eToro: Where Financial Market Meets Social Media.

CONTENT: Takanori Kayahara

Founded in 2007, eToro is a leading social trading platform, having over 11 million registered users in 140 countries. eToro provides users access to over 1,400 stocks globally, 145 ETFs, 47 currencies & 15 cryptocurrencies just to name a few of the over 2,500 financial instruments users have access to.

The platform offers a place where users can connect and follow other traders, read their thoughts in theirs posts, like, comment, and copy their trades; more on that below.

A feature that sets eToro apart from traditional trading platforms, is its CopyTrading feature which allows users to view, follow and copy other traders on the platform, with comprehensive stats for each trader, their portfolio composition, gains, losses and trading activity. Users are provided the transparency of other traders’ past performance data metrics, enabling users to evaluate for themselves if a particular trader is right for them.

This feature lowers the technical entry-barrier often faced by new and inexperienced users who may lack the time and skills to begin trading independently, while still allowing them access to invest with minimal effort on their part.

eToro reports that as of 01 June 2018, of the 124 million copied trades, 73% have been profitable.

(One observation I found interesting, was how the traders that have users copying them are motivated, it’s structure is distinctly different from how you would think a traditional fund manager is motivated; primarily from the prospect of client acquisition and the management fees that arise from it. While in eToro’s layout, traders are primarily investing with their own funds and living out their beliefs in the market, rather than with OPM (Other People’s Money), with their own funds at stake in the trades they execute, they have skin in the game, in a manner of speaking.)

Trading on the platform too is incentivized by eToro for would-be investors looking to make a name for themselves on the platform. With its investor program, having 4 tiers from Cadet to Elite, which tops out with a monthly incentive of 2% management fee for Elite level investors.

eToro has established strategic partnerships, raising venture capital funding from large investment firms globally, including: Spark Capital, BRM Group, SberBank of Russia, Germany’s CommerzBank, China’s Ping An and China Minsheng Financial.

eToro is authorized and regulated by ASIC – Australian Securities and Investments Commission, the UK’s Financial Conduct Authority – FCA and CySEC – the Cyprus Securities and Exchange Commission.

eToro is available on web browsers, the App Store for iOS and the Google Play Store for Android devices.