With a looming economic and markets crash, there are a lot of cheap gems that can be bought on exchanges worldwide. Broker platforms like eToro and AvaTrade are a great gateway into the world of trading for small investors who want to wet their feet in the lucrative world of forex, cryptocurrency, indices, ETFs and other asset trading.
For all our comparisons, this included, we take a look at seven primary areas: Commissions & Fees, Offering of Investments, Platforms & Tools, Research, Customer Service, Mobile Trading, and Education.
Please keep in mind that both of these brokers are market makers which means that their platforms are closed environments which are often subject of manipulations.
Also keep in mind that at least three quarters of traders lose money when they trade CFDs. Losing money is especially highly probable when you use leverages, so we advise against trading on a margin (synonym for leverage trading) and just invest in stocks or ETFs (possible to invest in real stocks and ETFs on eToro, while you can buy CFDs on AvaTrade).
AvaTrade offers only CFDs on cryptocurrencies while you can buy actual coins on eToro.
AvaTrade does offer actual forex and forex options while everything else is in the form of CFD trading on this platform.
eToro vs AvaTrade at a glance
|Instruments||Stocks, CFD, Forex, Crypto||Stocks, ETFs, CFD, Forex, Crypto|
|Minimum Deposit||€/£/$100||$200 ($50 in US) / $25 for Crypto|
|Regulator||ASIC (Australia), IIROC (Canada), FSP (S Africa), FSA (Japan), CBI (EU), FSRA (Middle East)||FCA, CySec, ASIC|
|Mobile apps||iOS, Android and Windows||iOS, Android and Windows|
|Trading Software||MT4, MT5, WebTrader, AvaOptions, AvaTradeGO, DupliTrade||WebTrader|
|Base currency||GBP, USD, EUR, AUD||USD|
|Deposit/withdrawal methods||Bank Wire, VISA, MasterCard, Boleto, DinPay, FasaPay, gCard, Neteller, PaySec, SafeCharge, Skrill, VoguePay, WebMoney||Bank Wire, VISA, MasterCard, Giropay, Local Bank Deposits, Local Bank Transfers, Neteller, PayPal, Skrill, UnionPay, WebMoney, Yandex Money|
|Social Trading||Yes, via integration of external providers like ZuluTrade and DupliTrade.||Automate your trades via Copy Trading – Follow profitable traders. Open and close trades automatically when they do.|
|Trade Signals||Yes, via MQL5||Yes, via Copy Trading|
|CFDs Spreads||FTSE 0.5pt|
GBPUSD 1.0 var
Stocks 0.13 Abv Market
GBPUSD 4 pips
Stocks 0.24% var
|Forex Spreads||GBPUSD 1.0 var|
EURUSD 0.7 var
EURGBP 1.7 var
|GBPUSD 4 pips|
EURUSD 3 pips
EURGBP 4 pips
|Cryptocurrency||Offers only Crypto CFDs with tight spreads, ideal for speculators||Offers both real coins and CFDs, with their own wallet and exchange plus free crypto tax calculator.|
|Spread on Crypto CFDs||BTC 1%, ETH 2%||BTC <1%, ETH 2%|
|Coins||BCH, BTC, BTG, ETH, LTC, XRP, EOS, DASH||BTC, ETH, BCH, XRP, DASH, LTC, ETC, ADA, MIOTA, XLM, EOS, NEO, ZEC, BNB|
Before we move on, here is another reminder about the high risks involved with CFD and leveraged trading:
CFDs are complex financial instruments and come with a high risk of losing money quickly due to leverage. You should stop and think through whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
AvaTrade vs eToro: General info
AvaTrade is a platform that has provided brokerage services since 2006, amassing a respectably-sized user base of more than 200 thousand individuals with its straightforward, fair business values and practices.
This fully regulated broker is located in Dublin, Ireland and has a presence in Europe, South Africa, the Middle East, British Virgin Islands, Australia and Japan. The platform mostly deals with forex and CFDs on stocks, commodities, indexes, forex, and cryptocurrencies. AvaTrade records monthly trade volumes of cca. 2 million trades, through which traders exchange around 60 billion pounds during that same timeframe.
