eToro is a trading platform that is available in Australia. You can trade stocks, currencies, cryptocurrencies, commodities and ETFs. But is it a good option for investing and trading? We break down the pros and cons.
What is eToro
eToro is an online trading platform. You can buy and sell shares (both real shares and CFDs), forex (currency like the AUD), cryptos (like bitcoin) and commodities (such as Gold and Oil). It’s also a “copy trading platform”. This means you can copy trades made by more experienced traders. Whenever they make a trade, your account also makes a trade.
I currently use eToro to invest in a portfolio of tech companies.
What are you trading on eToro?
In Australia you can trade both real stocks and CFDs on eToro. For most people, I would recommend sticking with investing in real stocks. CFDs are a more complex financial instrument and are meant to be traded by more advanced traders.
On eToro you can buy and invest in shares like Apple, Alphabet (google), Netflix, Tesla and hundreds more.
Here are some of the advantages of investing through eToro
- Start investing with $50 – you can buy fractional shares on eToro. This means you can own just a fraction of a share (such as 0.01). You don’t need to buy a full share.
- Near Instant Settlement – you don’t need to wait for funds to clear before you can open more trades on eToro. When you close a position you can open another one right away.
- Zero commissions – There are no commissions on real share trades. You’ll save a fortune in fees compared to using a broker like commsec.
- No ongoing fees – Some platforms such as IG charge you a quarterly fee for holding shares. On eToro there are no ongoing fees. So you can buy shares and hold them for long term profits.
I use eToro to invest in shares like Apple, Nio and Tesla. These are companies that align with my values and where I see the world going. Being able to invest in these shares from Australia – without having to pay any fees, is the reason why I use eToro.
What is eToro Copy Trading
eToro Copy Trading is where you copy a trader. When you copy a trader, you allocate funds that will automatically be used to copy all the trades made by the copied trader. Whenever they make a trade, your account will make a similar trade. When they close a trade, your account will close the trade too.
If you have limited trading experience then this could be a good way to see how trading works.
Should you trade on eToro
If you want to have more control over your investments, then eToro could be a good option. For example, if you want to own some Apple shares, because you’re a big fan and user of the company, then you can do this through eToro. If you’re new to trading you can sign up for free and trade with a virtual practice account.
If you’ve already had experience with other forex or stock trading platforms then eToro might be a good option for you. It’s got a great range of assets and a pretty good trading interface. It is possible to trade CFDs on eToro. These are complex financial instruments and much more complex than simply buying a stock. I would only recommend people experienced in trading and finance look into CFDs. Stick to buying real stocks on eToro!
Is eToro Safe?
eToro has been around since 2008 so they have stood the test of time. Funds deposited on eToro are stored securely in tier 1 banks and eToro does operate in accordance with ASIC. I haven’t come across any issues using eToro and they have a good reputation when it comes to security.
Pros and Cons of eToro
- Access stocks and assets from all over the world
- Trade partial shares
- Invest with as little as $50
- Deposit using PayPal, bank transfer, credit card
- Mobile app could be better designed.
- Withdrawal fee of $5 (although this isn’t charged depending on how much you invest).
- Fees for short positions and holding over weekends etc.
- Can’t partially close a stock trade.
- No ASX shares.
eToro is a good addition to the Australian investing space. Being able to invest in US shares without any commissions is a big deal and makes investing in these companies more accessible. eToro now has a local Australian presence and I look forward to seeing them innovate.
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.
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.
eToro AUS Capital Pty Ltd, ABN 66 612 791 803 AFSL 491139. CFDs are highly leveraged and risky, and may not be suitable for all investors. You may lose more than your initial investment. Trading CFDs does not result in ownership of the underlying assets. Copy trading facilities cannot be construed as financial advice. Use these facilities at your own risk and we are not liable for losses incurred. You should obtain your own advice and refer to our FSG and PDS before deciding whether to trade with us