eToro Australia Review 2022

eToro Australia Review 2022

Daniel Chan

January 3, 2022

Cryptocurrency

What is eToro Australia?

eToro is a popular broker established in 2007, offering Australian investors access to a range of markets within the one account. Users can trade stocks, ETFs, cryptocurrency and CFDs (forex, commodities, indices, stocks, ETFs and crypto). The key aspect that sets eToro apart from its competitors is their focus on 'social trading'; they have a social media platform allowing users to interact with other traders, and even copy popular traders automatically move for move. This makes eToro a great place for beginner investors and traders to learn.

  • Web Address: www.etoro.com
  • Minimum Deposit: $50
  • Mobile App: Yes
  • Deposit Methods: Bank Transfer, Credit card, Debit card, PayPal, POLi
  • Base Currency: USD
  • Withdrawal Fee: $5
  • Products Offered: Stocks, ETFs, cryptocurrencies, CFDs (forex, commodities, indices, stocks, ETFs & crypto)
  • Forex Currencies: 49 pairs
  • Forex Leverage: Up to 30:1
  • Stock Markets: NASDAQ, NYSE & 15 others
  • Cryptocurrencies: BTC, ETH, BCH, XRP, LTC, ADA & 24 more

eToro AUS Capital Ltd ACN 612 791 803 AFSL 491139. OTC Derivatives are speculative and leveraged. Capital is at risk. See PDS.

My Overall Thoughts on eToro Australia

eToro is one of my favourite brokers with its modern interface, social trading, and wide array of investment instruments, even including CFDs for cryptocurrencies, which is hard to find in Australia. It's easy to see how eToro has become so popular not just in Australia, but around the world. These are my 3 top reasons for using eToro:

1) Social trading makes eToro a fun place to trade. You can view, post and comment on the latest trading news or speculations with others in the eToro community, and the best feature is CopyTrader. With CopyTrader, you can automatically copy the trades of any top-performing trader you like, replicating their trading in your portfolio. This means that even if you are a beginner trying to learn the ropes, you can still make smart trading decisions based on others' expertise.

2) eToro offers a huge range of investment markets, so you will definitely find some that are suited for you. They have 17 stock markets from around the world, including the most popular NASDAQ and NYSE, 49 forex trading pairs, indices, commodities and even 30 cryptocurrencies, which are not commonly found on other brokers.

3) You can trade CFDs on eToro, with leverage of x30 on major currency pairs, x20 on gold and major indices, x5 on shares and x2 on cryptocurrency. The cryptocurrency CFDs are especially useful because it means you can go short (if you think the value of the coins are going to decrease) and make money in that way, which is not possible on regular cryptocurrency exchanges. 

One downside for Aussie users is that your AUD deposits need to be converted to USD to be able to use the platform, and a currency conversion fee is charged. Of course, the benefit is being able to access global stock markets, forex and crypto, with CFDs and leverage on an easy-to-use interface.

eToro AUS Capital Ltd ACN 612 791 803 AFSL 491139. OTC Derivatives are speculative and leveraged. Capital is at risk. See PDS.

Key Features & Advantages of eToro

eToro's popularity in Australia - as well as the rest of the world - is due to the many features offered on the platform. Here are some of the main features and advantages that come with choosing eToro.

Negatives and Disadvantages of eToro

Despite all the great features of eToro, there are a few points that are not so great. To find out more information about these, click on the jump links below.

eToro AUS Capital Ltd ACN 612 791 803 AFSL 491139. OTC Derivatives are speculative and leveraged. Capital is at risk. See PDS.

What Services does eToro offer?

eToro has a lot of great services, which is why it has attracted so many Australian customers. Let's take a look a closer look at the best it has to offer.

0% commission when stock trading:  eToro does not charge any commission, markup, ticketing fees or stamp duty on stocks on ETFs. This is a great incentive to trade with eToro, since more of your money can go towards your investments.

Access stocks from USA and 15 other global markets:  On eToro you can trade stocks from 17 different exchanges around the world, including the NYSE, NASDAQ and London. The interface is easy to use, and you can search specific stocks, or browse by Industry or Exchange.

User-friendly interface:  eToro has a simple and easy-to-use interface that is great for beginners and advanced traders alike. The home page (shown below) has key market prices and graphs scrolling along the top, social media news feed below, and the biggest movers from your portfolio and watchlists on the right. The menu on the left is straightforward - click Discover to begin investing in the markets of your choice.

eToro AUS Capital Ltd ACN 612 791 803 AFSL 491139. OTC Derivatives are speculative and leveraged. Capital is at risk. See PDS.

