Trade Markets on eToro

There are hundreds of different financial assets to trade on eToro, across several categories: commodities, cryptoassets, currencies, indices and ETFs. Each asset class has its own characteristics, and can be traded using a variety of investment strategies. Some positions on eToro involve ownership of underlying assets, such as long (BUY), non-leveraged positions on stocks and cryptos. Other employ CFDs, which enable a variety of options, such as leveraged trades, short (SELL) positions, fractional ownership and more.

Stocks

The stock market is dynamic and presents many options for traders. Stocks are usually considered suitable for medium- to long-term investments. Each stock is affected by different market events and could go up or down in value following announcements such as earnings reports, new product launches, and changes in competitors’ stock prices.

For example, if a smartphone manufacturer receives negative press following a malfunction in one of its product series, it is possible that its direct competitors’ share prices will rise. Companies which make profits, often share dividends with their shareholders at a fixed payment per share.

Buying a stock on eToro by opening a BUY (long), non-leveraged position, means you are investing in the underlying asset*, and the stock is purchased and held in your name.

However, eToro also offers additional functions using CFD trading. With CFDs, you can open SELL (short) positions, use leverage, and buy fractional shares. For example, on eToro you can invest as little as $100 in a stock that actually costs $500.

Some of our popular stocks include:

Apple | Tesla | Google | Facebook | Amazon

*Please note: All trades performed by clients under the Australian Securities and Investments Commission (ASIC), are executed as CFDs, with no ownership of the underlying assets.

Cryptoassets

Growing incredibly in popularity in recent years, cryptoassets, such as Bitcoin and Ethereum, have become the go-to investment option for many traders. With an ever-growing selection of cryptos added to the platform, and a unique CryptoPortfolio investment strategy which offers exposure to the market and is managed by eToro’s investment committee, eToro presents many options for those who wish to trade and invest in the crypto market.

Cryptoassets display extremely high volatility, and it is quite common to see double-digit percentage fluctuations in a single day. Bitcoin, which is the first and largest crypto, is considered to be the benchmark for this market, and other assets’ charts often move in the same direction as Bitcoin.

Buying crypto on eToro means you are investing in the underlying asset*, and the crypto is purchased and held by eToro on your behalf. These trades are unleveraged. Buying and selling the underlying assets are unregulated and have no investor protection.

Our cryptocurrency offering includes, among others:

Bitcoin (BTC) | Ethereum (ETH) | Bitcoin Cash (BCH) | Cardano (ADA) | XRP

*Please note:

All trades performed by clients under the Australian Securities and Investments Commission (ASIC), are executed as CFDs, with no ownership of the underlying assets.

Long (BUY) cryptocurrency positions are unregulated products with no investor protection. However, short (SELL) positions opened for cryptocurrencies on eToro are executed using CFDs, and, therefore, operate under the regulations of CySec and the FCA.

Commodities

Trading commodities is one of the most ancient trading practices in the world, dating back thousands of years. Commodities are unique, given that they have a real world physical representation. Whether it’s an energy source, such as oil, or a precious metal like gold or platinum, commodities exist in the real world and, therefore, are also affected by real world events.

For example, if oil reservoirs are in surplus, it is likely that prices will drop accordingly. In addition, some commodities are considered safe-haven assets, meaning they can add stability to a portfolio which consists of highly volatile assets. For example, many foreign currency traders turn to gold futures when the market becomes too volatile, as gold prices are more stable overall, while still relating to the foreign exchange market.

Commodities are traded on eToro only as CFDs, meaning you don’t need to purchase the underlying asset to trade them. In addition, CFDs enable “sell” (short) positions, leveraged trades, and fractional ownership – even for assets that don’t offer the option in traditional trading. For example, on eToro, you can invest as little as $100 in gold, even if a single unit of gold costs $1,000.

Some of our most popular commodities include:

Gold | Oil | Natural Gas | Silver | Platinum

Currencies

The foreign currency exchange market is the biggest market in the world, with a trading volume average of more than $5 trillion a day. It is also an incredibly volatile market, with changes happening within a matter of seconds.

Since it is such a dynamic market, currency traders are usually very active, sometimes opening and closing trades within minutes. Movement in currency is measured in very small units, known as “pips” (0.0001), and require substantial capital to generate noticeable profits.

For this reason, most trading platforms offer leveraged transactions at a fixed ratio. For example, if the ratio is set to 1:100, then for each $1 invested, the platform loans the trader an additional $99. Leveraging is considered a double-edged sword, since losses are also leveraged, and can result in funds depleting rapidly.

Each currency is affected by various factors, including central banks’ interest rate decisions, a certain country’s export statistics, and other economic events.

Currencies are traded on eToro only as CFDs, meaning you don’t need to purchase the underlying asset to trade them. In addition, CFDs enable SELL (short) positions and leveraged trades – even for assets that don’t offer the option in traditional trading.

Some of our popular currencies include:

EUR/USD | GBP/USD | AUD/USD | USD/JPY | USD/CAD

ETFs

An Exchange-Traded Fund (ETF) is a financial instrument comprising several assets grouped together to serve as one tradable fund. Each ETF follows a certain market strategy or index and is designed to either suit the hedging needs of a specific financial institution, or to be a low-risk option for investors.

ETFs are created by financial bodies using a team of experts who tailor each fund to meet its a goal. The assets in the fund are owned by its creators, and just like stocks, dividends can be distributed to investors from time to time. ETFs are usually considered long-term investment tools, as they are geared towards low risk, and are designed to yield steady profits over time.

Investing in ETFs on eToro by opening a BUY (long), non-leveraged position, means you are investing in the underlying asset, and the ETF is purchased and held in your name*. However, eToro also offers additional functions using CFD trading. With CFDs, you can open SELL (short) positions, use leverage, and buy fractional shares. For example, on eToro, you can invest as little as $250 in an ETF that actually costs $500.

Some of our popular ETFs include:

SPY | VXXB | TLT | HMMJ | QQQ

*All leveraged ETF positions in the UK, under FCA regulations, and all positions in Australia, under ASIC regulations, are executed as CFDs.

Indices

Every major stock market around the world has an index, or several indices, which reflect the status of a specific segment of that market. Indices are considered more stable than individual stocks, since they contain many different assets, which tend to balance each other out.

For example, the NASDAQ index on Wall Street aggregates major companies from the tech sector, such as Apple and Google, and since it contains rival companies, if one falls, sometimes its competitor will rise, maintaining the index’s overall balance.

Since companies vary in size and market cap, each stock has a different effect on the index, meaning some carry more weight. For example, since Apple has more weight than smaller companies within the NASDAQ index, if Apple’s stock rises significantly, it could lift the entire index’s value.

Indices are traded on eToro as CFDs, as they are not financial assets that can be directly invested in. With a CFD, you can open BUY (long) or SELL (short) positions and open leveraged trades.

Some of our popular indices include:

GER30 | NSDQ100 | DJ30 | SPX500 | FRA40

 

For more information regarding trading on eToro, see our Terms & Conditions and Key Information Documents.