eToro Spreads

12 Important Facts You Need to Know About eToro's Spreads

For starters:
Spread and spread betting are two entirely different trading terms with its own methodologies. We will discuss eToro spreads on this section as well as a brief explanation of spread betting and if this brokerage offers it.

Table of Contents

  1. What Is the Spread on eToro?
    Are the spreads high? (1min)
  2. What Is Spread Betting?
    Definition of this trading activity (57sec)
  3. So, Does eToro Offer Spread Betting?
    Is this type of account available (18sec)
  4. Is eToro CFD or Spread Betting?
    Which among the two is it? (12sec)
  5. Weekend Spreads
    What are the overnight fees? (30sec)
  6. Spread Fees on Forex
    What are the spreads for trading currencies? (24sec)
  7. Introducing: Variable Spreads
    What is this dynamic spread type? (25sec)
  1. Spread Fees on CFD Stocks
    What fees are applicable? (1min 15sec)
    1. 8.1 What is LIBOR?
      What is this rate?(18sec)
  2. A Clarity About the Higher Spread
    Why are they wider? (23sec)
  3. Bitcoin Spreads
    What is the rate for BTC trading? (25sec)
  4. Spread on Ethereum
    How about trading ETH? (4sec)
  5. Spreads on Other Cryptocurrencies
    What are the rates for other cryptoassets? (11sec)
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What Is the Spread on eToro?

All trading instruments on the eToro platform has two values: the BID/BUY price and the SELL/ASK price. The difference between these two prices is called the "spread".

Normally, your broker (in this case, your eToro app) base their trading fees on the amount of spread.

The moment an investor opened a trade, it will follow the current BUY price, but the present rate that will appear on an investor's portfolio will be the SELL value.

Buy and Sell buttons on eToro
Buy and Sell buttons on eToro

For instance:
You buy a stock of Company A at $85 and its current SELL value is at $84.50, then the spread will $0.50. The lower the spreads, the better it is for the trader.

Simply say: eToro spread contains the amount that eToro collect from investors that is based on the difference between the BUY and SELL price. It is composed of a very small amount added to the user's eToro trading transaction. Since using eToro is free as they don't charge any fees or commissions on trades, they earn revenues from spreads.

In comparison:
While most brokerages charge a "spread" on both the BUY and SELL values of the asset, eToro only charges for a single spread when a trader buys the asset.

What Is Spread Betting?

Spread betting is a trading activity wherein the investor speculates on a commodity or stock that they do not own via an educated stake on whether the value of the asset will rise or fall in the future based on the current value offered by the broker.

To put it simply...
Spread betting, like the term suggests, involves making a bet on the price movements of an underlying assets without having to buy or own it.

Take note: With spread betting, you as an investor is not betting on the stock or asset directly, but the difference between the ask and bid value of the commodity—which investors refer to as the "spread".

As one of the most popular derivative product in which you can apply your financial market investment strategy, spread betting is widely practiced in the speculation of shares, indices, forex and commodities because it doesn't require having to buy or own an asset.

By placing a bet on whether an asset's value will rise or fall, investors can pretty much earn decent income through this investment approach.

Here are some helpful sections for you to learn about eToro spread and spread betting.

So, Does eToro Offer Spread Betting?

No, eToro does not offer spread betting accounts. However, investors find a better option to trade by speculating on any commodity or stock through trading Contracts for Difference (CFD)—which is one of the most widely-used trading tool in eToro. Another option is the social trading feature of eToro which maximizes the capabilities of the CopyTrading.

Is eToro CFD or Spread Betting?

eToro is not a spread betting platform nor it offers it as a feature. eToro is known for its CFD trading capabilities, social trading as well as a platform to invest on cryptocurrencies, company stocks and other assets.

Weekend Spreads

eToro’s weekend spreads are overnight fees imposed for OPEN positions made over the weekend.

Simply put:
The eToro weekend spread or fee is triple the amount of an overnight fee. Weekend spread are charged usually on Wednesday or Friday.

This is also called as the rollover fees (weekend and overnight). This spread can fluctuate from time to time based on the status of the global stock market.

Any change in eToro weekend spread always applies on OPEN positions. To keep track with eToro weekend spread, investors are advised to always follow the fees page and any social media announcements regarding eToro spreads from eToro.

Spread Fees on Forex

After listening to user feedbacks, eToro has lowered its spreads on at least 10 currency pairs on eToro. This includes setting spreads on major currencies such as the USD/EUR and USD/JPY to a low of 1 PIP.

But wait, what is a PIP?
A PIP means "point in percent" and it represents the smallest decimal point of a value of a specific financial instrument.

For example: For currency pairs displaying up to 4 decimal places, the value of 1 PIP is 0.0001.

Introducing: Variable Spreads

This newly introduced spreads in eToro makes the Forex spreads more flexible by having it follow market conditions for investors to take more advantage of the stock market volatility.

Please note: This however, will also make it possible for spreads to increase a little higher than the average spreads of other currencies.