Mobile app for iOS and Android:  eToro has developed an app for your mobile device to help you stay on top of your investments, anywhere and anytime. On Google Play store, it shows that eToro's app has over 10 million downloads, and is rated 4.3 stars from 95 000 reviews. The app is easy to use, you can check your watchlist, portfolio, news feed and find other traders that you can copy. You can even run the Demo account so you can practise trading with $100 000 virtual money for free.

Demo account - practise trading with $100 000 free virtual money:  eToro has an excellent feature with the Demo account, which you can easily toggle back and forth with the click of a button. You have access to $100 000 free virtual money that you can practise trading with at your own pace, with zero risk. You can follow each instrument's real-time trends with advanced analysis tools, experiment with different leverage amounts, set up Stop Loss and Take Profit orders, and connect with top traders around the world.

eToro AUS Capital Ltd ACN 612 791 803 AFSL 491139. OTC Derivatives are speculative and leveraged. Capital is at risk. See PDS.

Trade 49 forex pairs:  You can trade a number of currencies on eToro, such as USD, EUR, AUD, GBP, NZD, JPY, CHF, and more, with 49 trading pairs currently available. You can easily sell or buy by clicking the S or B next to the forex pair you want, and a popup window appears. You can choose the amount you want to buy, as well as setting the amount of leverage, Stop Loss orders and Take Profit orders. Please remember that this is a CFD trade, and with higher leverage comes higher risk. I do not recommend trading with leverage unless you are an experienced trader, or you are using the Demo account.

30 different cryptocurrencies available:  Although eToro is not a specialised crypto broker, it manages to offer 30 of the most popular coins, which is impressive. Some of the top coins offered are BTC, ETH, XRP, ADA, BNB and DOGE. What sets eToro apart from crypto exchanges is that not only can you buy the actual coin, but if you prefer you can also trade crypto CFDs. 

A CFD stands for 'contract for difference'. Simply put, if you buy a crypto CFD on eToro and the price of that particular asset rises, they will pay you the difference. Conversely, if it falls you will owe them the difference. You never own the underlying cryptocurrency, you just have a contract with the broker for paying the difference in value from the time of buying to the time of selling. It is a very popular financial instrument and is often leveraged. You can use this to 'short' crypto as well - let's say you believe Bitcoin is going to decrease in value. You can make money using crypto CFDs which is not possible when you are just buying and selling a coin on a regular exchange. You can also margin trade with x2 leverage on crypto CFDs.

Crypto staking - earn interest on your coins:  On eToro you can stake your cryptocurrency, which is a process where you earn rewards (paid in the cryptocurrency you are staking) for holding them, similar to the way you earn interest in a bank account. You can currently stake Cardano (ADA), Tron (TRX) and Ethereum (ETH), and eToro is planning to support more cryptoassets in the future. Rewards are paid automatically each month and users are eligible for staking as long as their coins are held on eToro's trading platform.

eToro AUS Capital Ltd ACN 612 791 803 AFSL 491139. OTC Derivatives are speculative and leveraged. Capital is at risk. See PDS.

Trade CFDs (forex, commodities, indices, stocks, crypto):  Experienced traders will already know what a CFD is, but for those that are new to the trading game, I will give a brief explanation. A CFD is a 'Contract For Difference'. In layperson's terms, if you buy a CFD on eToro and the price of the chosen asset rises, they will pay you the difference. On the other hand, if the price drops, then you need to pay them the difference. With CFDs, you don't own the underlying asset, you just have a contract with the broker for paying the difference in value from the time of buying to the time of selling. CFDs are great because you can bet on the prise to rise OR fall, which you cannot do if you are directly buying the asset. eToro offers CFDs for currencies, commodities, indices, stocks, ETFs and cryptocurrencies.

Margin trading with up to x30 leverage:  eToro offers margin trading on its CFDs. If you are not familiar with the term margin trading, it involves using capital borrowed from a broker to invest in an asset. Margin trading means you can access larger sums of capital and leverage your position. You have the opportunity to make larger profits on successful trades, but you must be careful, because your potential loss is also greater. Margin trading is not recommended for the inexperienced, unless you are using a Demo account.

