With so many online trading platforms out there, buying and selling financial assets has become as accessible as purchasing goods and services. But, which broker is best suited to your trading needs?
In this eToro vs Trading 212 comparison, we will explore key metrics including fees and commissions and safety and regulation. So, keep reading as we reveal the top-rated broker for 2023.
In This Guide
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Trading 212 and eToro are online trading platforms that allow you to sell and buy financial instruments from the comfort of your own home. Both brokers offer tons of educational materials and user-friendly interfaces which makes them perfect for beginner investors and traders.
While eToro and Trading 212 give you access to heaps of financial markets and tradable assets, these are typically divided into two main trading categories.
Firstly, traditional investments typically come with high levels of liquidity and have low minimum requirements. You will also find that the fees are usually lower when compared to alternative investment methods because they have been around for longer periods of time and are more accessible.
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67% of retail investor accounts lose money when trading CFDs with this provider.
Traders also have the ability to redeem their funds whenever they want. Traditional assets are also traded on a public market such as the New York Stock Exchange or the London Stock Exchange. You can trade traditional shares and ETFs, which means you own the underlying asset outright and are therefore entitled to any potential dividends.
On the flip side, you can use CFDs to trade securities which allow you to gain exposure to the underlying asset at a cheaper price, rather than purchasing the asset outright. Furthermore, CFD trading allows you to open long or short positions, and because you don’t take physical ownership of the underlying asset you don’t have to pay any stamp duty on a CFD trade.
Both free trading platforms provide commission-free stocks and ETFs, and heaps of other tradable instruments. With this in mind, it makes sense that eToro and Trading 212 have a combined clientele of 35 million and counting.
In terms of the fundamentals, both brokerage firms are regulated by recognized financial authorities including the UK’s Financial Conduct Authority. eToro is also regulated by CySEC and ASIC.
In this section of our eToro vs Trading 212 comparison, we will explore what tradable assets are on offer and how you can go about trading and investing with the click of a button today.
The majority of new traders favor traditional stock and ETF trading when it comes to investing for the first time. If you are interested in traditional investments then you will be more than satisfied with either broker’s selection of stocks, which include fractional shares.
For example, eToro provides access to over 2,400 shares spanning 17 international stock exchanges, including the NYSE and LSE stock exchange markets. Therefore, eToro makes creating a diversified investment portfolio easy and accessible to new and experienced traders.
With Trading 212 you can access 7 different stock exchanges and 200 different exchange-traded funds. It is worth bearing in mind that Trading 212 is primarily a CFD and forex provider, which means if you are looking for options and futures trading opportunities then you may need to look elsewhere.
When you buy ETFs and stocks without leverage, you are trading the real asset as opposed to a CFD. During our eToro vs Trading 212 review, we found that both brokers offer plenty of ETFs. Trading ETFs has multiple advantages when compared to traditional open-end assets. Some of these key benefits include investment versatility, portfolio diversification, lower fees, and more.
Trading 212 and eToro provide a ton of popular iShares and Vanguard ETFs, which is great if you are looking to invest in a broad basket of securities through a single investment.
When it comes to forex trading eToro provides more than 50 currency pairs and Trading 212 offers more than 150. However, when you trade forex with eToro you get much tighter spreads when compared to Trading 212, which is something you need to consider if you are trading on a budget.
Up until this point in our eToro vs Trading 212 review, there hasn’t been much to separate these two free trading platforms. But, when it comes to crypto trading, eToro comes out on top. At eToro you can access 16 different altcoins, whereas Trading 212 does not support crypto trading.
As a result of the Financial Conduct Authority’s policy statement on crypto derivatives in November 2020, Trading 212 took the decision to suspend the trading of all cryptocurrencies on its platform.
This raises the question as to how eToro responded to the FCA’s ruling and the answer is simple. When you trade or invest in cryptos on eToro you are not trading derivatives or CFD instruments, rather, you are buying the underlying asset itself.
