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.
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 $50. (This was changed from $200 to $50 in October 2021). 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.
When your Australian dollars get deposited, they get exchanged into USD. eToro makes a small commission on this exchange, similar to how Stake and Superhero operate. This FX fee is much more competitive than what Australian banks charge and I’ve found it’s way cheaper to invest in US shares through eToro than on a platform like Commsec.
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).
Stocks Vs CFDs
On eToro you can trade both real stocks and CFDs. A CFD is a synthetic trading product. You aren’t buying the actual underlying asset. Instead you are trading a contract. CFDs are more complicated. I would only recommend trading CFDs if you are an advanced trader. eToro will tell you if you’re buying the underlying asset or trading a CFD before you open a trade. If you’re just looking to invest in a company like Apple, stick to buying the real stock. On platforms like Plus500 you can only trade CFDs and subsequently most traders who use that platform lose money. On eToro you can invest in real stocks.
Disclaimer: eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% 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.
Past performance is not an indication of future results. Trading history presented is less than 5 complete years and may not suffice as basis for investment decision.
Copy trading is a portfolio management service, provided by eToro (Europe) Ltd., which is authorised and regulated by the Cyprus Securities and Exchange Commission.
Cryptoassets are volatile instruments which can fluctuate widely in a very short timeframe and therefore are not appropriate for all investors. Other than via CFDs, trading cryptoassets is unregulated and therefore is not supervised by any EU regulatory framework.
eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.