Are margin interest rates low at eToro?

Personally tested

Data-driven

Independent

Are margin rates low at eToro?

Margin trading - borrowing money from your broker to buy more assets than you could otherwise afford - is popular, but it's not available at all brokers, and margin interest rates can vary widely.

You're looking in the right place, though, as eToro offers margin trading and has low margin rates. Read on for details, or simply click to open your eToro account.

eToro is great for margin trading

Gyula Lencsés, CFA

Want to trade big with little money? I tested eToro's margin trading conditions for you using real money, and I liked what I saw:

eToro's margin rates are low.
Stock and ETF trading fees at eToro are low.
Margin trading involves borrowing money from your broker to increase your exposure.
Are there better margin trading platforms than eToro? Check our toplist.

Before we begin, let's see if eToro is available in your country:

Yes, you can open an account at eToro if you live in the United States!

Visit broker
eToro USA LLC; Investments are subject to market risk, including the possible loss of principal

eToro

4.7/5

Minimum deposit

$10

Stock fee

Low

Index CFD fee

Average

Withdrawal fee

Account opening

1 day

Visit eToro

eToro USA LLC; Investments are subject to market risk, including the possible loss of principal

Want to unlock your perfect broker match?

eToro margin rates are low

So what are margin rates? Margin rates, sometimes called debit rates, refer to the interest rates charged by brokers when you borrow money to buy and sell stocks, ETFs (exchange-traded funds) or options on margin.

Each brokerage sets its own margin rates, but generally margin rates are closely tied to the benchmark interest rate of the currency in which you borrow. If your broker lends you USD, the margin rate will most often be the US interest rate plus a markup that the broker adds.

Brokers often have a tiered system for margin rates, depending on the amount you borrow: the more money the broker lends you, the lower the margin rate is. Some brokers also charge different margin rates for different types of trading accounts. Typically, a standard account will have higher rates than a premium account. The rates BrokerChooser quotes refer to standard accounts.

Most brokers calculate the margin rate on a daily basis, but the amount you owe them is charged to your account once a month. Brokers are required to disclose their margin rates; some do so citing an annual percentage rate while others will display it in swap points. Whichever it is, just keep in mind that margin rates can change rapidly without advance warning from your broker.

Margin rates at eToro
Broker	USD margin rate	USD margin rate class
eToro	8.3%	Low
Trading 212	-
XTB	-

Margin rates on short selling

Margin rates can also apply when you engage in short selling. Short selling means that you borrow shares from your broker and sell them with the expectation that the share price will decline. You will then repurchase the shares at a lower price, return them to the broker and pocket the price difference as your profit.

The margin rate for short selling is the interest rate charged by the broker on the borrowed funds used to facilitate the short sale. It is similar to the margin rates for simple stock, ETF or options trading.

Visit broker
eToro USA LLC; Investments are subject to market risk, including the possible loss of principal

Stock trading fees are low

Margin rates are the single most important item that influences your margin trading profits, but trading fees and other regular or one-off charges can also impact your overall trading costs.

eToro has low stock and ETF trading fees overall. See details of this and other fees charged by eToro and some close competitors in the table below. (Trading fees cited here refer to a $2,000 trade.)

Stock trading fees and other charges at eToro
Broker	US stock fee	UK stock
eToro	$0.0	$0.0
Trading 212	$0.0	$0.0
XTB	$0.0	$0.0

Margin trading in the US

Trading on margin means borrowing money from your broker to buy stocks, ETFs or options. But why would you do that? Basically, it increases your 'buying power', allowing you to open larger trading positions than you could otherwise afford with just the cash in your brokerage account. Just mind the risks, as any losses will also be magnified in the same way that gains are amplified.

At brokers regulated in the US, you need to open a margin account to be allowed to trade on margin. The mandatory minimum deposit for margin accounts is $2,000. Margin trading is governed by the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA) and Regulation T, also known as Reg T, a rule by the US Federal Reserve Board.

Under Regulation T, the initial margin for most stocks is 50%. This means that you must put up at least 50% of the purchase price in cash, while the remaining 50% can be borrowed from the broker. Brokers can only require initial margins that are higher than this.

Reg T also stipulates that short selling requires a deposit equal to 150% of the value of the position at the time the short sale is executed. This 150% includes the full value of the short sale (100%), plus an additional margin requirement of 50%.

FAQ

What is the margin rate at eToro?

The level of margin rates used by eToro depends on a number of factors. The rate will vary depending on the currency in which you borrow the funds as well as the amount of money that yu borrow from eToro.

How are margin rates calculated at eToro?

eToro calculates margin rates by using a reference benchmark rate for each currency and adding a markup. The reference rate is usually in line with the interest rate of the currency in question. The size of the markup depends on the type of account you have and the amount of funds you borrow from eToro.

How often does eToro change margin rates?

eToro can change the margin rate at its own discretion but there is no fixed or standardized frequency for these changes. eToro may adjust margin rates based on various factors such as market conditions, regulatory changes, risk management strategies, and business decisions. It is possible that the margin rate will change on your outstanding loan if you keep a position open for a longer period of time.

Visit broker
eToro USA LLC; Investments are subject to market risk, including the possible loss of principal

Check out this short video for a behind-the-scenes peek into how our experts personally test and evaluate brokers.