A financial tech startup hailing from the Middle East, eToro is a social trading brokerage firm founded back in 2007. It is currently holding office in Israel. It caters to clients from the United Kingdom, Australia, and the United States.
It must be noted that eToro is not listed on any stock exchange and had not made it possible to disclose its annual report through its site. In addition, it has not paired itself with any bank parent.
While this is the case, eToro is known to be a legitimate firm, given the declaration of its regulators. Its clients agree that trading through eToro is safe.
What eToro Offers
Commission-free stocks and ETF trading in Europe are among the numerous benefits that one can get from enlisting with eToro.
The average non-E.U. trader would also be glad to know that eToro offers low CFD fees. The process for opening accounts is speedy and without hurdles. On top of these, it has what is called Social Trading. What this type of trading does is that it lets the trader emulate the strategies that other traders have adapted intending to achieve the possible profits that the previous traders had earned.
The Not-so Good
However, while it has been mentioned that eToro provides lower fees, its Forex fees are high. Add that to the fact that money withdrawal is pricey, being pegged at $5, and has a slow process. Also, it only has one account base currency and has a minimum deposit of $200.00.
Things to Expect When Trading With eToro
eToro calls its system, the Straight-Though-Processing platform. What this means is that investors are allowed to leverage eToro’s broker license to permit direct access to investments. Such service entails fees.
The platform also operates effectively through what is called a No Dealing Desk Model. What this implies is that no changes can be seen in the price between the investor (or trader) and the market.
Once a trader chooses to place an order during active market hours, eToro acts speedily by transferring and processing the trade. From the trader’s end, the price will not be allowed to be modified. The only time that prices can change is when market behavior does.
Regarding withdrawals, eToro simply does not allow daily ones.
Is it Safe to Trade Through eToro?
The short answer is YES.
How do we know that? Let us count the ways:
- As already stated, it is licensed and regulated by the Cypriot Investment Firm (CIF).
- Cyprus Securities and Exchange Commission also regulate it within entities operating within all of Europe.
- In their operations for Australia, the conduct of business is regulated through the Australian Securities and Investment Commission (ASIC).
- Within the U.K., it is regulated by the Financial Conduct Authority.
- It had also been signed up for a license in the United States.
However, the case had not always been so in the United States. Certain regulatory revisions had led the brokerage firm to not be available to traders and investors within the U.S., but now, the issue no longer persists.