AvaTrade is regulated by the Central Bank of Ireland and licensed by MiFID in the European Union. It is also regulated by ASIC in Australia, the Financial Services Commission (FSC) and Financial Services Agency (FSA) in Japan, as well as by the B.V.I Financial Services Commission in the British Virgin Islands.
As of 2016, AvaTrade is part of the South African market under the name “Ava Capital Markets Pty Ltd”, regulated by South African Financial Sector Conduct Authority (FSCA No.45984). The company also has sales centers in Dublin, Paris, Milan, Sydney, Tokyo, Madrid, Mongolia, Beijing, Nigeria, Santiago, and Johannesburg.
Since its launch in 2006, eToro has become a multinational sensation and is now active in over 140 countries.
eToro is a well established financial platform offering a wide range of financial trading services. They have expanded their offering to include crypto currencies with some unique benefits such as fee-less trading and margin trading. It is also one of the rare services where you can buy crypto with PayPal.
Below is a tabular overview of eToro platform:
|?️ Country of regulation||UK, Cyprus, Australia|
|? Trading fees class||Low|
|? Inactivity fee charged||Yes|
|? Withdrawal fee amount||$5|
|? Minimum deposit||$200 ($50 for US traders) $25 for crypto investing|
|? Time to open an account||1 day|
|? Deposit with credit card||Available|
|? Depositing with electronic wallet||Available|
|? Number of base currencies supported||1 – USD|
|? Demo account provided||Yes|
|?️ Products offered||Stock, ETF, Forex, CFD, Crypto|
Who has better fees and spreads: eToro or AvaTrade?
AvaTrade offers competitive fees that are, however, subject to frequent changes so it is best you take use of their calculator to see how much will your pay in fees for your position held on AvaTrade. They are transparent about this which is a big plus.
|• Low trading fees||• Inactivity fee|
|• No withdrawal fee||• Administration fee|
All trading on AvaTrade can be subject to charges and fees. AvaTrade reserves the right to cancel any excess trades or exposures that exceed the outlined threshold limits, all cancelled trades will be closed at their opening rates.
Below is a tabular overview of fee terms:
|Assets||Fee level||Fee terms|
|S&P 500 CFD||Low||The fees are built into spread, 0.5 is the average spread cost.|
|Europe 50 CFD||Low||The fees are built into spread, 1 pips is the average spread cost.|
|EURUSD||High||The fees are built into spread, 0.9 pips is the average spread cost.|
|Inactivity fee||High||$50 per quarter after 3 months of inactivity|
The platform also reserves the right to modify its threshold limits, affected clients will be notified in advance and may be required to reduce their exposure.
Trading fees on platforms such as AvaTrade are influenced by the instrument you trade, leverage you use and duration of your contract. Depending on these three factors, you pay varying amounts of commission to the platform.
Overnight or swap or rollover fees are also charged on AvaTrade for the leveraged positions. NOTE: these fees can sometimes be positive and your account gets credited with funds instead of being charged. This depends on the assets you trade and if your position is long or short.
You can use the following formula to calculate your Overnight Interest amount:
Trade Size x End of Day Market Price x Daily Overnight Interest = Daily Overnight Interest Charged/Paid*
The important thing to note is that AvaTrade is very transparent about their fees and spreads and you can find calculating formulas or use their calculator to find out the fee your will be paying.
Fees vary, depending on the asset and trader’s region (for example, eToro offers feeless trading of ETF to EU traders).
Stock fees and ETF fees
eToro charges low fees for these asset classes.
NOTE: if you trade without leverage, you can buy actual stocks and ETFs on eToro. When you use leverage, then you trade CFDs.
For EU traders, there is no commission whatsoever. For non-EU, fees charged are low in comparison to direct competitors like Plus500 or Trading212.
|Assets||Fee level||Fee terms|
|S&P 500 CFD||Low||The fees are built into spread, 0.75 is the average spread cost.|
|Europe 50 CFD||Low||The fees are built into spread, 3 is the average spread cost.|
|EURUSD||High||The fees are built into spread, 3 pips is the average spread cost.|
|Inactivity fee||Low||$10 per month after one year inactivity|
Cryptocurrency fees on eToro
Although eToro does not charge any fees for opening or closing trades, it does charge a spread that varies depending on the instrument, e.g. 0.75% for Bitcoin (BTC) and up to 3.45% for certain trading pairs, such as ZEC/ZHF.
