ExpertOption, the Only Binary Options Trading Broker with Social Trading Capability

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Top Binary Options Broker 2020!
    Perfect For Beginners and Middle-Leveled Traders!
    Free Education How To Trade!
    Free Demo Account!
    Big Sign-up Bonus!

  • Binomo
    Binomo

    Good Choice For Experienced Traders!

Best Options Trading Platforms

The best options brokers have a wealth of tools that help you manage risk

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Options trading has become extremely popular with retail investors since the turn of the 21st century. Our best options brokers have a wealth of tools that help you measure and manage risk as you determine which trades to place. They also include valuable education that helps you grow in sophistication as an options trader.

Best Online Brokers for Options Trading in April 2020:

  • tastyworks: Best Options Trading Platform
  • tastyworks: Best Broker for Advanced Options Traders
  • tastyworks: Best Broker for Mobile Options Traders
  • E*TRADE: Best Broker for Beginning Options Traders
  • eOption: Best Broker for Low-Cost Options Trading

Best Options Trading Platform, Best for Advanced Options Trades, and Best for Mobile Options Traders: tastyworks

  • AccountMinimum: $0
  • Fees: $0.00 stock trades, $1.00 to open options trades $0.00 to close

Tastyworks says that more than 90% of the trades placed by its customers are derivatives, so they naturally spend their time designing a lot of tools specifically for options and futures traders. Everything is designed to help traders evaluate volatility and the probability of profit. Tastyworks’ entire platform is geared towards making decisions and taking action. Tastyworks opened its virtual doors in 2020, so it isn’t saddled with legacy systems that bog down many of the older online brokers. This has helped it tremendously in keeping the options trading experience to the essentials. Tastyworks’ executions are fast and the costs are low, with commissions capped for opening orders for options on equities and futures at $10 per leg.

Watchlists are a key component of the tastyworks platform, and they are the same on mobile, web, and download. The look and feel of the mobile platform is very similar to the desktop versions, though you’ll find price wheels and ways to define trades that minimize the possibility of making a mistake. As you build a position from a chart or from a volatility screener, a trade ticket is built for you. There’s also a video viewer embedded so you can keep an eye on the tastytrade network. Though a newcomer to options trading might be initially uncomfortable, those who understand the basic concepts will appreciate the content, features, and focus apparent throughout tastyworks’ platforms.

All of the tools you’ll need for analyzing and trading derivatives are built into the platforms.

The charting capabilities are uniquely tuned for the options trader. If you have multiple positions on a particular underlying, you can analyze the risk profiles of the combined position.

There are hours of original video from tastytrade every weekday, offering up-to-the-minute trading ideas, plus a huge library of pre-recorded videos and shows.

Newcomers to trading and investing may be overwhelmed by tastyworks at first.

There is no fixed income trading (outside of ETFs that contain bonds) for those who want to allocate some of their assets to a more conservative asset class.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Top Binary Options Broker 2020!
    Perfect For Beginners and Middle-Leveled Traders!
    Free Education How To Trade!
    Free Demo Account!
    Big Sign-up Bonus!

  • Binomo
    Binomo

    Good Choice For Experienced Traders!

Any additional portfolio analysis beyond profit and loss requires setting up a login on a separate site, The Quiet Foundation, which is also part of the tastytrade empire.

Best for Beginning Options Traders: E*TRADE

  • AccountMinimum: $0
  • Fees: No commission for stock/ETF trades. Options are $0.50-$0.65 per contract, depending on trading volume.

New options traders need some help in understanding how trading derivatives can help improve portfolio returns. E*TRADE’s more advanced platforms are elegantly designed and guide you along the way. When you graduate to options and derivatives, the Power E*TRADE website and mobile app can help you learn. The Power E*TRADE site and app can be set up to put the functions you use most often front and center so you don’t have to dig around for them. The platform has all the features inherited from E*TRADE’s acquisition of OptionsHouse technology, which includes a wealth of helpful educational resources for the developing options trader. Watchlists are integrated across E*TRADE’s platforms, and the full range of tradable assets is accessible on the mobile apps. The workflow is very smooth on the mobile apps. We also found that using Power E*TRADE on a tablet is quite pleasant.

Mobile apps are extremely well laid-out and easy to use and are among the most comprehensive and extensive apps tested.

