eToro offers 25M+ social traders its popular proprietary CopyTrader and CopyPortfolios services and maintains in-house managed thematic investment portfolios. It caters exceptionally well to its core trader base, and its latest venture is an NFT fund following numerous acquisitions in the cryptocurrency sector. The eToro Academy, eToro plus, and The Bull Club assist beginner traders.
Interactive Brokers presents one of the most competitive core trading environments available globally, with a suite of cutting-edge proprietary solutions developed for advanced traders. It supports third-party developers and algorithmic trading solutions. Beginner traders will benefit from the comprehensive IBKR Campus, one of the highest-quality educational services industry-wide.
We have conducted an in-depth review of eToro and Interactive Brokers to determine which one presents the better overall choice and which traders will benefit the most at either broker.
- Features and Platforms
- Available Markets
- Typical Spreads and Fees
- Security and Trust
- eToro vs. Interactive Brokers - Verdict
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Headquarters | Israel | United States |
Regulators | ASIC, CySEC, FCA, FSA | ASIC, Central Bank of Ireland, CFTC, FCA, MAS, SEBI, SEC |
Tier 1 Regulator(s)? | ||
Owned by Public Company? | ||
Year Established | 2007 | 1978 |
Execution Type(s) | Market Maker | Market Maker |
Minimum Deposit | $50 - $10,000 | $0 |
Negative Balance Protection | ||
Trading Platform(s) | Proprietary platform | Proprietary platform |
Average Trading Cost EUR/USD | N/A | Account and account-tier dependent |
Average Trading Cost GBP/USD | 2.2 pips | Account and account-tier dependent |
Average Trading Cost WTI Crude Oil | $0.05 | Account and account-tier dependent |
Average Trading Cost Gold | $0.45 | Account and account-tier dependent |
Retail Loss Rate | 74% | Undisclosed |
Minimum Raw Spreads | 0.8 pips | 0.1 pips |
Minimum Standard Spreads | 1.3 pips | Not applicable |
Minimum Commission for Forex | $0.00 | $2.00 |
Islamic Account | ||
Signals | ||
US Persons Accepted? | ||
Managed Accounts | ||
| Visit Website 61% of retail CFD accounts lose money. | Visit Website |
Features and Platforms
| | |
MT4 | ||
MT5 | ||
MT4/MT5 Add-Ons | ||
cTrader | ||
Proprietary Platform | ||
Automated Trading | ||
Social/Copy Trading | ||
DOM? | ||
Guaranteed Stop Loss | ||
Scalping | ||
Hedging | ||
One-Click Trading | ||
OCO Orders | ||
Interest on Margin | ||
| Visit Website 61% of retail CFD accounts lose money. | Visit Website |
Noteworthy:
eToro has more active traders, but the Interactive Brokers Investor's Marketplace offers 1,500+ services, creating a distinct advantage for traders while passive investors can benefit from Interactive Advisors.
Available Markets
Visit Website 61% of retail CFD accounts lose money. Visit Website
Most retail traders will find eToro’s 2,000+ CFDs focused on equities more than enough to find trading opportunities and achieve cross-asset diversification. Interactive Brokers, a prime brokerage and liquidity provider, presents traders and investors with 135 markets across 33 countries in 23 currencies, resulting in one of the broadest selections of assets available in the industry.
Typical Spreads and Fees
N/A Account and account-tier dependent 2.2 pips Account and account-tier dependent $0.05 Account and account-tier dependent $0.45 Account and account-tier dependent $574 Account and account-tier dependent 0.8 pips 0.1 pips 1.3 pips Not applicable $0.00 $2.00 $10 monthly after 12 monthd Visit Website 61% of retail CFD accounts lose money. Visit Website
The pricing environment is notably cheaper at Interactive Brokers. Forex traders pay a minimum trading fee of $10 per 1.0 standard lot, commission-free, versus $3 at Interactive Brokers, including a $2 commission. Equity commissions at eToro are 0.09%, commission-free for unleveraged buy orders, and 0.05% at Interactive Brokers.
