- Buy & sell US stocks with zero commission.
- Follow and copy successful traders using eToro CopyTrader.
- Add CFDs and cryptocurrencies to your portfolio if you have a good appetite for risk.
Established in 2007, eToro has become one of the world's biggest social trading platforms. In 2009, it launched its groundbreaking WebTrader platform that enables anyone to trade financial assets online. The company is based in Israel, Cyprus and London, but its Australian operations are regulated by ASIC.
eToro offers such a broad choice of tradable assets, indices, and commodities that reviewing them all in one article would be very challenging — and probably wouldn't help you take your next steps with investing.
In this eToro review, we concentrate on the share trading aspect of their platform. Whether you have questions about copy trading, how their fees work, or what you can invest in, you'll find what you need to make an informed decision below.
Compare eToro against the competition with our share trading comparison.
Inside this review
eToro is not just a share trading platform and Australian users can trade in the following assets.
- US stocks listed on NYSE and NASDAQ.
- Fractional shares in companies with a high individual share price.
- Stock, market index, commodity and currency CFDs (Contracts For Differences).
- Cryptocurrencies including Bitcoin, Ethereum, and Dogecoin.
CFD and cryptocurrency trading is inherently very risky and should not be undertaken without extensive knowledge of how the markets works and a strong appetite for risk. This review will focus mainly on how the eToro platform works for trading US stocks.
You can't use eToro to purchase individual Australian shares listed on the ASX – only US stocks.
How it works
If you want to use the eToro platform you'll first need to open an account. You will be asked to provide your full name and contact details, create a user name and password, and then provide ID documents and your tax file number.
In order to start trading you'll need to deposit at least US $50 into your trading account, using a bank transfer, or your credit card, or PayPal, or a money transfer service such as Western Union. Because eToro trading accounts operate only in USD, eToro will charge you a currency conversion fee of 0.5% for a bank transfer and 1% for all other deposit methods. Once your deposit is confirmed, you can start buying US stocks. The minimum trade size and minimum additional deposit is US $50.
Commodities, Crypto, Forex, Shares
- Trade and invest in top financial instruments, including a wide selection of stocks.
- eToro is regulated by CySec, FCA and ASIC.
- Your funds are protected by industry-leading security protocols.
Commissions and fees
There is no commission charged to Australian users for buying and selling US stocks.
You will, however, have to pay the currency conversion fees mentioned above, plus a US $5 fee each time you withdraw funds from your eToro account.
If you leave your account inactive for 12 months, you will be charged a US $10 inactivity fee for each subsequent inactive month.
Useful trading tools and features
In 2010, eToro released the first-ever social trading platform, CopyTrader. This unique feature allows anyone anywhere in the world to copy other successful traders, making the trading experience more enjoyable and possibly more profitable.
Users can also follow traders and interact with fellow investors on eToro's social news feed.
This focus on social and copy trading has supported its fast growth, and CopyTrader now has over 10 million users worldwide.
Free demo account
When you sign up with eToro, you'll get a free $100,000 practice account. You can use it to make virtual trades to get a feel for how the market works before you start to trade with real money.
The eToro app
You can manage your portfolio from your phone by using the eToro app. Mobile trading is becoming more and more popular as it allows you to buy and sell on the go. Your portfolio will be accessible on all your devices – mobile, desktop, and tablet.
Who eToro is designed for
eToro has millions of users in more than 140 countries. Its platform is ideal for clients with at least a basic knowledge of share trading.
eToro attracts clients who want to invest passively by mimicking other successful users' actions and trade strategies.
Why would you choose eToro over competing platforms?
eToro prides itself on being one of the world's leading social trading platforms and providing plenty of options for investors and traders. Its commission-free fee structure makes it one of the least expensive ways for Australians to trade in US stocks, although there is a small foreign exchange margin to pay.
Pros and cons
- Commission-free trades for US stocks.
- Social interaction with other traders to share advice and experience.