When you margin trade, you contribute a portion of the total order value and the borrowed amount is used to create leverage. Leverage of x10 means that your buying power is 10 times your initial amount. Therefore, if you put in $1000 of your own money, with x10 leverage, you are borrowing $9000 from eToro, for a total of $10 000.

eToro offers different maximum leverage amounts based on the asset, as listed below:

Major currency pairs: x30 

Minor currency pairs, Gold, Major indices: x20

Minor indices, Commodities (excluding gold): x10

Shares and other underlying assets: x5

Cryptocurrencies: x2

eToro AUS Capital Ltd ACN 612 791 803 AFSL 491139. OTC Derivatives are speculative and leveraged. Capital is at risk. See PDS.

CopyTrader - automatically copy trades of top-performing investors:  eToro has a unique feature allowing users to copy trades from successful investors. This is great for beginners that are still learning the ropes, investors that are too busy to monitor the markets, or experienced traders that want to improve their returns. It is easy to do, you choose which trader you want to copy, and then eToro automatically replicates their trading in your own portfolio.

Past performance is not an indication of future results.

CopyPortfolio - invest in leading, ready-made portfolios:  With eToro you can invest in a balanced, professionally researched portfolio, focusing on market segments you can understand and to which you can relate. eToro's portfolios are based on elements derived from their values of research, knowledge, methodology, risk management and technology. There are no management fees involved when using this feature.

Social media platform allowing interaction with other traders:  eToro aims to make social media a part of trading, and it has done this by implementing a News Feed within the platform. This allows you to connect and interact with other traders in the eToro community, seeking advice and learning from others' trades. This is a great feature that makes eToro stand out from other brokers.

eToro AUS Capital Ltd ACN 612 791 803 AFSL 491139. OTC Derivatives are speculative and leveraged. Capital is at risk. See PDS.

What I Don't Like About eToro

Currency conversion fee from AUD to USD:  For Aussie users, when you deposit AUD into the eToro trading account, there is a currency conversion fee to change your funds into USD. If you use bank transfer, the conversion fee is 50 pips (deposit and withdrawal), and for credit/debit cards, POLi and PayPal, the conversion fee is 100 pips for deposit and 50 pips for withdrawal. For AUD/USD conversion, 50 pips equates to approximately 0.7% of the deposit/withdrawal amount, and 100 pips is about 1.38% of the deposit amount.

Complex fee structure:  There are many different fees charged on eToro and it is not clear or straightforward. There are currency conversion fees, variable trading fees (dependent on asset), CFD (overnight) fees, withdrawal fees and inactivity fees. 

Limited range of cryptocurrencies:  eToro is not a specially built platform for trading cryptocurrencies, and that's why its range of 30 coins is limited compared to the best Australian crypto exchanges. If you are a dedicated cryptocurrency investor, then you may find some other platforms to be more suitable. Swyftx is my number one choice for cryptocurrency enthusiasts, with over 270+ different coins, a Demo trading mode, and $20 free BTC to start you off. Digital Surge (250+ coins) and CoinSpot (280+ coins) are also great options to consider. 

eToro AUS Capital Ltd ACN 612 791 803 AFSL 491139. OTC Derivatives are speculative and leveraged. Capital is at risk. See PDS.

eToro Fees

eToro charges a number of fees that I will cover in detail.

eToro Deposit Fees

It is FREE to deposit AUD into your eToro account, but you will incur a currency conversion fee as the funds need to be in USD to be able to trade on the platform. The currency conversion fee for Bank Transfer is 50 pips (which equals approximately 0.7% fee) and the conversion fee for Credit/Debit cards, PayPal and POLi is 100 pips (approximately 1.38% fee).

eToro Trading Fees

There are different fees based on the asset you are trading. 

Stocks: 0% fee

For the following trading instruments, the fee is built into the spread. The spread is the difference between the buy and sell price. For example, Bitcoin has a spread of 0.75%. This means if you buy it and sell it immediately, you will lose 0.75% in fees. One way you could look at it, is that the fee per transaction is half of the spread.

Cryptocurrency: Spreads start from 0.75% for Bitcoin. To see spreads for all 30 coins, click here.

Forex CFD: Spreads start from 1 pip for EUR/USD, AUD/USD, USD/JPY. For full list of spreads, click here.

Commodities CFD: Spreads start from 2 pips for copper. For a full list of spreads, click here.

Indices CFD: Spreads start from 0.75pts for SPX500. To see the various spreads, click here.