Spectral Analysis on Power E*TRADE is a visually stunning tool that helps you visualize maximum profit and loss for an options strategy and understand your risk metrics

You can test strategies using the paper trading capabilities of E*TRADE Pro’s desktop platform, which uses delayed data so you won’t think you’re placing real trades.

On all platforms, you’ll find a ubiquitous trade ticket with streaming real-time data.

Tiered commission schedule for options trades, charging $0.65 per contract for less frequent traders and $0.50 for those who place more than 30 options trades per quarter.

Investors who would like direct access to international markets or to trade foreign currencies should look elsewhere.

You cannot consolidate your externally-held accounts to form a complete picture of your net worth on E*TRADE.

Best for Low-Cost Options Trading: eOption

  • Account Minimum: $0
  • Fees: $0 per stock/ETF trade, $1.99 base per leg plus $0.10 per contract for options trades

eOption charges $1.99 per leg for options trades, but the per-contract fee is significantly lower than its competitors, making it great for heavy options traders. eOption also offers commission-free stock and ETF trading so those who are options-oriented traders but also want access to other assets at a low cost will have no issues here. Clearing and exchange fees, typically a fraction of a penny per share, are spelled out on the order confirmation screen and are passed through to customers. eOption also scored highly for its relatively low margin rates.

eOption offers great value for frequent options traders.

The browser-based eOption Trader platform is easy to use.

Newsletter subscribers can auto-trade their alerts.

Limited education offerings.

News feeds are limited.

Any OTCBB (penny stock) trades must be made with a live broker.

Other Options Considerations

The commission structure for options trades tends to be more complicated than its equivalent for stock trades. Until the commission cuts that swept the industry in the fall of 2020, most brokers charged a fee for each leg of an options spread plus a commission per contract being traded. The per-leg fees, which made 2- and 4-legged spreads expensive, have been eliminated industry-wide, for the most part. We are also seeing some brokers place caps on commissions charged for certain trading scenarios.

Investors with fairly large portfolios can also take advantage of portfolio margining at some brokers. This is a practice that assesses the total risk inherent in a portfolio that contains stocks and derivatives. Investors with large portfolios can use portfolio margining to reduce the size of the margin loan.

What Kind of Options Trader Are You?

The first and most important piece of information to consider before selecting an options trading account is what kind of trader you are. What is your trading style and risk appetite? Which tools would you like to have handy?

Options are complex products to understand and trade. All of the brokers listed above allow customers to build complex options positions as a single order. Some brokers, such as Vanguard, only allow one position per order, leaving it to the individual trader to place multiple orders one at a time to create a combination position. Merrill Edge lets you place two-legged spreads, but anything more complex will require an additional order.

If you’re just getting started with options trading, the quality of education and help offered by your broker is important. Frequent traders and those who trade a large number of contracts will be more sensitive to commissions and fees, so check out your prospective broker’s charges and make sure you understand them.

Methodology

Investopedia is dedicated to providing investors with unbiased, comprehensive reviews and ratings of online brokers. Our reviews are the result of months of evaluating all aspects of an online broker’s platform, including the user experience, the quality of trade executions, the products available on its platforms, costs and fees, security, the mobile experience and customer service. We established a rating scale based on our criteria, collecting thousands of data points that we weighed into our star-scoring system.

In addition, every broker we surveyed was required to fill out an extensive survey about all aspects of its platform that we used in our testing. Many of the online brokers we evaluated provided us with in-person demonstrations of its platforms at our offices.

Our best options brokers have a wealth of tools that help you measure and manage risk as you determine which trades to place. These brokers include valuable education that helps you grow in sophistication as an options trader. Investors with fairly large portfolios can take advantage of portfolio margining at certain brokers, a practice that assesses the total risk inherent in a portfolio that contains stocks and derivatives, and can reduce the size of your margin loan.

Our team of industry experts, led by Theresa W. Carey, conducted our reviews and developed this best-in-industry methodology for ranking online investing platforms for users at all levels. Click here to read our full methodology.

Broker ExpertOption

Broker rating

ExpertOption – another broker among the young companies, offering binary options trading services. The company is registered in 2020 in Great Britain, but there is still no information whether it will get the British FCA license or not this year. But the license of Russian regulator CROFR was issued long ago and is still active.

