What do I purchase when I open a position on eToro?

Please note that some of the instruments on the eToro platform are traded as real assets, while others use CFDs. CFD stands for Contract for Difference.

All non-leveraged BUY positions for ETFs, cryptocurrencies (since 3 September 2017) and stocks (since April 2018) are traded as real assets*. Commodities, indices and currencies are traded using CFDs.

CFDs are specialized and popular Over The Counter (OTC) financial products that allow traders to easily take broad market positions in a variety of different financial markets. It also means that we are obligated to follow price movements, and look at our client’s P&L according to what really happened in the market on the same instrument. This allows trading indices, commodities and other instruments without actually buying the underlying asset. 

Keep in mind that if you hold a CFD stock position, you do not actually own the stock or hold any rights shareholders have. Nonetheless, should the company issue dividends, your balance will be updated in accordance with your holdings. Any CFD trade will be marked 'CFD' in the trade line. 

*Please note:

Zero-commission is available to clients of eToro (Europe) Ltd, eToro (UK) Ltd and eToro AUS Capital Pty Ltd (AFSL 491139). 
For clients of eToro AUS, only stocks traded on US stock exchanges are available as underlying assets and with no commission. These stocks are offered through eToro Service (ARSN 637 489 466) operated by Gleneagle Asset Management Limited ABN 29 103 162 278, and promoted by eToro Australia Pty Ltd. CAR 001281634. Refer to our FSG and PDS before deciding whether to trade with us. All other stocks are offered as derivatives and bear commission.
Zero-commission does not apply to short or leverage positions. Zero-commission means that no broker fee will be charged when opening or closing the position. Other fees may apply. For additional information regarding fees, click here. Your capital is at risk.

In addition, all stock trades made on the Milan Stock Exchange (Borsa Italiana), Helsinki Stock Exchange, Copenhagen Stock Exchange and Oslo Stock Exchange are executed as CFDs, regardless of the account regulation. All stock trades opened by users resident in the following countries are only available as CFDs: Afghanistan, Angola, Belarus, Congo Republic, Côte d'Ivoire, Democratic Republic of the Congo, Iraq, Liberia, Libya, Myanmar, North Macedonia, Nauru, Nigeria, Sierra Leone, Zimbabwe. 

Click here to learn more.