Stocks & ETFs CFD: Spread of 0.09%

Cryptocurrency CFD: Spreads start from 0.75% for Bitcoin. To see spreads for all 30 coins, click here.

Please note that CFD positions that stay open overnight incur a small fee, relative to the value of the position. This is essentially an interest payment to cover the cost of the leverage that you use overnight. The fees are charged in USD, per night, per unit, and a full list can be found here.

eToro Withdrawal Fees

Withdrawals incur a flat fee of $5, with a minimum withdrawal amount of $30. There is also a currency conversion fee of 50 pips (which is approximately 0.7% fee).

eToro Crypto Transfer Fees

To transfer cryptocurrency from eToro, a fee of 0.5% will be charged, with a minimum fee of $1 and maximum fee of $50.

Other eToro Fees

Inactivity Fee: After 12 months with no login activity, eToro will charge $10 per month as an inactivity fee on any remaining available balance. No open positions will be closed to cover the fee.

CopyTrader Fee: There is no fee to use the CopyTrader feature.

CopyPortfolio: There is no management fee to use the CopyPortfolio feature. 

Pros and Cons of eToro

Pros
  • User-friendly platform with access to a wide range of investment instruments
  • Stock trade on 17 markets (incl NYSE & NASDAQ) with 0% fee
  • Invest in 30 cryptocurrencies directly or using a CFD
  • Social Trading means you can interact with others and even copy their trades automatically
  • Demo account where you can trade risk-free with $100 000 virtual money
Cons
  • Currency conversion fee for deposits and withdrawals
  • Complex fee structure
  • Doesn't offer as many cryptocurrencies as dedicated crypto exchanges

eToro AUS Capital Ltd ACN 612 791 803 AFSL 491139. OTC Derivatives are speculative and leveraged. Capital is at risk. See PDS.

Verdict

eToro is an excellent broker that has built an easy-to-use platform for beginner investors and advanced traders alike. They know how to look after their users, with a wide range of investment options, social trading, CopyTrader and CopyPortfolio and even a Demo account where you can trade risk-free using $100 000 virtual money. For Aussie investors that want to access global stock markets, forex trading and CFDs, eToro is a great platform.

However, if you are interested in cryptocurrency trading in particular, and not the other markets, I would suggest you use a dedicated Australian crypto exchange. eToro is not built specifically for cryptocurrency; this is reflected in their limited range of 30 coins and their high fees. The fee for Bitcoin transactions is 0.75% but for other coins it ranges from 1.9% (for Ethereum) up to 5% (for XTZ). eToro also charges a currency conversion fee from AUD to USD when you deposit, which will add another 0.7% - 1.38% on top (depending on deposit method). Compare this to Swyftx, an Australian crypto exchange that charges only 0.6% per trade, has no deposit fees, and $20 free Bitcoin on sign up, and you can see how eToro falls behind. Another alternative is Digital Surge, with 0.5% trading fees and offering over 250+ cryptocurrencies.

eToro AUS Capital Ltd ACN 612 791 803 AFSL 491139. OTC Derivatives are speculative and leveraged. Capital is at risk. See PDS.

Frequently Asked Questions

Is eToro legitimate?

Yes, eToro is a legitimate broker that has been established since 2007. In Australia, it is regulated by ASIC, and you can read about eToro’s success in the FinTech industry from top-tier publications, such as CNBC, TechCrunch, and The Telegraph. 

Is eToro safe?

Yes, eToro is a safe broker to use. On eToro, clients’ funds are kept secured in tier 1 banks, and all of their personal information is guarded under SSL encryption.

Can eToro be trusted?

Yes, eToro is a trustworthy broker founded in 2007 and regulated by ASIC. Their customer support team is available 24 hours a day on trading days, meaning eToro clients always have someone to turn to if they encounter a problem or require assistance.

Can eToro be hacked?

eToro is a safe platform, but there is always a possibility it can be hacked, no matter what security protocols are in place. With eToro, clients’ funds are kept secured in tier 1 banks, and all of their personal information is guarded under SSL encryption.

Can eToro be used in Australia?

Yes, eToro can be used in Australia and it is regulated by ASIC.

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). See full disclaimer.

Marketplacefairness.org provides all its content for informational purposes only, and this should not be taken as financial advice to buy, trade or sell cryptocurrency or use any specific exchange. Please do not use this website as investment advice, financial advice or legal advice, and each individual's needs may vary from that of the author. This post includes affiliate links with our partners who may compensate us. 

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