In addition to this eToro charges a flat $25 payout fee while deposits are free.
These are fees that eToro charges for your leveraged positions. It is essentially an interest rate you pay them for loaning you money so you can trade with leverage and on your margin.
These fees are also asset-specific and are paid on the borrowed amount. For example, if you have $1000 margin and you went a 3x leverage on stocks – that means that you have a position of $3000 and pay overnight fees for the $2000 that is borrowed to you from eToro.
Minimum deposit & buying limits on eToro and AvaTrade
AvaTrade has 4 base currencies that you can use to fund your account and the minimum deposit amount is set at 100 units of each currency:
Deposit Via Credit card, Wire Transfer or E-wallets:
USD account – USD $100
EUR account – €100
GBP** account – £100
AUD** account – AUD $100
There are no maximum deposit limits on AvaTrade outside the limitations imposed by the banks and payment processors.
There are no upper limits how much you can deposit if you use bank wires as a deposit method. There are maximum amounts you can deposit with other methods: $40,000 in the case of credit/debit cards, and either $10,000 or $20,000 in the case of electronic wallets.
There is a minimum deposit amount you need to put in on eToro.
You must have $200 to participate in CopyTrading and make a minimum investment of $5,000 for CopyPortfolios. The minimum quantities for manual positions are based on the instrument.
For currencies (such as cryptocurrencies) and commodities, it is just $25. For stocks, it is $50. Finally, for ETFs and indices, it is $200.
Deposit & Withdrawal methods
AvaTrade offers a broad range of deposit methods that vary from country to country. Credit cards and wire transfers are default methods available to all users, globally. There are other deposit ways for certain regions such as e-payments like Skrill, WebMoney and Neteller. This is however, not available to the EU and Australian clients.
Same methods can be used to withdrawals but bear in mind that you will need to use the same method for deposit and withdrawal processes. The payment option you choose will need to be under your name.
Among crypto currency platforms, eToro stands out as one of the few platforms that offer users the ability to purchase crypto currencies via PayPal in combination with various other payment options.
Other deposit and withdrawal options include:
- wire transfer (Swift and SEPA)
- Credit Card
What can you trade on eToro or Avatrade?
AvaTrade offers several types of tradable assets on the platform. Forex and Forex options can be traded with real assets while all others are in the form of CFDs:
|Currency pairs (#)||47|
|Stock index CFDs (#)||13|
|Stock CFDs (#)||1,900|
|ETF CFDs (#)||145|
|Commodity CFDs (#)||6|
|Bond CFDs (#)||–|
|Futures CFDs (#)||–|
As a multi-asset brokerage, eToro allows users to trade thousands of financial instruments, including over a dozen crypto currencies (all major coins such as Bitcoin, ETH, XRP, IOTA, EOS, XLM, ADA, EOS etc). Based on the concept of social trading, eToro is designed to be suitable for both new and experienced traders.
Leverages and margins
Leverages on AvaTrade go from 2:1 to 400:1, depending on the asset CFD you choose to trade.
Cryptocurrencies are limited by the ESMA regulations to 2:1. Stock, bonds&treasuries and ETF CFDs can be traded with a 20:1 leverage.
Indices CFDs can be traded with a whopping 400:1 leverage. Leverage on commodities CFDs can go as high as 200:1.
The following limitations are defined by the European Securities and Markets Authority (ESMA), and apply to retail clients of eToro (Europe) Ltd (CySEC regulated) and eToro (UK) Ltd (FCA regulated):
- x30 for major currency pairs (such as EUR/USD)
- x20 for non-major currency pairs (such as EUR/NZD), Gold and major indices
- x10 for commodities other than Gold and non-major equity indices
- x5 for CFD stocks and ETFs
- x2 for cryptocurrency
The following limitations apply to Professional clients and clients of eToro Australia Capital Ltd (ASIC regulated):
- x400 for currency pairs
- x100 for commodities and indices
- x20 for selected CFD stocks
- x10 for other CFD stocks and ETFs
- x2 for cryptocurrency CFDs
Trading platforms on AvaTrade and eToro
The platform itself offers four types of trading software:
MetaTrader 4/5 and WebTrader – popular trading platform which gives the individual all the tools he needs to start trading.