Partially the product is similar to those that the young brokers have, that were registered 1-2 years ago:

  • emphasis on the trading platform and its features, functionality (ExpertOption has proprietary trading platform with high execution speed);
  • a fairly broad set of classic options and assets;
  • low threshold for entrance into trade with the aim of attracting potential clients.

Advantages of trading conditions of ExpertOption:

  • free demo account (part of functions are limited, access to statistics is denied);
  • profitability up to 95% from the transaction;
  • more than 180 of available assets;
  • minimum deposit – 10 USD (or 500 RUR), minimum stake – 1 USD.

There is a tutorial block of trading recommendations for the beginners. For real traders ExpertOption offers 5 types of accounts depending on the deposit. Minimum deposit (in rubles) is 500 RUR, maximum 200 000 RUR.

Variants of options are rather limited from ExpertOption: so far only the classic quick options with the expiration time from 1 to 3 minutes are available for the investor. Soon the long-term options (24 hours and 1 week) should appear.

The main feature of deals from ExpertOption is that the broker provides, in some cases, a refund of 30-50% of the investment in case of wrong prediction, whereas other brokers in most cases do not return the money, calling it a loss of the investor. However, 30% are returned when with Silver status, 50% with Vip status.

Piculiarities of ExpertOption trading platform:

  • easy visualization of trade: the graphs in the form of American bars, Japanese candlesticks, linear method;
  • it is possible to put three popular indicators: moving averages, Bollinger bands, alligator;
  • convenient interface and changeable number of Windows (for example, it is possible to work with 4 independent options).

After you tried the free demo account, where 1000 points are offered for the experiment, we offer to try your forces on real trading. Quotes for any asset are displayed in ExpertOption trading platform in real time if the real account is opened (the quotes provider is Claws&Horns). To register: enter contact information, confirm email address, add fungs at “Finances” section. Depending on the Deposit amount a trader can be assigned various status that determines the amount of bonuses offered by the broker.

  • Important: the bonuses provided by ExpertOption, must be worked out in consequence. Therefore, we strongly recommend that before you accept the bonus, contact the Manager and clarify what it will require in the future.

Trading platform has the function of copying the trading (social trading). Although it is difficult to surprise, however, each terminal has its approach to this function. How to manage the service “Social trading”:

  • choose trades on the sidebar whose transactions are showing the highest yield;
  • track transactions for multiple traders;
  • copy their trades.

Remember that the speed in making a decision is important in short-term trades! And the trade copied from the successful trader with a delay of 30 seconds on the contrary could be wrong.

Replenishment is possible via a popular e-wallets, and Bank cards of international payment systems. Deposit currency is US dollar and Russian ruble. Withdrawal of funds is carried out within 3 days. For verification data a passport scan and scan of the card on which money can be withdrawn can be required.

To sum up: ExpertOption is gaining its weight in the market of binary options. Some of the benefits of the broker are obvious: the minimum rates, small deposit, expedited withdrawals. However, in order to feel the real difference of ExpertOption from other brokers, you need to try to work with him. We are sure that you will certainly find something interesting in it.

ExpertOption – reliable broker for good income!

7 Binary Options

eToro had its humble beginnings as a simple forex broker, all the way back in 2006. Founded by two brothers, Yoni and Ronen Assia out of Tel Aviv, Israel, it was initially known as RetailFX. The goal of the company was forex trading made easy, and eToro marketed heavily toward retail and ‘non-expert’ traders.

This could be seen in the design of some of their early trading platforms, such as Web Trader and Globe Trader, which looked more like an 80s Nintendo video game than a professional trading platform. For instance, the Web Trader interface featured images of various business people running a race; the system was called ‘Marathon’ and was supposed to present an alternative to the ‘boring’ trading interfaces.

Here’s an example, want to trade the common USDJPY pair? If you bet on the dollar, then the American Uncle Sam had to be ahead in the ‘race’ against the Japanese sumo wrestler, which showed that the dollar was gaining on the yen. There were no charts, analysis tools, or stop and order limits.

eToro also featured the Globe Trader in the early days and this one was presented in the form of a world map. If you wanted to trade the sterling, then you would have to click on Great Britain. As you can imagine, these interfaces drove off some professional traders, but then again, those were not eToro’s target market in the first place.