When you buy cryptos on eToro there are no trading commissions and no overnight financing fees. The list of digital currencies covers the most popular altcoins, which means that if Bitcoin trading is your particular area of interest, eToro supports it.
Trading 212 and eToro offer thousands of stocks and ETFs from most major stock exchanges including the United States, United Kingdom, and Europe, just to name a few. Both brokers give you the ability to invest in fractional shares of otherwise expensive major stocks. This means that rather than spending thousands or hundreds of dollars on individual major stocks listed on the NYSE and LSE, eToro lets you invest in stocks with just $50 thus giving you fractional ownership of major stocks across 17 different international markets. Investing in fractional shares is a low-cost and effective way to diversify your investment portfolio.
When it comes to account types, you can choose between a live account and a demo account with eToro. eToro is very much a broker that is designed to meet the needs of both new and experienced investors. Regardless of whether you want to trade forex, stocks, or cryptos, eToro allows you to do all of these things via a single live or demo account.
Turning our attention to Trading 212, this CFD trading platform provides 3 separate account types.
On this front, eToro keeps things much simpler because you can monitor and manage your entire investment portfolio with a single account, rather than having to switch between accounts to track your current portfolio value.
Trading 212 and eToro have strong reputations as discount brokers that offer commission-free trading, as well as low non-trading fees. At any rate, there are numerous fee types that you should be aware of when choosing an online investment platform.
Therefore, in this section we will explore the main fees and commissions that you are likely to face when trading with either eToro and Trading 212.
If you are looking to invest in ETFs and stocks both brokers in question provide this service with the added benefit of not having to pay share dealing charges. Simply put, some brokers charge a fee for every buy and sell transaction that is placed.
When you invest in shares of stock listed on the LSE, you will have to pay stamp duty tax. Like the majority of UK trading platforms, when you buy LSE stock through Trading 212 you will pay stamp duty tax of 0.5% of the total share transaction. However, eToro waives this 0.5% stamp duty tax which allows you to purchase shares of stock listed on the London Stock Exchange without having to worry about paying this fee.
eToro aims to make online trading as cost-effective and accessible as possible. In keeping with this mission, CFD trading is 100% commission-free, regardless of the financial instrument and the market you pick.
While Trading 212 boasts of its zero-commission offering for all CFD trades conducted on its platform, there is a 0.5% currency conversion fee that is applied to all non-UK assets.
For instance, let’s suppose you are interested in forex trading, and you decide to trade the USD/JPY currency pair. At Trading 212 you would have to pay a 0.5% currency conversion charge. This could be an issue for day trading strategies that benefit from small profit margins.
On the other hand, at eToro, there is only one account base currency – USD. This means that if you fund your brokerage account with the same currency as your bank account you can avoid the conversion fee.
So far in our eToro vs Trading 212 comparison, the former has been taking the lead. However, when it comes to non-trading fees eToro does charge a monthly inactivity fee of $10 after 12 months of no trading activity, as well as a $5 withdrawal fee. On the flip side, Trading 212 has very low non-trading fees with zero deposit fees and account fees.
With Trading 212, there is no charge to deposit funds into your CFD and Invest accounts with a bank transfer. But, you will incur a 0.7% deposit fee when funding your Invest account with any amount over $2,000 via e-wallets like PayPal, or debit cards and credit cards.
With that said, here is a quick breakdown of all the most important fees and commissions charged at eToro and Trading 212:
In terms of the overall user experience, both eToro and Trading 212 are great discount brokers for new traders who are just stepping into the online trading scene.
For instance, the initial task of creating an account and depositing funds is very simple and easy and can be completed in a matter of minutes from your desktop or mobile device. Furthermore, when you want to trade financial assets you can use the search function to find exactly what you are looking for. Otherwise, you can browse through heaps of financial instruments via the asset libraries, which are broken down into relevant categories.
As a result, you can browse through securities based on relevant asset classes, such as commodities, futures, stocks, or CFDs. eToro goes one step further and divides its stocks by ‘sectors’, which means you can use filters to narrow the search results down for higher accuracy and specificity.