Below are the current eToro spreads on its Forex pairs:

 

MarketSpread
EUR/USD1
USD/JPY1
GBP/USD2
USD/CHF1.5
NZD/USD2.5
USD/CAD1.5
EUR/GBP1.5
EUR/JPY2
GBP/JPY3
AUD/JPY2
eToro's spreads on foreign exchange (forex) or currency pairs

Take note: These are the average spread, but it does fluctuate from time to time.

Spread Fees on CFD Stocks

When trading on CFD stocks, eToro spreads and overnight fees are required:

  1. The spread that can fluctuate depending on the current conditions of the stock market.
  2. Overnight fees - This is for positions that remain in OPEN status after closing hours of trading.

Keep in mind: Triple spreads / fees are applied on commodities positions opened on Wednesday.

Example formula and computations:
Overnight fees formula = (eToro fee + Libor rate) / 365 * Units * Price in USD
eToro Annual fee:
SELL (Short)i: 2.9% + LIBOR
BUY (Long)i: 6.4% + LIBOR
LIBOR: 1.99%
Open BUY (Long) position on AAPL with Leverage: x2
Initial Investment: 1,000 USD
Total Investment worth = Initial Investment 1,000 USD x Leverage 2 = 2,000 USD
APPLE STOCK (AAPL) Ask Rate 250 USD
Position Open 2,000 USD / 250 USD AAPL Ask rate = 8 Units
eToro Typical Spread for AAPL 0.18% per unit
Overnight fees formula = (eToro fee + Libor rate) / 365 * Units * Price in USD
eToro BUY Overnight fee: 6.4%
Libor rate: 1.99%

  1. Spread = rate 0.0018 * 8 units * 250 USD = -3.60 USD
    Overnight Fee (for 1 night) = ((0.064 + 0.0199) / 365) * 8 units * 250 USD = -0.46 USD
    Total Cost = Spread + Overnight fee = -3.60 - 0.46 = -4.06 USD
  2. Spread = rate 0.0018 * 8 units * 250 USD = -3.60 USD
    Overnight Fee (position opened Wednesday) = [((0.064 + 0.0199) / 365) * 8 units * 250 USD] * 3 = -1.38 USD
    Total Cost = Spread + Overnight fee = -3.60 - 1.38 = -4.98 USD

What is LIBOR?

The LIBOR stands for London Interbank Offered Rate and is the most widely used benchmark rate imposed by banks in charging other banks for short-term loans.

Currently, there are 35 LIBOR rates posted every day ranging from 24-hours to a one-year period based on 5 world currencies. eToro follows the 1-month US Dollar LIBOR rate when computing the overnight spreads for stocks.

A Clarity About the Higher Spread

As a singular broker on its own platform, eToro usually has a slightly higher spread compared to others in the industry. However, eToro's advantage can be found on its Copy Trading feature that doesn't create a "slippage" when an investor copy a trader. This advantage makes up for the eToro high spread.

Look: A slippage is the difference in value of a stock that the trader earns, which averages around 1-2 pips each trade.

Bitcoin Spreads

eToro’s spread on Bitcoin is set at 0.75%.

For example:
If you BUY and SELL a 0.1 unit of Bitcoin valued at $4,706, then your spread fee will be $35.29. Let's say you'll open a BUY position.

Initial Investment: 4,706 USD
BTC Ask Rate: 47,706.70
Position: Open 0.10 units BUY
eToro Typical Spread for BTC: 0.75%
Overnight fees: NONE
Total fees: $35.29

Compared to other trading platforms that imposes a commission fee based on the percentage size of the position, eToro’s spread on Bitcoin is fixed and requires no additional transaction fees.

Spread on Ethereum

eToro spreads on Ethereum is at 1.90% both for real crypto and CFD trading.

Spreads on Other Cryptocurrencies

Below are the current eToro spreads on other cryptocurrencies:

 

MarketSpread
Bitcoin (BTC)0.75%
Ethereum (ETH)1.90%
Bitcoin Cash (BCH)1.90%
Ripple (XRP)2.45%
Dash (DASH)2.90%
Litecoin (LTC)1.90%
Ethereum Classic (ETC)1.90%
Cardano (ADA)2.90%
IOTA (MIOTA)4.5%
Stellar Lumens (XLM)2.45%
EOS (EOS)2.90%
Tron (TRX)3.5%
Zcash (ZEC)3.5%
Binance Coin (BNB)2.45%
Tezos (XTZ)5%
eToro's spreads on cryptocurrency or cryptoassets


Ready to trade with eToro?

Now that you have all the information that you need, you're probably more interested now about trading with eToro and wondering where to begin. The first step is to open an account and to make things easier, you just need to click on the button to get started.


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eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Past performance is not an indication of future results.

Cryptoassets are volatile instruments which can fluctuate widely in a very short timeframe and therefore are not appropriate for all investors. Other than via CFDs, trading cryptoassets is unregulated and therefore is not supervised by any EU regulatory framework.

eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.

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*67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.