eToro Spreads

Written by Mike Druttman

Fact checked by Wikitoro Team

Updated Mar, 2024

Setting the Stage

If you're here, chances are you're seeking detailed information about eToro's spreads. Fortunately, you've come to the right place.

In this guide, I will cover all the essential details and facts about the spreads – a crucial fee component in trading on the platform. To ensure clarity and minimize confusion, I'll also provide examples to illustrate how these spreads work in practice.

So, let's dive in and demystify this interesting topic.

Understanding the Spread

When trading on eToro, each instrument is associated with two key values: the BID/BUY price and the SELL/ASK price. The "spread" is the term used to describe the difference between these two prices.

How Spreads Affect Trading Fees

Typically, brokers, including eToro, calculate their trading fees based on the spread. When you initiate a trade, it is executed at the current BUY price. However, the value immediately reflected in your portfolio is the SELL price.

Example of spread calculation

For example, if you purchase a stock from Company A at a BUY price of $85, and the current SELL price is $84.50, the spread is $0.50. Generally, lower spreads are more favorable for traders, as they imply lower trading costs.

eToro's Spread Explained

The spread on eToro is the broker's fee, calculated based on the difference between the BUY and SELL prices of an asset. This fee is a small amount added to each trading transaction on the platform, representing the cost of executing the trade.

Weekend Spreads: Overnight Fees for Open Positions

eToro implements weekend spreads, which are essentially overnight fees for positions that remain open over the weekend. While the concept might seem straightforward, there are several important aspects to consider:

• Triple Fee Structure: The weekend spread or fee on eToro is typically three times the amount of a regular overnight fee. These charges are most commonly applied on Wednesdays or Fridays.
• Rollover Fees: For some people, it known as "rollover fees". However, it's mostly labelled as "overnight fees".
• Fees May Vary: These weekend and overnight charges can vary, influenced by the current state of the global stock market. This means the amount you pay for keeping a position open over the weekend can change based on market conditions.
• Monitoring Changes: Changes in eToro's weekend spreads are applicable only to open positions. To stay informed about potential fluctuations in these fees, I recommend regularly checking eToro's fees page and staying updated with any announcements made on eToro's social media channels. This will help you manage your trades more effectively and avoid unexpected costs.

Variable Spreads

eToro also has variable spreads, which enhances the flexibility of Forex trading on its platform. This change allows spreads to adapt to market conditions, enabling investors to capitalize more effectively on stock market volatility.

💱 A note on spread fluctuations

It's important to be aware that while variable spreads can offer advantages during periods of market fluctuation, they may also lead to slightly higher spreads compared to the average for certain currencies.

For instance, in the case of the EURUSD and USDJPY currency pairs, the average spread is typically around 1. For the GBPUSD pair, the average spread is about 2. However, these figures are not static and can vary over time, reflecting ongoing changes in the market.

eToro's Spread Policy Compared to Other Brokerages

Unlike many brokerages that apply a spread to both the BUY and SELL prices of an asset, eToro's approach is slightly different. This broker charges only a single spread at the time of purchase. This means that when you, as a trader, buy an asset via their web-based interface or the app, the spread fee is applied only once, making it a unique aspect of eToro trading.

Take note: Different trading platforms offer varying spreads, which can significantly impact your trading strategy and profitability. Let's compare the spreads offered by eToro with those of other popular trading platforms to see how they stack up against each other:

A Clarity About the Higher Spread

Ever wondered why are eToro spreads so high? Operating as a standalone broker on its platform, they are known to have a marginally higher spread than its industry counterparts.

However, I found a workaround to that and this can be balanced by the unique advantage of its CopyTrader feature. Notably, this feature eliminates "slippage" during the process where you copy a trader's moves. This absence of slippage significantly compensates for the higher spread, presenting a valuable trade-off!

Spread Betting Availability 

A frequenty asked question is does eToro offer spread betting? The straightforward answer is that the platform does not provide spread betting accounts. While this might be disappointing for some, the platform offers compelling alternatives.

You can engage in contracts for difference (CFD) trading or utilize the copy trading feature, both of which are robust methods for market speculation on eToro.

Conclusion

Having delved into the intricacies of this platform's spreads, you are now equipped with the knowledge that elevates your understanding as a trader. Terms like these can often be perplexing, particularly for those new to trading. It is my hope that the information and insights shared in this guide have brought clarity and demystified the concept of spreads on eToro for you.

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. 76% 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. Trading history presented is less than 5 complete years and may not suffice as basis for investment decision.

Copy Trading does not amount to investment advice. The value of your investments may go up or down. Your capital is at risk.

Cryptoasset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply. Don't invest unless you're prepared to lose all the money you invest. This is a high-risk investment, and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.

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.