AvaOptions is a FX Options trading platform that provides streaming prices of call and put options for major currencies along a diverse set of strike prices and dates. The platform provides users the ability to trade plain vanilla options or enter complex hedging strategies.
Automatic trading platforms like ZuluTrade/DupliTrade – Automated trading platforms enable traders to copy signals or mirror complete strategies in order to profit from the experience and knowledge of successful traders.
AvaTradeGo – This is the in-house built mobile application of the platform. Provides users with trading experience on the go, letting them trade more than 250 instruments all in the palm of their hand. Lets you manage multiple MT accounts and switch between demo and real accounts. AvaTradeGo comes enhanced with a feature called “Market Trends” which lets you track community behavior and gives the platform a social dimension.
eToro has it own proprietary web trader platform along with mobile platforms for all popular operating systems.
With its neat design and advanced functions, eToro did a great job of packing good design with functionality. The work flow is intuitive, menus and buttons are where you expect them to be, everything is labelled correctly and the color scheme is pleasant.
It is hard to customize though, as the panels are fixed. One exception is the watchlist, which is easy to configure.
Avatrade accepts traders from Australia, Thailand, Canada, United Kingdom, South Africa, Singapore, Hong Kong, France, Germany, Norway, Sweden, Italy, Denmark, United Arab Emirates, Saudi Arabia, Kuwait, Luxembourg, Qatar and most other countries.
Traders can not use Avatrade from United States, Belgium, Zimbabwe, Iran, Iraq, India, Pakistan.
Residents of most countries are allowed to trade on eToro, as eToro bars only 36 countries (of which a big chunk are African countries and poorer thirld world countries).
“Customer support is available by email, phone, or live chat. Support is available in multiple languages and local numbers are available in many areas.”
AvaTrade prides itself for its multi-lingual customer support provided in 14 languages, so no matter where you are, you are probably covered. Customer support is available via email, phone, or live chat on the AvaTrade website.
In fact, AvaTrade offers local phone numbers you can call for countries all across the globe.
eToro has a thorough help center that provides basic information about trading as well as answers to the most common user problems. In addition, eToro only offers a simple ticket system for the majority of its user complaints and the answers are often slow. Beyond the traditional support lines, eToro also answers customer queries via social media. As a beginner-friendly platform, eToro also offers a variety of training materials and customer support for users, ensuring that help is at hand when it’s needed.
Trust and reputation
AvaTrade is in business for more than 12 years and claims to have 200,000 registered customers globally executing more than two million trades a month. The company’s total trading volumes surpass $60 billion per month.
It has a decent 4.2 average rating score on Trustpilot out of 2500 reviews. However, it has a terrible 1.9 score on the forex ratings platform ForexPeaceArmy.
There are definitely a lot of polar opposite testaments about the platform and their service: from outright scam accusations to marveling and applauds. Our advice is always not to put large sums of money on these platforms, keep it under your pain threshold, so you can easily swallow a potential loss caused by a platform fault.
Funds security and protection schemes
Users from EU are protected via the ICCL Investor Compensation Company Ltd, which is an Ireland’s statutory ‘fund of last resort’ for customers of authorised investment firms. The protection is valid for amounts up to €20k.
Clients from other regions are not under any compensation scheme which something to bear in mind, especially if you hold larger sums of money on the platform.
Traders with crypto CFDs have no protection, no matter the region they come from since cryptocurrencies are not regulated in any jurisdiction across the globe.
As a regulated platform, eToro is governed by the highest standards of accountability and transparency and is licensed to offer its services to large parts of the world. Currently eToro is regulated by the Cyprus Securities & Exchange Commission (CySEC).
In terms of cyber-security, eToro platform is extremely safe and never had any issues with hacking attacks or user fund losses. eToro also takes precautions to ensure the funds and personal information of clients are safe. Traditional funds remain secure in European banks of tier 1.
To make an informed judgement call, we highly advise that you inspect the platform for two criterias:
- how you are protected if something goes wrong
- what the background of the broker is
How you are protected
eToro operates three legal entities and serves customers based on their residency. This matters because the entity you belong to defines the amount of protection you get.
- Citizens of the United Kingdom can open an account at eToro (UK) Limited and be protected by the FCA. If eToro runs into trouble and becomes insolvent, eToro UK clients can expect to be compensated by the maximum amount of £85,000 guaranteed by the Financial Services Compensation Scheme (FSCS).
