funded accounts. Unfortunately, these ratings and price targets are primarily available for U.S. stocks, with limited research available for most stocks listed on the London Stock Exchange.

eToro does not currently offer market news or a stock screener, features offered by most online brokers.

Social Trading Network: One unique aspect of eToro is the emphasis it places on social trading. Every time you view a stock quote, one of the first things you see is a social feed. The social feed is like Twitter, but for stocks. People will tweet their thoughts on stocks, often with data to support claims. While the usefulness of the social trading network is debatable, it is an exciting feature that is not widely available.

Gallery

FeatureeToro
Research - Shares Yes
Research - CFDs No
Research - Funds No
Fund Research - Research Reports No
Research - ETFs No
Research - Bonds No
Portfolio Allocation Breakdown Yes

Offering of Investments

eToro offers share dealing on 17 different exchanges. Fractional shares are also available, a feature not provided by most UK brokers. In addition to share dealing, traders can deal forex, CFDs, and cryptocurrencies. Conversely, eToro does not offer options, bonds, investment trusts, or funds. ISA and SIPP accounts are not available at eToro.

Copy Trading: Copy Trading allows traders to automatically copy trades placed by other select individuals. Users can copy individual traders and portfolios. Different individuals and portfolios may have different risk levels and focus on certain aspects of the market, which allows you to copy specific strategies. For more information, read the copy trading page on Wikipedia.

Gallery

FeatureeToro
Share Trading Yes
CFD Trading Yes
Funds No
ETFs Yes
Bonds - Corporate No
Bonds - Government (Gilts) No
Investment Trusts No
Spread Betting Yes
Advisor Services No

Education

Education at eToro is primarily limited to the eToro Trading School. Trading School teaches different aspects of trading, such as placing trades and goal management through webinars. These webinars typically last an hour or so. Trading School also hosts market watch webinars, which focus on what's going on in the financial markets. While the webinars are engaging, it's a pain to skim around an hour-long video to find clarification on a subject. Most brokers offer educational articles, which makes learning more efficient.

FeatureeToro
Has Education - Share Trading Yes
Has Education - Funds No
Has Education - Retirement No
Client Webinars Yes
Client Webinars (Archived) Yes

Final Thoughts

eToro offers deeply-discounted trades on an easy-to-use web platform and mobile app. eToro is a great option for traders who are interested in copy trading or primarily deal shares, forex, ETFs, cryptocurrencies, and CFDs. Investors seeking options, investment trusts, funds, or the traditional ISA and SIPP accounts will want to read our Best Share Dealing Accounts Guide.

About eToro

As an early pioneer in social copy trading, eToro was founded in Israel in 2006 as a financial trading technology developer. After launching its first product, it has since grown to service over 9 million users with an innovative platform that continually evolves to be one of the largest social networks globally, with clients in over 170 countries.

Disclosures

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFD assets. Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% 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. This content is intended for information and educational purposes only and should not be considered investment advice or investment recommendation.


Joey Shadeck

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All pricing data was obtained from a published web site as of 01/15/2020 and is believed to be accurate, but is not guaranteed. The UK.StockBrokers.com staff is constantly working with its online broker representatives to obtain the latest pricing data. If you believe any data listed above is inaccurate, please contact us using the link at the bottom of this page.

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