IIAwards - Review of eToro

As part of the recently announced IIAwards, in which we celebrate innovations in the fintech and crypto industry, today we will analyze eToro taking into consideration different categories.

eToro is a social trading broker established in 2007 in Israel. In recent years, it has actively expanded in the US and European markets. eToro is one of the key players in the global cryptocurrency and CFDs trade. It’s regulated by the Financial Conduct Authority (FCA) in the UK and the Australian Securities and Investment Commission (ASIC) in Australia.

eToro’s pricing strategy depends on your location and the asset class traded. The trading and CFD fees can be considered low when compared to direct competitors. On eToro, no fees are charged when opening a position. The fees are based on the spread. eToro has a list of minimum spreads for each cryptocurrency, and those rates are not guaranteed.

The daily break spreads are as follows: 1.5 percent for BTC, 5 percent for BCH, 3 percent for DASH, 2 percent for Ethereum, 5 percent for ETC, 3 percent for LTC, 5 percent for NEO, 5 percent for XLM and 3 percent for XRP. eToro charges $10 per month after one year of inactivity, yet you can avoid this fee by simply logging in. The withdrawal fee has been recently lowered to $5.

The broker is broadly recognized as a platform for CFD, forex and cryptocurrency trading, while it also offers a range of ETFs and stocks. US citizens cannot open an account unless they reside in the US. There are no short sales, fixed income, options or mutual funds offered.

The most noteworthy product of the company is its social trading feature that allows a client to copy the portfolio composition of other traders, thus becoming a useful platform through which to begin one's relationship with the financial markets. The product offering is not excessive, as for example, there are fewer stock CFDs available than at Plus500, but they are packaged in a neater way.

As previously argued, eToro is the perfect choice for beginners in trading since the platform is well designed and user friendly. However, it offers little personalization and customization which would be relevant for more experienced traders. The platform also offers web-based and mobile versions.

As a result, you can operate it on PCs, Macs, Android or iOS devices, using eToro’s intuitive functionality. The key feature of this proprietary platform is copy trading. The eToro platform features traders who want to be copied and who follow risk-control rules.

The onboarding process is fairly streamlined. The minimum deposit to start trading on eToro is 200 USD. eToro offers two account types: a live account and a demo (virtual) account so you can try out the platform with virtual money. It is possible to access the demo account with a Facebook or Gmail signup.

To engage in actual trading, you need to upload documents verifying your identity and place of residence - the entire process could be as fast as one day. US account holders can only open cash accounts. Outside the US, customers cannot open retirement accounts, yet there is leverage available for those trading currencies.

The broker does not prioritize customer support as it invests in tackling any confusing aspects of the platform in the stage of platform design. There are no direct phone lines (except in Australia) and no live broker support. The online chat is available from the customer service page, yet it is difficult to reach Support on weekends.

Accounts under 5,000 USD can access help online and submit a ticket to eToro’s customer service. It is possible to chat with a live agent once you locate the light blue link to the chat service. Members of eToro’s Club with account balances from 5,000 USD have access to a dedicated account manager. Accounts from 25,000 USD, at the Platinum Club level and higher, get priority customer support.

Similarly to other brokers, eToro offers a demo version of the platform. It can be accessed once the trader has registered with their e-mail or Facebook account. There is one short tutorial video on how to use the platform and some basic educational videos on investment and the financial markets. All information can be found on the website in the section "Learning Lab." While at the moment only some of the videos have been released, they are working to unveil more videos for trading beginners and professionals.

The explicitly graphic design of the platform aims to educate traders as well as empower them with the investment tools. Moreover, there’s a series of articles titled "The Complete Fintech Guide" which opens in a separate tab. It’s worth going through the chapter that describes how eToro’s Copy Portfolios work if you’re interested in following other traders.

Clicking on any link on the "Help" page spawns a new browser tab if you’re on the web platform. At the top of each new page are five links to additional pages. Clicking on "Education" brings up what is essentially an eToro-sponsored blog, with a variety of articles that primarily focus on market swings for bitcoin.

eToro's website and mobile app are nearly identical, attractively laid-out, and easy to navigate. The latter was launched in 2013 for both Android and Apple users. The mobile app allows cryptocurrency purchases by credit card and it's available in the same 21 languages as the web trading platform.

It uses mobile-specific intuitive functions, such as push notifications or good touch interactions. For example, you can swipe left and right in your portfolio to access charts or open a new trade. Moreover, the mobile edition allows for customization and sharing of watchlists. Placing a trade on a mobile device is very similar to the web version experience.

The highly graphical interface is user friendly, although it doesn't allow plenty of customization opportunities. In 2015, the platform updated the interface for an even more innovative and intuitive experience. It has been designed in a way to help those without plenty of trading experience get the information they need and make trades.

As the broker primarily engages with novice traders, it has to take the necessary measures to protect its clients. eToro incorporates a number of cutting edge security protocols and data encryption by default, with a dedicated secure mechanism to prevent CSRF attacks. Biometric entry is enabled for the mobile platform.

eToro uses two factor authentication (2FA), limits login attempts and employs whitelisting attribution models to prevent automated attacks.

The most noteworthy innovation is the platform’s approach to social trading, which helps many first-hand traders smoothly join the process. eToro’s CopyPortfolios is a managed portfolio bundling assets and top traders with a predetermined strategy. This feature allows traders to copy investments of successful traders.