- Australian traders are served by eToro Australia, which is under the regulation of ASIC, the Australian financial authority. ASIC however does not provide any obligatory investor protection for a pre-set amount.
- Other investors will have their live trading accounts with eToro (Europe) Limited, which is regulated by the Cypriot financial authority, CySEC. The amount of investment protection coverage at eToro Europe is a maximum of €20,000. This threshold is set by the Cypriot Investors Compensation Fund.
Here is a tabular summary for quick comparison:
|Country of clients||Protection amount||Regulator||Legal entity|
|United Kingdom||£85,000||Financial Conduct Authority (FCA)||eToro (UK) Ltd.|
|Australia||No protection||Australian Securities and Investments Commission (ASIC)||eToro AUS Capital Pty Ltd.|
|Other clients||€20,000||Cyprus Securities and Exchange Commission (CySEC)||eToro (Europe) Ltd.|
With all that in mind, you should remember that there are no regulations for cryptocurrencies. Because of this, if you engage in cryptocurrency trading or other crypto-related investments, there is no insurance from the investor compensation schemes within the UK or Cyprus. The lack of regulations also means that if you have a complaint, you cannot file it with your financial ombudsman service.
There is no investor protection for cryptos. There is also no negative balance protection for traders from non-EU countries.
Despite this, eToro takes pride in working to resolve issues as seamlessly as possible. In addition, there are numerous social platforms where you can register complaints, which may influence other users.
Education & research
AvaTrade focused a lot on this segment of their platform with Sharp Trader, the premium educational website with exclusive content for AvaTrade customers. Sharp Trader offers a comprehensive range of videos, articles, daily news and trading tools, taking you from trading fundamentals to the advanced strategies of leading professional traders.
AvaTrade provides an economic calendar and limited research through sharptrader.com as well. AutoChartist intra-day updates feature short-term technical signals and there are sections for economic news, fundamental analysis of assets etc.
eToro does have a research and education section with lots of videos but, in all honesty, there is much better information on YouTube and trading websites, for free. So, this segment of eToro is average at best.
AvaTrade can access third-party platforms like ZuluTrade for copy and social trading. There is also support for automated trading platform DupliTrade which is a MT4 compatible platform that allows traders to automatically follow experienced traders’ signals and strategies in real time. Another MT4 integrated service is MQL5, a signal service that has thousands of external signal providers you can use when trading.
eToro’s next generation investment product CopyPortfolio is also a feature not found on any other crypto currency platform. CopyPortfolios allows eToro users to easily invest in top trader portfolios so they can copy the trades of the best traders on the website. eToro users who invest in a CopyPortfolio let eToro manage their capital professionally and avoid the guesswork of trading.
In addition, eToro also offers a unique social feature known as CopyTrading which allows users to automatically copy the trades of other successful traders based on specific conditions.
Currently eToro also offers margin trading and lets its users trade crypto currencies with up to 2 times leverage.
You can set up an AvaTrade demo account, that is fully features just like the real accounts, with only an email and telephone number.
If you decide to switch over to live account, you will need to pass verification process that requires standard documents for ID verification: proof of identity and proof of residence.
eToro does have a demo account where you can hone your skills and trade with fake money. When you are ready to take the training wheels off, you will need to verify your account and deposit funds to start trading with real money.
Final verdict: who is better between eToro and AvaTrade?
Depends on what you are looking for? Are you a newbie who wants to learn by copying other traders? Then you should go for eToro.
Are you interested in trading real stocks, ETFs or crypto? Again, beter choice is eToro.
If you are looking for tighter spreads on CFDs – then your choice should be AvaTrade. Also, AvaTrade won’t charge you a withdrawal fee while eToro will.
If you don’t want to pay for conversion fees (it is not that big though) as well, then AvaTrade is for you since they have 4 base currencies against eToro’s only one – USD.
If you are experienced with MT4 and would like to keep trading on that platform – then go for AvaTrade.
Learn more how eToro stands against other brokers and crypto exchanges in these articles:
CaptainAltcoin's writers and guest post authors may or may not have a vested interest in any of the mentioned projects and businesses. None of the content on CaptainAltcoin is investment advice nor is it a replacement for advice from a certified financial planner. The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of CaptainAltcoin.com