Security and Trust
Australia, Cyprus, Seychelles, United Kingdom Australia, Canada, Hong Kong (SAR), Ireland, India, Japan, Singapore, United Kingdom, United States ASIC, CySEC, FCA, FSA ASIC, Central Bank of Ireland, CFTC, FCA, MAS, SEBI, SEC 491139, 109/10, 583263, SD076 36418/8-47257, undisclosed but confirmed, C423427, 208159, 433554, undisclosed, INZ000021730, undisclosed, CMS100917 N/A 1,1,1,1,1,1,2,1,1 Visit Website 61% of retail CFD accounts lose money. Visit Website
eToro has a $1,000,000 third-party insurance program underwritten by Lloyd's of London, while Interactive Brokers is a NASDAQ-listed company and constituent of the S&P 500. It remains 81.5% privately held, with $6 billion in excess regulatory capital. eToro and Interactive Brokers segregate client deposits from corporate funds, offer negative balance protection, and both rank among the most trusted brokers.
eToro vs Interactive Brokers – Verdict
eToro
Pros | Cons |
|---|---|
| Copy-trading with a community numbering almost 25 million traders | Higher minimum deposit requirement but within a reasonable range |
| User-friendly web-based trading platform and mobile app | Absence of MT4 and no algorithmic trading |
| Quality educational offering for beginner traders via videos | |
| Balanced asset selection with a focus on equity CFDs and ETFs |
Interactive Brokers
Pros | Cons |
|---|---|
| Cutting-edge proprietary trading platforms with support for algorithmic trading | Limited deposit and withdrawal options |
| Industry-leading asset selection and trading costs | |
| Superior trading tools consisting of 1,500+ services | |
| Low-cost passive investments from as little as $100 |
Interactive Brokers remains a global powerhouse with algorithmic trading support. Its clients receive cutting-edge trading platforms, a broad-based asset selection, and among the lowest cost structures industry wide. Its huge overall product and services portfolio may overwhelm many retail traders, making eToro a better choice for millennial and GenZ traders who prefer mobile social trading.
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FAQs
What is the downside to eToro?
eToro does not support algorithmic trading and maintains an above-average cost structure.
Is eToro good for investing or trading?
The commission-free direct share dealing makes eToro a better choice for long-term investors or low-frequency traders.
What happens if eToro goes bust?
eToro has a $1,000,000 third-party insurance program underwritten by Lloyd's of London. The UK, Cyprus, and US subsidiaries also have an investor compensation fund.
Is it worth copying on eToro?
eToro caters to retail traders, where approximately 80% operate at losses. Therefore, many traders will copy losing portfolios. The compensation for signal providers is not large.
Is my money safe in eToro?
eToro ensures client deposit safety by segregating deposits from corporate funds at tier 1 banks. It also has a $1,000,000 third-party insurance program underwritten by Lloyd's of London and complies with five regulators, three of which offer an investor compensation fund.
Is eToro good for the long term?
eToro provides long-term investors with a competitive product with commission-free direct share dealing, ETFs, and in-house managed thematic investment portfolios.
How much is the eToro withdrawal fee?
eToro charges $5 per withdrawal internally, and traders must also consider third-party payment processor fees.
Is eToro tax-free?
eToro does not offer tax-free accounts, and all clients must ensure they comply with local tax laws. It is best to consult a licensed professional for individual advice.
Is eToro really free?
eToro is not free and lists all applicable costs transparently on its website.
Are Interactive Brokers safe?
Interactive Brokers ranks among the safest and most trusted brokers globally compliant with eleven regulators and has a clean track record.
Is Interactive Brokers good for beginners?
While the overall product and services portfolio may overwhelm many retail traders, the educational content at Interactive Brokers ranks among the best available in the industry.
Does Interactive Brokers charge a monthly fee?
Interactive Brokers does not charge a monthly fee, except for advisory fees, where extra costs may apply.
Is Interactive Brokers good for day trading?
Interactive Brokers maintains a highly competitive infrastructure for day trading, including low costs, deep liquidity, fast order execution, and choice of trading instruments. However, market orders can be filled at extremely wide spreads.
How much money do you need to open an Interactive Brokers account?
Interactive Brokers does not have a minimum deposit requirement, ensuring clients maintain complete flexibility to manage their accounts.
What happens if Interactive Brokers goes bust?
It depends on the geographic location of the operating subsidiary. Interactive Brokers has $6 billion in excess regulatory capital and is a publicly listed company that complies with strict financial requirements, making default extremely unlikely.
Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.