Bulls and Bears

eToro really took off in 2020, because that’s when it launched its OpenBook platform, putting eToro at the forefront of the social trading phenomenon with its Copy Trading feature (more on that below). eToro also released its first Android trading app that year allowing people to trade from their mobiles.

eToro’s success attracted the attention of investors, and eToro has successfully raised a significant amount of funds. Between 2007 and 2020, eToro had 5 rounds of funding and raised $58.5 million from Russian and Chinese investors. This has enable eToro to continue to expand, and it began its UK operations in 2020. At the end of 2020, eToro announced that it was launching in Poland. And through joint ventures with its Chinese investors and Russian investors (PingAn Ventures and Sberbank), eToro is also available in China and Russia.

It has also expanded its product offerings into Contracts for Differences (“CFDs”), cryptocurrencies, and in the beginning of 2020 launched CopyFundsTM for Partners. This feature gives investment companies the ability to create bespoke funds on the eToro platform which eToro’s millions of clients can then invest in.

With this step, eToro has taken a big leap from its days as a humble forex broker as it has now placed itself in direct competition with investment funds and financial advisors. They’re not just competing for the customers’ trading money, now eToro wants your investment dollars as well.

To give you an idea of just how far eToro has come, in 2020, it signed a 3 year sponsorship deal with the football club West Ham United.

eToro Companies

Not counting eToro’s joint ventures, eToro operates primarily through two companies, eToro (Europe) Ltd, registered in Limassol, Cyprus, and eToro (UK) Ltd, which is registered in London.

eToro Regulation

eToro Regulation

When it comes to the case of forex brokers, binary options brokers, or just online trading platforms in general, one of the main questions that should be first asked is ‘is this broker regulated?’ Unfortunately, the requirements for setting up an online brokerage are not very high or stringent, and there are plenty of unlicensed and unregulated brokers out there. Take a quick search on the Internet and you will find numerous stories of unaware and trusting traders being scammed by such unscrupulous traders.

This is not to say that a regulated broker is exempt from unscrupulous or fraudulent activity. In fact, plenty of regulated brokers have been caught in such activities. However, because they are regulated, customers at least have some recourse available and brokers are often penalized with fines.

And the good news is that eToro is that eToro is indeed regulated. eToro (Europe) Ltd is regulated by the Cyprus Securities and Exchange Commission (“CySEC”), license number 109/10, obtained in January 2020. eToro (UK) Ltd is regulated by the Financial Conduct Authority of the UK (“FCA”), license number FRN 583263 .

Now, if you have been around the online brokerage scene for a while, you will know that when it comes to regulation, many such firms turn to CySEC. Because Cyprus is a member of the European Union, being CySEC regulated allows the company to offer their services throughout the greater European Economic Area. This is due the Markets in Financial Instruments Directive (“MiFID”).

Unfortunately, the image of CySEC isn’t the best. The island is heavily dependent on income from such investment firms choosing to register in Cyprus, which is why they have a favorable tax regime and have a reputation of being rather lax on regulation, especially in the early years. However, with the growing number of investment firms being registered in Cyprus, CySEC has in recent years gotten noticeable more stringent in their regulation and enforcement.

For example, Cypriot Investment Firms are required to have a minimum of EUR730k in capital. In addition CySEC also has an Investment Compensation Fund, which is funded by payments from all the regulated investment firms in case an investment firm goes bankrupt and is unable to repay its clients.

The total amount in the fund stands at over EUR17.5 million and each trader is entitled to a maximum compensation of EUR20k. However we should note that to date the conditions under which investors can claim from the fund are still unclear and the fund has rarely been used.

We take further comfort in the fact that eToro is not just CySEC regulated, but FCA regulated as well. Unlike CySEC, the FCA has always been regarded as one of the premier regulatory financial authorities in the world. The fact that eToro was able to obtain an FCA license is a huge positive on their part and sets them apart from much of their competition.

To summarize, at this point in time, we conclude that eToro is sufficiently regulated and customers should not have any worries in this aspect.

eToro USA

eToroUSA is operated by Tradonomi LLC, a member of the National Futures Association (“NFA”) which is under the regulatory purview of the Commodity Futures Trading Commission (“CFTC”). However, eToro USA is not active at the moment, meaning that residents of the USA are unfortunately not permitted to use any of eToro’s services.

eToro Trading Platforms

As we mentioned above, eToro had various trading platforms over the years, with the most prominent being their WebTrader trading platform launched in 2008, followed by OpenBook in 2020 which was its first social trading platform and the base for the current platform available today.

