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How to buy eToro shares
Since its creation, international brokerage, eToro, has been a private company, though this will soon change. In the near future, it will become publicly-traded, meaning you can invest in eToro should you choose to. With this in mind, this article explains everything you need to know ahead of the platform’s debut on the public market.
Rather than conducting a traditional (IPO) – an initial offering of shares to the public – eToro has opted to go public through a deal with a special purpose acquisition vehicle (SPAC): a company designed purely to acquire a stake in another company. EToro may be going public to source funding or improve its reputation by following public market rules.
The name of the SPAC in question is FinTech Acquisition Corp V. It was founded by banking tycoon Betsy Cohen, and it is listed on the NASDAQ stock exchange under the ticker FTCV, meaning you can invest in the company now if you want to.
Upon conclusion of the deal, eToro will be listed on the NASDAQ and anyone can buy shares, including you. Owning shares means you can speculate on the future price of eToro stock, and if the company chooses to offer them, you may be entitled to dividends.
When is the IPO?
Etoro is not going to have an IPO. The business combination agreement is expected to be finalised in Q3/21. This page will be updated with an exact date closer to the time, so make sure you bookmark it and stay up-to-date with the latest news to be prepared.
Can I pre-order eToro shares?
No. Some platforms do offer a pre-order service, such as IG in the UK, which allows users to take a position in a stock pre-IPO. However, since eToro is not having an IPO, all you can do is get ready for the first day of trading.
Where can I do this?
Once it is public, the best way to buy shares in eToro is through a broker. Or you can do so through the eToro platform. You can get involved by signing up with the broker first. Make sure you create and fund your account well in advance of the IPO so you are ready to trade from the first possible moment.
Compare the best eToro trading platforms
Once eToro stock is publicly available, you can get it through any of the brokers below. Our team of established investment experts has carefully reviewed these platforms to make sure they offer you the lowest fees and most professional service.
How to buy eToro stock, a step-by-step guide
Anyone can own shares in eToro, and it can be a great way to make your money work as hard as you do. Below are the 5 steps that you should follow to successfully invest in the company.
- Choose a broker. The first thing you need to find is an online broker platform. There are many different options to choose from, each with their own unique benefits and drawbacks. The comparison table above can help you select the right broker for you, and you can head to our comprehensive broker reviews if you’re still unsure.
- Create an account. Once you’ve selected your broker, simply go to their website and create an account. The steps required for this will vary from platform to platform, but generally you can expect to have to provide your name, email address, phone number, and some form of photo identification.
- Deposit funds. Log into your broker account and select the option to deposit funds. Depending on your broker you’ll have a variety of payment options available; most brokers accept bank transfers and debit card payments, but not all accept e-wallets such as PayPal. Select your preferred payment method and deposit the amount of money you wish to invest in eToro shares.
- Place an order for eToro stock. Search for eToro’s ticker symbol and see the current price at which the stock is trading. If you’re happy with the price, enter the amount of shares you wish to own and place your order.
- Execute your order. Once you have placed your order, your broker will automatically execute it for you and your eToro shares will be listed in your account. Congratulations, you’ve just bought shares in eToro!
What is eToro? And should I invest?
EToro is an international multi-asset brokerage company offering individuals access to stocks, commodities (like gold), options, cryptocurrencies, ETFs and more. Having been founded in Israel in 2007 by Yoni Assia, Ronen Assia, and David Ring, the company was originally named RetailFX. Since launching, eToro has grown rapidly to 20 million users by March 2021.
Etoro’s unique selling points are its transparency, accessibility and ease of use. For instance, its fees are clear, charging nothing for setting up an account or investing in stocks. Instead, there is a simple and flat $5 for withdrawals. Moreover, the concise, colour-coded interface makes investing easy to get to grips with. Lastly, there is a unique feature called CopyTrader™, which allows any user to automatically copy the trades of top investors: a useful tool that can make investing hassle-free.
Numerous brokers have gone public, like U.S. platform Charles Schwab, and many others plan on going public, such as Robinhood, and this is a common way for brokers like eToro to finance growth initiatives.
How has eToro performed in recent years?
The company’s recent success is evidenced by its financials. Having ended 2020 with a trade volume of $1.5 trillion and revenue of $600 million, this trend of exponential growth has continued into 2021, with COVID-19 lockdowns and stimulus cheques increasing the popularity of online investing.
Its financial health has been partly generated by its marketing campaigns. It has positioned itself as a social network community for traders and investors, where they can execute trades, but also see what others are doing and talk to each other. By making investing seem no more intimidating than logging into Facebook, its users have skyrocketed.
