Is eToro Good for Investing in Stocks?

Written by Nick Zelver

Fact checked by Mike Druttman

Updated Mar, 2024

eToro can be a good platform for investing in stocks, offering a diverse selection of over 3,000 stocks and a user-friendly interface. Its unique features like copy trading and fractional shares make it accessible and appealing, especially for beginners. However, limitations such as no leverage for U.S. clients and restricted access to certain exchanges may be drawbacks for some investors.

Evaluating eToro for Stock Investments

When considering if eToro is a suitable platform for investing in stocks, several factors come into play. These include your investment objectives, experience in the stock market, and specific requirements as an investor. Based on my exploration and use of eToro's features, here's an impartial assessment of its pros and cons for stock investing.

The Pros Explained

1. Diverse Stock Selection: With over 3,000 eToro stocks available, this broker offers a wide range of investment options, from well-known blue-chip companies to emerging market stocks. This diversity allows for broad portfolio diversification.
2. User-Friendly Interface: Their app and web platform are designed with user experience in mind. They are intuitive and easy to navigate, making them suitable for both beginners and experienced traders.
3. Copy Trading Feature: One of eToro's standout features is copy trading. This allows less experienced investors to mimic the trades of more seasoned stock traders, which can be a valuable learning tool and strategy.
4. Fractional Shares: Another interesting advantage that I personally like is that it enables the purchase of fractional shares, making it accessible for investors with limited capital to invest in high-value stocks.
5. Real Stock Trading: The platform offers the ability to trade real stocks, not just CFDs, which can be a significant advantage for those looking to own actual shares.

On the Other Hand, The Cons

1. No Leverage for Specific Countries: I've learned that for clients based in the United States and a few more countries, eToro does not offer leverage in stock trading. This could be a limitation for those looking to amplify their trading capacity. However, this is beyond this broker's control as this is due to regulatory restrictions.
2. Limited Exchanges: While the platform provides access to a variety of global stocks, it does have limitations in terms of the number of exchanges available. This might restrict access to certain markets or specific stocks not listed on the major exchanges. I was actually hoping to see stocks listed in Japan and other Asian markets but who knows, they might just offer them in the future.

Personal Insights and Takeaways

In my experience, this broker's strengths lie in its diverse stock offerings and user-friendly interface, which are great for both new and seasoned investors. The copy trading feature is particularly beneficial for beginners. However, the lack of leverage for residents of specific countries, including the US, and limited exchange access might be drawbacks for certain investors.

Whether eToro is a good fit for investing in stocks largely depends on your individual needs and investment strategy. Its wide range of stocks, ease of use, and innovative features like copy trading and fractional shares make it an attractive option for many. However, the limitations in leverage and exchange offerings could be significant depending on your trading style and goals. As with any investment platform, it's crucial to weigh these factors against your personal investment criteria.

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.