In November 2020, eToro’s WebTrader was integrated with OpenBook plus all the mobile platforms, and today eToro boasts a singular trading platform that has all the features of the previous platforms, plus more. Since the integration into eToro’s current platform, both WebTrader and OpenBook have been deactivated.

eToro’s integrated platform offers two different functions: retail trading, and social / copy trading. Retail trading is your standard trading and eToro functions as a normal broker in this respect. What differentiates eToro from the competition is its Copy Trading and Social Trading feature. Copy Trading allows you to automatically replicate the trades of your selected traders on a proportional basis while Social Trading describes the general umbrella under which Copy Trading falls. More on that in the section below.

Like most brokers, eToro also offers leveraged trading, which allows you to trade notional amounts far higher than your trade amount. Currently, the minimum leverage is 1x for stocks and 2x for all other assets. Maximum leverage ranges from 5x for stocks to 100x for indices and commodities, and all the way up to 400x for currencies. However, eToro’s default ‘Responsible Trading’ setting does not allow you to trade leverage ratios above 50x or place trades that exceed 20% of account equity, although this can be manually changed. When it comes to leveraged trading, one important feature that can help mitigate a trader’s risk is negative balance protection. At the moment it is unclear, whether or not eToro offers this feature.

eToro Asset Classes

By offering CFD trading, eToro was able to evolve from offering merely forex trading into five different asset classes. Currently you can trade currencies, commodities, indices, stocks, and ETFs using eToro. eToro offers hundreds of different assets you can trade in under these classes.

eToro Spreads

As is common with other brokers in the business, eToro does not charge any commissions but makes its profit through trading spreads. And while eToro’s trading platforms are excellent and are probably the company’s biggest draw, one of its biggest drawbacks are its spreads. eToro may have some of the best trading platforms in the business, however it also has some of the highest (if not the highest) spreads in the business.

The spreads are prominently listed on eToro’s website, and the lowest spread is 2 pips which only apply to the USDJPY pair, in the case of currencies. The average spread ranges from 4 to 6 pips for currencies, which is very high considering that other brokers have spreads as low as 0.1 pips!

eToro Social Trading and Copy Trading

Basically, social trading takes advantage of ‘crowd wisdom’ to help traders make the optimal trades. Instead of just relying on your own strategies, traders can now follow more successful traders and replicate all or part of their trading strategies. Social trading is a broad umbrella term; not only can you replicate other traders’ strategies but you can also ‘follow’ them (comments, likes etc.) as well as see their investment statistics in order to find the best traders to copy.

And research shows that copy trading is indeed effective. In an MIT Study conducted in 2020, Dr. Yaniv Altshuler found that traders on eToro who used guided copying (copying a suggested trader) performed 6 to 10% better than manual traders, and 4% better compared to traders that were merely copying random investors of their choice.

Due to eToro’s large network of over 4.5 million users, its social trading is particularly effective. eToro’s main social trading tool is the CopyTrader which is the feature that allows you to discover and copy the best traders on the eToro network. You can copy up to 100 different traders at once, with a minimum amount of $100 each with a maximum amount of $500,000 per trader. The minimum trade amount of a copied trade is $1. CopyTrader has 4 main features:

  • Copy All Trades: You will copy all open trades of your selected trader. These positions will have the same Stop Loss and Take Profit limits as the original trade and will also follow the copied trader’s future actions. For example, if your copied trader changes his stop loss position, yours will be changed as well. Note that you will have to open your trades at the current market rate, not at the copied trader’s original rate. However, you do have the option of closing specific copied trades while still copying the other trades.
  • Copy Only New Trades: You will only copy your copied trader’s trades that he or she makes after you have initiated the copy action.
  • Copy Stop Loss: This feature allows you to manage your risk across your whole copy portfolio. After the stop loss is breached, your copy account with the selected trader and all associated positions will be closed and remaining funds returned to your balance. By default it is set at 40% however it can be manually changed. This feature can be used in conjunction with the other features and is highly recommended for risk management purposes.
  • Pause Copy: This feature allows you to pause any new copy trades being opened with a copied trader, however all open positions will still remain open.

