Can you short sell stocks and crypto on eToro?

By:

Prash Raval

Prash is a financial writer for Invezz covering FX, the stock market and investing. For over a decade he… read more.

Updated: Dec 22, 2022

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Our in depth eToro review discusses the many features of the broker and on this page, we dive into short selling. Read on to learn if it is possible to short sell stocks and crypto on eToro and find the steps you need to take to sell. 

Can you short sell on eToro?

Yes, you can short sell on eToro, although some restrictions exist. All of the 1,200 CFD instruments offered by eToro have the option to go short, including the stock and currency market.

Short selling is a popular investment or trading strategy involving selling a market and buying it back at a lower price to profit from the difference. 

On eToro short selling is only possible via CFDs, which is not available for every market offered. Below, we have explained which markets you can short sell on eToro. 

Can you short sell stocks on eToro?

Yes, there are many stock CFDs on eToro, so it is possible to short sell. You can only short a stock during open market hours. Occasionally, certain stocks will be unavailable for shorting, mostly due to volatility and liquidity issues. 

Can you short sell crypto on eToro?

It depends on where you are located. In some regions, it is not possible to access crypto CFDs due to local regulations. This means you cannot short sell crypto. In some countries, crypto CFDs are available on eToro, meaning you can short sell Bitcoin and other coins. 

Can you short sell currencies on eToro?

Yes, foreign exchange is a popular market on eToro and it is possible to go long (buy) and short (sell) the 49 currency pairs on the platform. You can also short sell FX pairs using leverage up to 30:1. 

What is short selling?

Short selling is essentially betting that an asset will fall in price. To short sell, you borrow an asset from your broker and immediately sell it before buying it back at a lower price. The difference between the price at which you sold and then buy is your profit. You can go short on any asset, so long as your broker offers it. 

Here’s an example of how short selling works: 

1. You have a bearish outlook on ABC stock. ABC’s stock price is currently £100.
2. You borrow 5 shares of ABC stock from your broker costing £500. You then immediately sell these 5 shares. 
3. Your bearish outlook was right and ABC stock falls to £50. 
4. Now you buy 5 shares back for £250 (5 x £50) and return them to your broker. 
5. The £250 you have left over is your profit from going short. 

How does short selling on eToro work?

Short selling on eToro works by using Contracts for Difference (CFDs). These are derivatives (financial products) that act as a contract between you and eToro, whereby you agree to exchange the difference in price for an asset from when a position is opened and closed.

When using CFDs, you do not actually own the underlying asset and instead are speculating on its price only. 

CFDs are a popular way to partake in short selling because they are quick to use and offer the ability to sell fractional shares and smaller positions than traditional methods. Short selling on eToro with CFDs means you can go short on stocks with as little as £100 rather than having to sell thousands of dollars worth of an individual share. 

How to short sell on eToro?

The eToro platform is very user-friendly and you can short sell with just a few clicks. Here are the steps you need to follow to short sell on eToro.

What are the fees for short selling on eToro?

Short selling on eToro is free and there is no commission to pay. There may be other costs involved which will vary depending on the asset you are trading. First, you should consider the spread, which is the difference between the buy and sell price. If you open a short trade on the crytpocurreny market, there is a 1% transaction fee. 

If you plan to keep your short trade open for a few days or longer, you will likely have to pay overnight and weekend fees. These are charges for keeping your short trade open when markets are closed and are different for each asset class. If you are short selling as part of a day trading strategy, then these charges will not apply to you. 

What are the benefits and risks of short selling?

There are many benefits to short selling, however, there are some risks you should consider too. Below, we’ve summarised the main pros and cons of short selling on eToro.

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