As for the actual trading process, this is as user-friendly as you can get. ETF, crypto, CFD, options, futures, Stock trading and more can be executed with the click of a button from the comfort of your own home. Online trading has never been more accessible, and these two brokers make it even easier by allowing you to enter and confirm your investment amount instantly.
The mobile trading sector has been experiencing rapid expansion ever since online brokers made online trading accessible via trading applications. The convenience of and ease with which you can buy and sell assets wherever you happen to be is something that attracts many new and advanced investors.
During our broker review, we found that both Trading 212 and eToro support mobile trading apps which are compatible with iOS Apple and Android devices. This means that you can deposit funds into your brokerage account, buy and sell financial instruments, and set price alerts and notifications from your mobile device in the same way that you could from a desktop device.
Both Trading 212 and eToro trading apps feature the same functionalities as their web platform counterparts. A handy feature includes push notifications which alert you to price movements, margin calls, and execute orders in real-time.
While both these brokers in question are best suited to beginner traders, you do have the option to manually pick and choose the assets you wish to invest in, or you could take advantage of several automated trading tools and features that are designed to help you manage your investments in a passive, hassle-free way.
eToro has two stand-out features called CopyTrader, which is a social trading tool, and CopyPortfolio which is an investment fund that allows you to invest in a theme or a portfolio of top-ranking eToro investors.
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Copy trading allows you to copy the trades of other advanced investors like-for-like. With this social trading feature, you can browse through tons of trader profiles on the eToro platform. You can research each profile in terms of risk ratings, past performance, average trades per week, and much more.
All in all, when you have chosen the trader you wish to copy, you can start copy trading with a $200 minimum investment at the click of a button, and eToro’s automated trading algorithm will take over the rest for you.
CopyPortfolio works in the same way but this allows you to trade in an entire investment theme or portfolio of other top-rated eToro investors. The minimum investment for CopyPortfolio is $5,000 and there are plenty of checks carried out beforehand to decide whether CopyPortfolio suits your trading needs and experience.
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Trading 212, on the other hand, does offer robo trading that provides fully automated trading strategies for popular assets including forex and stocks. Nevertheless, this is rather limited when compared to eToro’s copy trading tools and services.
Demo accounts, otherwise referred to as paper trading accounts are perfect for both new and advanced traders looking to put their trading strategies to practice with paper funds in a virtual trading environment.
Moreover, with paper funds, you can experiment with different investment strategies without having to risk your own capital. During our research, we found that both trading platforms provide demo accounts.
When you open a demo account with eToro you begin with $100,000 worth of paper funds, which is a generous amount for you to start learning. Additionally, Trading 212 provides a paper trading account with an initial balance of $50,000.
Something worth bearing in mind is that eToro keeps things simple and easy with a single demo account that allows you to buy and sell tradable assets via a single account. Trading 212 offers separate demo accounts depending on whether you want to trade CFDs or traditional assets like stocks and ETFs.
When it comes to depositing and withdrawing funds, both Trading 212 and eToro make this a very easy and user-friendly process. You can use a wide range of supported payment options from debit and credit cards to e-wallets and bank transfers.
As we have already mentioned there is only one account base currency at eToro which means that non-USD deposits incur a 0.5% conversion fee. But, the social trading platform waives the 0.5% stamp duty fee and provides 100% commission-free trading.
In terms of minimum deposits, there is a $200 minimum investment when you open an account with eToro, whereas with Trading 212 the minimum deposit is £1. As for processing times these will vary depending on the type of payment method you use. For instance, deposits made with credit and debit cards, and e-wallets such as PayPal and Skrill appear in your account instantly, however, deposits via bank transfers can take one or two business days.
You can contact the eToro customer support team via live chat and a web-based ticketing service. Typically, the response times are very fast, but this varies depending on busy periods. Customer service is available 24/5 as the team is unavailable during weekends. To access the live chat function you need to navigate to the FAQ section from the eToro help center.