In addition to the above, eToro also has several other features to enhance its copy trading program.

  • People Discovery: This is eToro’s internal search engine to find traders to copy. You can filter your search according to country, invested assets, minimum gain over a certain time period. And that’s just the basic filter. If you use the Advanced Search function you can narrow it down even further with criteria such as portfolio allocation, average trade size, risk score, number of profitable months etc.
  • Top Traders’ Insights: This is a feed which collects data from eToro’s Top 1,000 most profitable traders and provides insights into their most traded instruments plus a breakdown into buy and sell positions.
  • Economic Calendar: A highly detailed economic calendar that shows data such as export growth, GDP, jobs data, industrial production etc. of various countries. The data is even broken down into actual, forecast, and previous.
  • Market News: Live news updates, trends, fundamental analyses, and technical insights.
  • Pips Calculator: A quick tool to translate movement in pips into actual dollar profits and losses.

With almost 5 million traders on the eToro platform, finding the right traders to copy can be a bit of a challenge, even with the People Search function. That’s why eToro has implemented its Popular Investors program, which not only highlights its best traders but enables these traders to earn money from being copied as well.

This is not unusual, as one of the criticisms of copy trading is that is essentially investment management. After all, if thousands of people are copying your trades, aren’t you basically just investing their money for them? The only difference is that there is no real contract between the copier and the copied trader.

Popular Investors can earn money via an ‘asset management’ fee of up to 2% (assets under management would depend on how many traders are copying you) plus up to a 100% spread rebate. This is all in addition to their own trading earnings. And the payments to Popular Investors are not just bonus credits; they are real funds that can be immediately withdrawn. We should note that all Popular Investors must trade using ‘Responsible Trading’ settings.

eToro currently has four levels of Popular Investors. They are:

  • Cadet: Requiring only 1 trader to copy you, plus a minimum deposit of $1,000. Doesn’t earn any monthly premium but instead earns a 20% spread rebate.
  • Rising Star: Minimum deposit of $5,000 and 50 traders copying you. You get a spread rebate of 30% and a monthly payment of $500. Withdrawal fees are also waived.
  • Champion: Minimum deposit of $5,000 and 250 traders copying you. You get a spread rebate of 50% and a monthly payment of $1,000. Withdrawal fees are also waived. You get access to a Premium Account and Trading Central.
  • Elite: Minimum deposit of $20,000 and assets under management of above $300,000. You get a spread rebate of 100% and a monthly payment of $1,000 plus 2% of assets under management. Withdrawal fees are also waived and you get access to a Premium Account and Trading Central. In addition, you get a $500 monthly marketing budget, a $500 quarterly education budget, and a $5,000 annual events budget.

eToro CopyFunds

In early 2020, eToro launched its CopyFunds feature which moves eToro towards a universal investment and trading platform. As we explained above, copy trading is already conceptually similar to investment management; by copying another trader’s trades, he is essentially ‘managing’ your money for you.

Each CopyFund will have its own investment strategy and asset allocation. The minimum investment amount in a CopyFund is $5,000 and there are two kinds of CopyFunds available:

  • Market CopyFunds: A CopyFund that is comprised solely of financial assets such as stocks, currencies, ETFs etc.
  • Top Trader CopyFunds: This CopyFund consists of actual traders instead of assets. The traders that comprise a certain CopyFund will be selected based on each individual CopyFund’s strategy. For example, if a CopyFund’s strategy is long term equities then it will select traders that have high stock allocations with long timeframes.

Unlike investing in a typical fund or financial services firm, there is no management fee associated with using CopyFunds. This puts it ahead of even the low cost ‘robo-advisors’ which are so popular right now, most of which still charge management fees. The only fees will be via eToro’s spreads on the transactions initiated by the CopyFund.

Also, unlike traditional funds which have very stringent redemption conditions and even ‘redemption gates’ to prevent a run on the fund, you can halt your CopyFunds investment at any point in time. The only delay is that if you initiate a stop when the markets are closed, you will have to wait until the markets are reopened for the system to close your positions.

