eToro aims to open financial markets to everyone
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Finance is one of the areas most affected by the digital revolution. Online transactions were born and boomed with the development of the Internet from the mid-twentieth century to the early twenty-first century. Upgrades and changes have also taken place non-stop over the past 20 years. The birth of eToro is an obvious example of this. eToro is an Israeli trading platform founded in 2007. eToro has attracted more than 24 million users in 100 countries worldwide.
Let’s learn about the company’s mission. What is the goal of eToro?
EToro was born to help users access the financial market. This exchange creates opportunities for users to access most transparently.
Many online trading platforms already exist in the financial market. But what sets those exchanges apart from eToro?
There are two significant differences between eToro and current exchanges. First, eToro is a multi-asset platform. It makes it possible for users to invest in stocks, ETFs, money markets, and cryptocurrencies … Thus, users can build an extremely diversified portfolio. Second, eToro is the first trading platform to introduce a social investment network that helps new investors access seasoned investors. Thanks to that, newcomers can learn investment strategies and gain profits from trying in this field for the first time.
What is social investment?
Social Investing is a community where users can share investment strategies, ideas, and news on different markets. This sharing is an essential source of financial education. Social investing is also an innovative method that allows investors to copy thematic portfolios created by eToro or other users. Copy trading is a unique feature of eToro. Several competitors have tried to copy this trading platform of eToro without success.
When you decide to copy another user’s portfolio, do you need to copy their entire portfolio?
eToro has built a completely different character from other trading platforms. The copyist does not need to copy the entire portfolio of the selector. They can choose to copy several categories according to their needs and capital. This is an essential feature, especially in the US stock market. Here individual stocks cost hundreds or even thousands of dollars. For example, Amazon stock is worth more than $3,000. Investing in high-value stock portfolios is difficult for an investor without significant capital. So how to do this technically? Very simply, eToro will buy a stock and split it up, and sell it to users.
What about asset guarantees for investors? If eToro goes bankrupt, how will the user’s investment money be?
eToro is a regulated trading platform in Europe, and it is required to provide the guarantees needed for this sector. If eToro goes bankrupt, users will contact the Cypriot regulator to receive a maximum compensation of 20 thousand euros. However, eToro has also provides another insurance mechanism for users. Lloyd will cover another insurance. In the event of eToro bankruptcy, the insurance company will distribute compensation to investors up to 1 million euros in insurance for a portfolio. Coverage details are illustrated in particular on the eToro website.
Not only eToro but in general all other investment platforms attach great importance to trading on CFDs or investing leveraged with the money market. So should new investors use these tools? Or is it only for seasoned investors?
eToro’s mission is to open financial markets to everyone. It also means allowing new investors to access and experience tools only available to professional investors. Having access to a wide range of products is a wonderful experience. It allows investors to diversify their investment portfolios. However, these are risky tools. And we also have a clear warning to our users. We recommend that only experienced traders use CFDs. However, user interest in this asset class has decreased significantly compared to before. Today, the most significant interest people are in stocks and cryptocurrencies.
As for cryptocurrencies, we have a lot of mixed opinions. Some argue that cryptocurrencies should be avoided. But on the contrary, some see it as an excellent opportunity to invest. eToro considers these products to be included in its portfolio to diversify its investment products. The exchange says it considers a future in this type of investment product.
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