• pjbphilbellamy

eToro Review for UK Share Trading & Copying

Updated: Jun 4

I have now completed my “live”, real world testing of eToro, from both the perspective of being a trader, and a copier, and the results were pretty impressive!

Read on to find out more.

Etoro logo image

eToro Origins

eToro are a global online financial trading platform and multi asset broker founded in 2007 by David Ring and the Assia Brothers. It was originally called Retail FX by the founders.

14 years later eToro has grown to offering retail investors Stocks trading, Commodities trading, Forex trading, CFDs trading, Social trading, Indices trading, Cryptocurrency trading, Index Based Funds trading, and Exchange Traded Funds (ETF) trading.

However, for the purposes of this review, I am only going to discuss the plain vanilla style of trading stocks (equities) from the UK markets, as that is what I have tested. I will also assume that you have some prior experience of buying and selling shares through brokers or platforms such as IG, II, Fidelity or Hargreaves Landsdown etc.

Buying Stocks on eToro

As eToro is a multi-asset platform they are able to offer investors zero commission stock trading on over 2000 stocks and shares from 17 financial exchanges from all over the world, and that includes the UK’s FTSE 100 and FTSE 250, which is great news for traders. As an added benefit, they also don’t charge the 0.5% stamp duty fee, which can save frequent traders lots of money.

Zero Commission Stocks on eToro

eToro offer Zero commission on stocks, this means that when you buy and sell stocks on the eToro web platform or mobile app no extra fees are charged on the buy or sell orders. Most other brokers add a transaction charge for executing a trade, so this is a huge benefit of buying shares with eToro.

Stamp Duty and Financial Transaction Tax when Trading with eToro

When trading you must make sure you are tax compliant with local tax authorities. eToro takes the cost of stamp duty and financial transaction tax for applicable registered clients. This can mean a potential saving of 0.5% for eToro clients in the United Kingdom, and residents in Ireland can save up to 1%.

eToro is able to offer very competitive offers like zero commissons, and no tax due to the size of their customer base. With over 20 million eToro users worldwide, the volume of transactions that eToro process enables them to pass savings onto their users and remain very competitive when compared to other brokers.

Minimum Transaction Value

eToro has a low minimum trade requirement of $50 USD which is around £36 GBP depending on the current currency conversion rate. eToro also has no overnight fees on non-leveraged stocks. You can create an account from just £200/$200.

You own the Underlying Stock

With eToro you are able to trade stocks where you actually own the underlying asset. This is important as some brokers are only able to offer CFD trading on stocks and shares.

When you buy a stock it is logged on the eToro platform. You will not be issued a stock issue certficate or given voting rights, but if dividends are issued by that stock and you forfill the criteria (own them 2 days before XD date) your eToro balance will be updated with the dividend amount.

Summary of eToro Stock Trading Platform

I have used all the usual main stream brokers in the UK for my historic share dealing, and I can honestly say that the eToro experience and system is exceptional, well designed layout, easy to trade with and easy to see what’s in your portfolio and watch lists.

There are loads of self-help videos and pages, and the community is also on hand to answer any questions you may have. All in all, it is a great way to trade, and will save you money on your dealing, especially if you are a frequent trader who likes to open and close positions intraday / week or month.

The most significant downside is that the UK stocks currently available are only from the FTSE 350, so there is no scope for trading UK small companies yet.

eToro Copy Trading and Stock Trading

This is a great USP of eToro, and is where stock trading and social media join together to create great opportunities.

When you open an account with eToro, you can also use eToros well known social trading and copy trading feature when investing in UK company Stocks and shares.

See an example of my copy trader profile here Philip Bellamy @copycatcash – eToro

graph of monthly share price growth
Growth in share prices

Copy trading is where you can follow other traders and investors on the eToro platform using eToros proprietary CopyTrader trading platform features.

Copy trading is simply a form of social trading. Using these copy systems, users can view the stock trading performance and copy trades of successful top performing investors on the eToro platform. You can browse through a trader’s history and find a popular investor that matches their trading strategy and requirements, and then simply copy them at the press of a button!

This is a great facility for either new investors, or those investors who don’t have much time, and want to leave the research and due diligence to someone else. You can copy up to 100 people, so you can spread your cash around to mitigate risk and diversify your overall portfolio.

Once you copy an eToro trader all of their trades are copied to your account. Any future buy or sell orders are automatically copied on your eToro account.

Are eToro safe?

When choosing a broker, the administrative body and regulatory status of the broker is very important. Established in 2007, and in operation for 14 years eToro’s head office in Cyprus.

eToro (UK) Ltd. are overseen and regulated by the FCA and maintains a FCA license to offer eToro services in the EU European Union. Clients in the UK have investor protection ranging from £85,000 - £1,000,000.

Features of eToro

  • Virtual Portfolio, or what is commonly known as a Demo Account

  • API Trading

  • Social Trading available

  • Copy Trading available

  • StopLoss

  • Trailing Stops

  • TakeProfit Orders

  • Offline-Trading

  • eToro offers Advanced Financial Chart comparison tools

  • eToro offers Research-backed analysis on financial markets and investments from top analysts

  • The eToro platform is available to use on multiple devices inclding IOS devices like iPhones and iPads, Android devices and online through a Web Browser.

  • eToro offers an easy to use trading platform with tools for both New Traders and Seasoned Experts

  • eToro users benefit from using the eToro platform in over 5 different languages

While trading in financial investments, losing money rapidly due to trading Stocks, Commodities, Forex, CFDs, Social Trading, Indices, Cryptocurrency, Index Based Funds, Exchange Traded Funds (ETF) is not uncommon. Only take the risk of trading when you understand that your invested capital is at risk any time due to market volatility. eToro also clearly state on their platform that 67% of retail investor accounts lose money when trading CFDs with this provider.

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