eToro is one of the world’s leading social trading brokers and a multi-asset trading platform used by millions globally. The Israel-based brokerage supports investments in equities, ETFs, commodities, currencies, cryptoassets and smart portfolios. eToro is a global platform regulated in the U.K., Europe, Australia, and the US.
Your capital is at risk
eToro is popular with retail investors interested in social trading (copying other investors' trades) and zero-commission stock trading.
TABLE OF CONTENTS
The company and its environment:
History, Founders, Customer base, Criticism and controversies, Competitors
Our analysis and guides on eToro:
eToro review 2022
Copy Trading, Smart Portfolios
- Legal background:
Countries served, Legal entities, Regulation
Everything we consider important about eToro is collected here. For a more in-depth analysis of the broker’s services, fees and products, click on the links at the end of each paragraph or see our assessment in the eToro review for 2022.
eToro , headquartered in Tel-Aviv, was founded by brothers Yoni Assia and Ronen Assia together with David Ring in 2007 as an online forex broker under the name RetailFX. The company, which later changed its name to eToro, worked its way to a globally recognized brand in just a few years.
Major milestones in the company’s history:
- 2009: eToro launches WebTrader, a cutting-edge, intuitive trading platform, enabling users to trade financial assets online. WebTrader included professional tools for both beginner and advanced traders.
- 2010: eToro releases OpenBook, a social investment platform that allows investors to copy other traders in the network by using the innovative CopyTrade feature
- 2012: the eToro mobile app is released, which includes both the WebTrader and OpenBook. The app runs on Apple or Android smartphones.
- 2016: eToro introduces CopyPortfolios, which groups assets or investors together based on a theme or strategy, such as 5G, cloud computing and renewable energy.
- 2019: eToro starts the launch of crypto trading in the US and introduces zero-commission stock trading. The same year eToro acquired Danish blockchain company Firmo and Delta, a crypto portfolio tracker application company, based in Belgium.
- 2021: eToro announces merger with FinTech Acquisition Corp V (NASDAQ:FTCV), a Special Purpose Acquisition Company (SPAC). The combined company will be named eToro Group Ltd and will be listed on the NASDAQ stock exchange. The same year, eToro acquires Marq Millions, the UK division of e-money and renames it eToro Money. The new financial service provides an account, a Visa debit card, and an app, allowing users to enjoy instant withdrawal and no FX conversion fees. The service is rolled out to customers in the UK.
- 2022: eToro launches stock investments in the US, including fractional share investing with zero commissions in over a thousand stocks and a range of ETFs.
operates as a global business with more than 1,100 employers across 10 offices worldwide. The company reported total commissions of $1.23 billion for 2021, up 105% versus full-year 2020.
Visit eToro’s investor relations page on etoro.com to see detailed investor presentations on the company’s financials.
The founders of eToro are Yoni Assia, Ronen Assia and David Ring.
Yoni Assia acts as CEO of eToro; he is a member of the YPO and was included by Financial News in its prestigious Fintech 40 ranking and by City A.M. as a Fintech 100 top influencer. He holds a B.Sc. in Computer Science and Management and an MSC in Computer Science.
Ronen Assia is the executive director of eToro, in charge of products and engineering. Prior to co-founding eToro, Ronen designed medical devices, household appliances, and desktop and web applications.He holds a BA in Industrial Design from Bezalel Academy of Arts and Design, and an MA in Product Design from the Royal College of Art in London.
David Ring was CTO at eToro until August 2015. In addition to eToro, David founded several successful high-tech companies with total fundraising of $200M. He is currently CTO at IMGN, which he also co-founded. David holds a B.Sc. in electronics from the Technion, an M.Sc. in computer science from IDC, and an MBA in finance from Manchester business school.
The number of eToro customers grew rapidly from the start of the 2010s. The client base increased almost tenfold since 2012, reaching a total of 26.9 million registered users as of December 31, 2021 from more than 100 countries.
Criticism and controversies
The company has made headlines over the years not only with its stellar business numbers but also some controversial practices.
CySEC, the regulator in Cyprus that issued eToro its license to operate in the European Union, fined the broker €50.000 in 2013, claiming organizational weaknesses and an inappropriate operation structure back to 2010.
In 2015, eToro was added to a Quebec blacklist by the local watchdog as an unauthorized trading platform that encouraged residents to invest in binary options via its trading platform.
In January 2021, some of eToro
clients threatened to file a class action lawsuit against the company and a motion to revoke the broker’s license in Cyprus (meaning the EU) after the broker closed all leveraged crypto positions. The move came a few hours after eToro notified its European clients that "due to extreme market volatility in the crypto markets, margin positions for all leveraged crypto positions" should be changed to non leveraged, or they would be closed within four hours.
In the aftermath of the GameStop short selling in January 2021, eToro users claimed that the broker enforced a stop-loss on non-leveraged long positions in the American video game retailer that did not have it initially enabled. Users alleged that the stop-loss caused losses for many investors who had to close their positions on unfavorable terms and ultimately led to a drop in the share price.
