eToro provides services that make it more of an investment app than a broker. These include copy trading and popular investor programs. In addition, it has various other features.
Primary revenue source: the spread, which refers to the difference between the ask and bid price. The daily calculation will have an impactful result for your profits.
Spreads
Spread is a financial term that refers to the difference between the bid and ask prices of assets or securities traded, usually measured in pip amounts and depending on the trading type and support sold.
Cryptocurrency spreads are calculated differently from stocks and commodities spreads; while not directly charged by eToro, their prices appear in your P&L whenever you make an acquisition.
Note that spreads may widen during news events or periods of high volatility, increasing market noise and lowering liquidity. Customers will still be charged the total price they purchase or sell an asset at (minus withdrawal and currency conversion fees).
Commissions
eToro’s commission structure can significantly impact your bottom line and must be carefully considered before trading with them. While they advertise low or no-cost trading, eToro still charges a commission for unleveraged buy orders (what it calls “regulatory transaction fees”). Furthermore, equity CFDs that remain open overnight incur swap fees calculated using one month LIBOR which could either reduce or add to your account balance over time – something to bear in mind as these decisions could significantly erode profits.
Lastly, eToro applies a 1.01 pip spread on forex trades compared to many of their competitors’ 0.88-1.9pip spreads.
Overnight fees
eToro charges fees when withdrawing assets from its platform to cover international money transfer costs, as well as a space for CFD trading and an overnight payment on leveraged and short positions calculated from the difference between Buy and Sell prices depending on asset class; stock trading incurs an overnight fee of 2.90% + Libor rate which banks pay each other when borrowing money from each other.
Overnight fees (also called rollover fees) are an essential element of trading and reflect the forces of supply and demand that propel financial markets, covering costs associated with your position. eToro offers market-specific overnight fees, so you can always view current rates before placing orders at the close of each trading session – this way, you may avoid incurring overnight fees altogether! To do this, close all positions before their end to avoid paying them.
Weekend fees
eToro fees are straightforward and understandable for traders. Be mindful of these charges to understand how they affect the overall trading experience; traders can find updated costs on eToro’s pricing page.
Traders should also be mindful of overnight and swap fees, assessed to CFD positions that remain open for more than 24 hours. The swap fee is calculated using Libor as part of trading with leverage; when trading assets such as commodities, currencies, stocks, or ETFs on Wednesday and Friday, this fee will be deducted and multiplied by three.
Traders can avoid these fees by using the Time To Pet feature. This enables them to set weekend fees automatically appearing on client invoices for services scheduled over weekends. Unfortunately, this solution excludes costs such as after-hours charges or percentage-based client fees.