There are a few other salient differences between CopyFunds and traditional funds. For one, there is no need for a CopyFund investor to deliver capital to an investment manager, rather the ‘manager’ just opens and closes positions from the investor’s own accounts according to the CopyFund’s strategy. Second, leveraged trading still applies meaning that your notional investment amount can be much larger than your actual investment amount. And finally, eToro’s CopyFunds allows the usage of short positions unlike traditional ETFs, which only take long positions.

Over time, every investment portfolio experiences what is known as ‘portfolio drift’. This is what happens when due to individual price movements of the assets within a portfolio, its allocation starts moving further and further away from the target allocation. Because of this, a portfolio needs to be rebalanced on a periodic basis. eToro rebalances its CopyFunds periodically and automatically however the rebalancing period differs between each CopyFund. You can refer to each individual CopyFund’s prospectus to find out its rebalancing frequency.

Of course when it comes to investment funds, what everyone wants to know is, what is the return on investment? Unfortunately, since eToro’s CopyFunds is not even 3 months old as of April 2020, its returns cannot yet be compared to any benchmark. However, as per most investment funds, investors should look at a timeframe of years for ideal returns. Remember, investment is not trading.

eToro Account Types

eToro Account Types

eToro currently offers 3 types of trading accounts. They are:

  • Standard Trading Account: The most common account with a minimum deposit amount of $50 up to $1,000 depending on country and region.
  • Demo Account: A demo account with $10,000 in virtual credits. Can be used simultaneously with a standard trading account; traders have the option of switching between the live and demo accounts on the platform.
  • Islamic Account: A big plus for its competitors, eToro also offers sharia compliant Islamic accounts. Trades conducted on the Islamic account implement immediate buying and selling without delay with no interest on trades, thus avoiding potentially usurious interest, known as riba. An eToro Islamic account also provides you with interest free leverage, and there is no interest on contractts over 24 hours, nor does eToro take any additional commissions for contracts over 24 hours. However, it has one of the highest account opening minimums, at $1,000.
  • Premium Account: Automatically given to Popular Investors who have achieved ‘Champion’ status and above. However if you have $20,000 in account equity or have made net deposits of $20,000 over an 11 month period, you too can qualify for a premium account. Premium Account holders have a personal account manager, faster withdrawals, direct access to eToro’s trading room, free access to its Trading Central investment research platform, weekly market analysis videos, plus a personal credit card. They may also receive a 25% deposit bonus upon the upgrade and further their referral commissions are higher at $2,000 per invitee with each invitee receiving a $5,000 special deposit bonus.

eToro Deposits and Withdrawals

eToro’s minimum deposit amounts range from as low as $50 to as high as $1,000 depending on region and country. eToro also accepts a wide range of payment service providers; in addition to the usual Visa, MasterCard, and wire transfer, eToro also accepts China Union Pay, Diner’s Club, Giropay, Neteller, PayPal, Skrill, WebMoney, Wirecard, and Yandex. All eToro accounts are USD-denominated and deposits made in different currencies will be converted into USD which will be subject to eToro’s posted spreads.

Depending on the payment option, there is also a maximum deposit amount (unlimited for wire transfers), ranging from $5,000 to $50,000. All transactions are protected using Secure Socket Layer (“SSL”) technology for maximum data protection and privacy.

eToro Deposits and Withdrawals

We should also note that while it is possible to deposit money into your eToro account without first verifying your account, unverified accounts are limited to a total deposit amount of $2,250. Account verification requires proof of identity, proof of address, and phone number verification.

When it comes to withdrawals, only customers with verified accounts can withdraw funds. The minimum withdrawal amount is $20. eToro takes 1 business day to process a withdrawal request, which we note is extremely fast, while the time it takes to reach a customer’s account will vary depending on the payment service provider. In general, it may take anywhere from an additional 1 to 8 working days after the withdrawal has been processed. Withdrawals are also subject to fees, which are described in the section below.

Video ad of eToro below: Note: Remember to read our conclusion of eToro at the end of the review

eToro Fees

eToro’s primary method of income is the spreads it takes on all trading transactions, which are already some of the highest in the industry. Further, eToro applies the same high spreads for currency conversion of a customer’s funds when depositing or withdrawing funds (since all of eToro’s accounts are denominated in USD). In addition to these spreads, withdrawal fees are also applicable, depending on the withdrawal amount.