- CopyTrader to replicate the actions of successful traders.
- Easy-to-use website and app makes it easy to trade from anywhere.
- News, analysis and market guides all provided.
- Education tools, including video tutorials, podcasts and Trading School.
- Demo account for virtual trading to help you understand how it works.
- Fractional share and cryptocurrency trading, plus CFDs all available.
- Can only trade US shares, not Australian securities.
- Trading account operates in USD, so you have to pay a currency exchange margin when depositing and withdrawing funds.
- Funds withdrawal fee of US $5.
- Overnight fees and buy/sell spread fees are charged on CFDs.
- Spread fees are charged on cryptocurrency trading.
Is eToro free?
It depends on how you look at it and what you trade. You won't pay a commission on US share trades. However, there are overnight fees and spread fees payable on CFDs and spread fees payable on cryptocurrency trades. There's a US $5 fee for withdrawing funds from your trading account, and because the trading account is held in USD, you'll be charged a foreign exchange margin whenever you deposit or withdraw funds in AUD.
Is eToro safe?
eToro have been operating successfully since 2007 in many countries worldwide and have become synonymous in the investing world. eToro is regulated in Australia by ASIC (Australian Securities and Investments Commission) and numerous other governing agencies overseas. Clients' personal information is protected by SSL encryption and there even an option to activate 2FA (two factor authentication) on your account to prevent unauthorised logins. If you need help or are experiencing difficulties, eToro have email and live chat support.
Is eToro suitable for beginners?
Yes, since you'll be given a free demo account pre-loaded with a virtual US $100,000 that you can use for test trades to get an idea of how securities trading works. There are also plenty of educational tools, including video tutorials, podcasts, and the Trading School.
Does eToro have a cryptocurrency trading option?
Yes, there are currently almost 100 crypto trading options, including the most popular:
- XRP by Ripple Labs
- Ethereum and Ethereum Classic
- Bitcoin cash
- Stellar Lumens
Are CFDs risky?
It's essential to understand how CFDs work before you join other traders, because it is a high risk trading activity. eToro says that 68% of its retail investor accounts lose money when trading CFDs on the platform.
Each online securities trading platform has its defining features, and it's important to decide which one is best for you. Alternatives to eToro include:
- SelfWealth. A flat fee of $9.50 per trade for US and Australian shares.
- Stake. Trade US shares without paying commission. Also, trade Australian listed shares.
- Superhero. Trade ASX shares at $5 per transaction at zero commission. Trade US shares with $0 brokerage.
- CommSec. Trade ASX and global shares, with US market transactions starting at US $19.95 for trades up to US $5,000.
Quickly compare eToro versus similar brokers for tradable markets and assets, account funding options, minimum deposit amounts, fees, and more with our helpful side-by-side comparisons.
- CommSec vs eToro
- eToro vs CMC Markets
- eToro vs Bell Direct
- eToro vs Sharesies
- eToro vs Stake
- eToro vs Superhero
- nabtrade vs eToro
- SelfWealth vs eToro
eToro's commission-free trading in US stocks is certainly not unique, but it has several other features that make it stand out. It has positioned itself as "the world's leading social trading platform", but alongside its active social channels and CopyTrader it also provides a practical way to trade in US stocks, fractional shares, CFDs, and cryptocurrencies from a single account.
Their foreign exchange margin and US $5 funds withdrawal fee are annoying, but probably won't bother serious investors and traders who want to build their US portfolio or engage in short-term trades and then re-invest. eToro is also suitable for beginner traders who can practice with a demo trading account.
Disclaimer: eToro AUS Capital Limited ACN 612 791 803 AFSL 491139. OTC Derivatives are leveraged financial products and considered speculative. OTC Derivatives may not be suitable for all investors. You don't own the underlying assets. You risk losing all of your investment. This information is general only and has been prepared without taking your objectives, financial situation or needs into account. Consider our Product Disclosure Statement (PDS and TMD). See full disclaimer