eToro is a popular trading platform that is available in Australia. Through eToro you can buy and sell shares from the U.S, E.U and U.K without having to pay any brokerage commissions. This means you can invest in companies like Apple, Amazon, Netflix, Tesla, Spotify and more.
This is my guide to buying shares on eToro in Australia:
How to Buy Shares on eToro
Buying Shares through eToro is a fairly straight forward process. The interface is really nice and most will be able to pick it up pretty quickly. Here is my step by step guide:
1 – Create an Account
Creating an account is quick and easy. It can all be done online and you can sign up for an eToro account here.
Note – remember all trading involves risk, only risk capital you can afford to lose.
2 – Verify your Identity and Complete Questionnaire
After creating your account you will need to verify your identity and complete a questionnaire. There are some more advanced trading products on eToro (such as margin trading). And eToro might limit your access to these based on trading experience and net worth. This is standard across all trading platforms.
3 – Deposit Funds
On eToro Australia, the minimum first time deposit amount is $200. After that you can deposit $50. Note this is USD. When you deposit your funds will automatically get converted into AUD. You can deposit using bank transfer, credit card, PayPal and PoLi.
4 – Buy Shares!
When you visit the Trade Markets page you’ll see everything that can be traded on eToro. For newer investors it’s probably best to stick with Stocks and ETFs.
To buy a stock you can click the “Buy” icon. If you click the “Sell” icon you’ll open a short position via a derivative (which I wouldn’t recommend for anyone other than advanced traders).
Here are some important things to note when opening an order on eToro:
- Rate – You can choose to buy the share at a set Rate or at Market. A market order will buy the Share at whatever the current asking price is.
- Amount – The minimum amount you can invest in a Share on eToro is $50. eToro supports fractional shares. You can buy a fraction of a share with just $50 at a time.
- Stop Lost – You can choose to have eToro close your share trade if it drops by a certain amount. I don’t set this for my share trades as I’m investing for the long term and I’m happy for the price to move around.
- Take Profit – This will automatically close your trade when it hits a certain profit amount.
- Leverage – On eToro it is possible to trade Shares using leverage (or margin). This is an advanced trading concept and I wouldn’t recommend you change from X1 (which means no leverage).
- Trade Type – If you’re trading without leverage you should see a message saying “You are buying the underlying asset”. This means you’re buying the actual Stock and not trading a CFD.
You won’t be charged any commissions when buying shares or ETFs through eToro. This means you can buy and hold for long term gains.
Selling your Shares
To sell or close your position on eToro:
- Visit your Portfolio page
- Click on the Share or Asset you are looking to sell
- You’ll see a list of the trades that are currently open
- Click on the “close” icon. This will close the trade (buy selling your shares). If the market is closed eToro will close the trade when the market opens.
Once your trade is closed your funds will be available in your eToro account right away. You can then withdraw these funds back to your Australian bank account (or other payment method).