  • Withdrawal amount of $20.00 – $200.00: Fee of $5.00 is applicable.
  • Withdrawal amount of $200.01 – $500.00: Fee of $10.00 is applicable.
  • Withdrawal amount of $500.01 and up: Fee of $25.00 is applicable.

Based on the withdrawal fees above, it is clear the eToro’s withdrawal fees are very high, especially if you express them in percentage terms. If you withdraw $100 your withdrawal fee is 5% and if you withdraw $1000 your withdrawal fee is 2.5%! Only when withdrawing thousands of dollars does the withdrawal fee become small in percentage terms.

Overall, it’s not just eToro’s spreads that are high, its withdrawal fees are as well. Definitely a negative that should be considered.

eToro Trader Education

eToro Trader Education

eToro features an educational ‘Trading Academy’ section which has three main features: live webinars, a trading e-course, and trading videos. Currently there are 7 previous live webinars posted which can be accessed via the eToro website or on their YouTube channel. Their trading videos are more of ‘how to’ videos and are designed to show users how to properly use their platform and its features. This is also available through their website and hosted on their YouTube channel.

Their trading ecourse, while free, is only available to registered members. Currently there are 11 lessons in the ecourse, covering topics such as basic and advanced technical analysis, effective strategies, trading psychology, and market analysis.

In addition to their trading academy, eToro also maintains an active blog which has a wide range of topics from cryptocurrency news, top investor spotlights, market analyses, and of course, eToro updates.

eToro Bonuses and Promotions

eToro has a ‘Refer a Friend’ program, which can earn you $100 in eToro credits for every friend you invite. Further, each friend you invite will himself or herself receive $200 in eToro credits! However, the caveat is that each of your invitees must deposit a minimum of $500 with eToro for you to receive the bonus credits. The invitation process is easy and can be done entirely via email. Premium Account holders receive higher commissions when using this program.

In addition to ad-hoc promotions, eToro offers two main promotional programs; a First Time Depositor promotion and a Re-Deposit promotion. eToro did not specify the amount of credits available under these promotions, however it did note that any credits as a result of these promotions have a six month expiry date from the time they are first deposited.

eToro Website

While eToro’s main website pages are easily navigated to from the main page, we found that the site has a high number of inner pages which are not intuitively laid out. As an example, information about eToro’s Islamic account and leverage ratios can only be found by navigating through its inner pages. Further, we note that a lot of details about eToro itself require you to be a member to learn about them. While overall eToro’s website is adequate, there is still much room for improvement.

eToro Customer Support

eToro offers customer service on a 24/5 basis, that is 24 hours a day from Monday to Friday. eToro has a ‘Customer Service Wall’ feature, which is similar to Twitter for non-urgent inquiries. All complaints posted on the wall are visible to everyone; further, this feature is only available from 8AM to 5PM GMT.

For private or urgent inquiries, eToro customers can use their 24/5 Live Chat feature or submit a complaint to them via web form. It should be noted that complaints submitted via web form may take up to 48 business hours to receive a reply. The downside of eToro’s customer support options is that unlike their competitors, they do not offer any phone support.

eToro Customer Complaints

Given the massive popularity of eToro, with almost 5 million users, complaints are inevitable. Our research showed that most of the complaints against eToro were very minor and mostly revolved around the lack of customer support, high spreads, withdrawal fees, and their focus on social trading over retail trading. With regards to the final point, it appears that more than a few traders were disappointed that the traders they had copied were not successful; but this is a risk you must accept when using social trading.

In addition, back in 2020, CySEC fined eToro EUR50,000 for weaknesses in their operational and organizational structure related to their early days in 2020. eToro paid the fine and all the weaknesses have been rectified.

eToro Social Media Accounts

eToro is active on all the usual social media accounts and you can find them on Facebook, Twitter, LinkedIn, Google Plus, and YouTube.

Conclusion

When it comes to social trading, eToro has pushed itself ahead of the pack. Already one of the first in the game, its features such as the Popular Investor program and the latest, CopyFunds, puts it ahead of the competition.

And with such a large user base, its social trading capability is only magnified. That said, it does have significant drawbacks, namely very high spreads and withdrawal fees. But since top traders can get spread rebates and their withdrawal fees waived, eToro may be the kind of broker where the top traders truly thrive while unsuccessful traders might find themselves left far behind.

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