Trading 212’s customer services can be reached by email 24 hours 7 days a week. The responses are relevant and prompt but if you want to contact them via telephone or live chat these options are simply not available.
In terms of the fundamentals, Trading 212 is regulated by the Financial Supervision Commission and the Financial Conduct Authority. For client fund protection Trading 212 all users’ funds are held separately in segregated bank accounts that are insured by the Financial Services Compensation Scheme and the Investors Compensation Fund.
The protection covers you should the broker liquidate its assets, up to £85,000 in the UK and the ICF cover is up to 20,000 euros. Trading 212 also provides negative account balance protection, which in short means that you cannot lose more than the amount you have deposited.
eToro is regulated by the UK’s Financial Conduct Authority, the Cyprus Securities and Exchange Commission, and the Australian Securities and Investment Commission. eToro’s UK-based clients are covered by the Financial Services Compensation Scheme up to £85,000, and EU-based clients are protected by the Cypriot Investors Compensation Fund by up to 20,000 euros. eToro also provides negative balance protection.
To summarize, Trading 212 and eToro are top-rated online trading platforms with millions of daily active users. Most beginner traders are attracted to both brokers because they can trade and invest in financial instruments without having to pay a penny in commissions. Both allow you to trade fractional shares and other assets via fully-fledged mobile trading apps.
But the broker that we recommend for 2023 as the overall best trading platform for beginners is without a doubt eToro. With access to both live and demo accounts, commission-free trading across 17 international markets, copy trading, and social trading features, eToro offers a complete package and service when it comes to online trading. Even for exotic forex traders and Ethereum trading, eToro has you covered.
On the whole, we have examined everything you need to consider when choosing the best trading platform for 2023 so you can make the best decision based on your trading needs.
So, to start trading assets on a 100% commission-free basis, click on the link below and open an account with eToro today!
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A Trading 212 demo account provides you with $50,000 worth of paper funds for you to practice online trading in a risk-free simulated environment. Depending on whether you want to trade CFD derivatives or traditional stocks and ETFs you will need to open a separate CFD or Invest demo account.
A stop-loss order is an order that a trader sets with a broker to sell or buy an asset once it has reached a predetermined price. The aim of a stop-loss order is to minimize the potential losses on a position.
Launched in 2007, eToro is a social trading platform that is regulated by major financial authorities including the FCA, CySEC, and ASIC. eToro offers 100% commission-free stock, CFD, ETF, crypto, index, and commodity trading. This raises the question as to how this broker makes money. The answer is simple, through competitive spreads, and low non-trading fees such as $10 inactivity fees and $5 withdrawal fees.
With eToro you can access a huge range of cryptos for trading. With exposure to 17 of the most popular digital currencies, you can build a diversified portfolio with the click of a button with 0% commission. The range of cryptos are as follows: Bitcoin (BTC), Ethereum (ETH), Ethereum, Classic (ETC), Dash, Litecoin (LTC), Bitcoin Cash (BCH), Stellar Lumens (XLM), NEO (NEO), EOS (EOS), Cardano (ADA), IOTA, TRON, ZCash, Tezos, Chainlink, Uniswap, Dogecoin.
eToro users benefit from 0% commission trading, as well as zero account fees and no management fees. The initial process of creating and opening a brokerage account is also free. There is a low withdrawal fee of $5 and a $10 inactivity fee after 12 months. When you buy cryptos on eToro you take ownership of the underlying asset. The only trading fees that you will be charged are tight spreads. For example, the spread for Bitcoin trading is 0.75%, and the spread for EUR/USD is just 1 Pip.
Dassos Troullides is an experienced finance writer who specializes in CFD, stock, and crypto trading. He uses his experience and time spent in the forex industry to simplify complex financial topics for easy, informative reading. Dassos also writes for BuyShares.com, InsideBitcoins.com, LearnBonds.com, ForexCrunch.com, and EconomyWatch.com
Best UK Stock, Forex, CFD, Crypto, Social or Day Trading Platform that meets your needs.