The latest round of controversies came in early March 2022, when eToro liquidated its clients’ positions in Russian supermarket operator Magnit (MGNTL.L) at 1 cent per share. Clients received a message from the platform saying that their Magnit stock holdings had been liquidated without their notice due to the market turmoil caused by Russia’s invasion of Ukraine. The company said other Russian-based stocks would also be reviewed for potential liquidation.
Affected customers stormed various social media platforms to vent their anger and frustration over eToro’s move. A few days later the broker apologized and pledged to reimburse its clients for their losses.
eToro is a multi-asset trading platform with special focus on CFDs and zero-commission real stocks and ETFs. As a result, its closest competitors share the same profile.
eToro has the following competitors:
XTB, Trading212, IG, Markets.com
More details are in our eToro alternatives article.
eToro is a leading social trading platform and a zero-commission stock- and CFD broker. We tested their services and wrote about the experience in the eToro review for 2022. It is a powerful, and objective analysis, based on 500 data points. Check it out, it will help you crunch the numbers.
, there is a plethora of financial assets you can invest your money in. eToro is primarily a CFD and forex broker but you can also trade real stocks, ETFs and various cryptos on its platform. Additional features include social trading (CopyTrader) and Smart Portfolios (previously called CopyPortfolios).
If you open a non-leveraged long position in stocks, ETFs and cryptocurrencies, you will trade the real asset. In other words, when you buy equities, ETFs or cryptos without leverage (i.e. leverage is set to one), you will buy real stocks, ETFs and cryptos and not CFDs.
All other trades will be CFDs. What does this mean? If you open:
- a leveraged long position or a short position in stocks, ETFs and cryptos OR
- any position in forex, commodities and indices,
you will be trading CFDs.
Copy Trading at eToro
Social trading is possibly the most distinctive service that eToro
offers. How does social trading work at eToro?
It’s done through the CopyTrader feature, which allows you to automatically copy the portfolio of traders who also trade on eToro. If you don’t have your own investment strategy (yet) or simply don't want to manage your own money, CopyTrader is your thing. You can browse through the profiles of other eToro traders and check the performance of their previous trades on an annual and a monthly level. Their portfolio is public information.
The minimum amount you can invest in one trade is $200. While there is no extra fee for this service, spreads and overnight fees may apply for copied positions.
If you are an active trader and other eToro users copy your trades, you will get reimbursed.
eToro Smart Portfolios
Previously called CopyPortfolios, Smart Portfolios group several assets (i.e. stocks, cryptocurrencies, ETFs, etc.) and even people based on a predetermined theme or strategy. Smart Portfolios allow you to invest in certain broad themes, such as DroneTech, Renewable energy or cryptocurrencies. You can also use Smart Portfolios to invest in a portfolio composed of multiple "star" traders.
The Smart Portfolios service is free of charge, you will only need to pay the commissions and other applicable fees for the assets included in each portfolio.
accepts clients globally, however, there are a few exceptions, including Russia, China, India, Indonesia, Japan, New Zealand, Saudi Arabia and Turkey.
The account opening is super fast and the minimum deposit for most clients is $200. Residents of Australia and the US have to deposit an initial minimum amount of $50.
eToro operates various legal entities globally that serve clients coming from various geographical locations. The availability of investor protection and the amount depend on the entity you belong to:
|Client country||Investor protection amount||Regulator||Legal entity|
|UK||£85,000||Financial Conduct Authority (FCA)||eToro (UK) Ltd.|
|Australia||$1,000,000||Australian Securities and Investments Commission (ASIC)||eToro AUS Capital Limited|
|EEA and other countries||€20,000 + €1,000,000||Cyprus Securities and Exchange Commission (CySEC)||eToro (Europe) Ltd.|
Note that for crypto services there is no specific financial consumer protection.
In addition to the eToro headquarters located in Tel-Aviv, the company has four other main offices in London, Cyprus, New Jersey and Sydney. For more information on these locations, including their address, check out this page.
eToro 's brokering services are provided by :
eToro (Europe) Ltd. (“eToro Europe”), a registered Cypriot Investment Firm (CIF). The company’s registration number is HE20058. eToro Europe is regulated by the Cyprus Securities & Exchange Commission (CySEC) under license number 109/10. eToro (Europe) Ltd is also registered with De Nederlandsche Bank N.V. (DNB) as a provider of crypto services.
eToro (UK) Ltd. (“eToro UK”), company registration no. 7973792, is authorized and regulated by the Financial Conduct Authority (FCA), under firm reference number 583263.
eToro Europe and eToro UK both operate under and comply with the Markets in Financial Instruments Directive (MiFID).
eToro AUS Capital Limited (“eToro Australia”) is the holder of an Australian Financial Services License (AFSL), number 491139 issued by the Australian Securities and Investments Commission (ASIC).
Other legal entities
eToro USA LLC is registered with FinCEN as a Money Services Business.
eToro USA Securities Inc is a member of FINRA and SIPC.
eToro (Seychelles) Ltd. is licensed to deal in securities either as agent or principal. When eToro Seychelles deals with you as an agent, it will use another executing broker, including eToro Europe or a non-affiliated third party, to execute its clients’ orders.
Your capital is at risk
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81.2% 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.
Cryptoasset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
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.
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