However, the company has also created controversy over its foremost offering: CFDs. These contracts allow users to gain exposure to the price of an asset without owning it outright. Furthermore, eToro offers leverage with CFDs, which if used, can increase a user’s exposure to risk if they aren’t a well-versed investor. Perhaps this is why you can find warnings all over eToro’s website stating ‘67% of retail investor accounts lose money when trading CFDs with this provider.’
Is it a good time to buy eToro shares now?
You can’t get eToro shares right now; you need to wait until it goes public sometime in Q3 2021. Before you buy shares, make sure you are comfortable with the risks, especially for a newly-traded company. Chiefly, expect there to be volatility as the market finds a price it is satisfied with.
Make sure you conduct due diligence before investing in the company, and consider its fundamentals, the wider market macro story, and also keep an eye on the technical side of things. If you believe eToro’s strong balance sheet and its new deal will mark the start of a new phase of growth, investing may be a good choice. However, never invest a penny that you can’t afford to lose.
As touched on previously, COVID-19 has increased the usage of online brokers like eToro. Nonetheless, there remain doubts about what exactly will happen when lockdowns come to an end and retail investors head back to the office: will they still have sufficient free time to invest or trade? To keep an eye on this thematic as it plays out, along with the latest developments concerning eToro, check out our analysis below:
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Buying, selling and trading eToro shares for beginners
What to do before buying shares
You should always take the time to research a stock fully before investing your money, especially if you haven’t bought shares before. The more knowledge you have, the better your chances of making a wise investment.
With that in mind, here’s a checklist to run through before you start.
- Research the company. You should always examine the fundamentals of a company first. What is eToro? How did the company get its start? How did it grow? Is eToro’s revenue and profit growth picking up? Is the company innovating? The more you know about eToro, the better positioned you’ll be to make smart investment decisions.
- Make sure you understand the basics of stock investing. Before getting involved in the stock market, make sure you have an understanding of how it works. This will ensure that you have more clearly defined goals and have thought through how you will achieve them.
- Decide between share dealing and CFD trading. Choose the type of investment strategy you want to pursue, and make sure you have carried out the necessary fundamental or technical analysis for share dealing and CFD trading respectively.
- Set the size of your budget. The golden rule of investing is never to risk more than you can afford to lose. Not every investment you make will result in a profit, so it is important to set a budget that not only allows good potential for capital growth, but also protects against overly damaging losses.
- Find the right broker. Individual brokers each have their own pros and cons. Some will have low fees but have a user interface you struggle to understand, whereas others may be a bit more expensive but come with a range of features that you want to take advantage of. Our broker reviews can help you find the right platform for you.
- Examine broader market conditions. No stock exists in a vacuum, and it’s always important to analyse the general trends of the stock market as a whole before investing. If a bear market is setting in and stock prices are falling, it’s best to wait it out and invest your money later when the stock is cheaper. If, however, the market is looking bearish, you’ll want to make your investment quickly to get the maximum benefit from rising stock prices. Our news section can help you keep on top of movements in the financial markets.
What is the difference between buying, selling, and trading shares?
If you’re new to stock investing, then it’s important to understand the basics of how to buy, sell, and trade eToro shares. Here’s a quick run-through of what’s involved in each.
This process involves finding a broker and placing an order for eToro stock, as outlined in the steps further up this page. Ideally you want to time your investment when the stock’s price is low so that you can profit by selling the shares after they increase in value.
When you sell any eToro shares you have bought, you’ll want to do so at a higher price than the one at which you bought to earn a profit.
When you sell is up to you. You might decide to hold for a long period of time, hoping to benefit from the company growing steadily throughout. Or, if you see that eToro’s stock is already up a lot compared to the price you bought it and you’ve noticed that the stock market is starting to fall, it might make sense to sell and take your profits to invest elsewhere. Equally, if the stock has fallen since you bought it and looks set to fall further, it might be a good idea to cut your losses by selling your shares.
Trading is the same process, it’s just done over shorter periods of time with the aim to make small profits on a regular basis. This means that you can make money faster and spend your profits in your day-to-day life – however, on the other side it means you can lose money faster as well. For inexperienced investors, we generally recommend making investments for at least 6 months to a year instead of making trades in quick succession.
You can trade eToro shares through buying and selling shares, or by trading with CFDs. These allow investors to speculate on stock prices and trade with leverage in pursuit of bigger gains. CFDs trading is explained further in the next section, but it is worth noting that beginners should avoid trading with leverage. It comes with large risks and is best left to experienced investors.
Share dealing vs CFD trading
When it comes to investing in any stock, the two options you have are share dealing and trading. Which one of these methods to opt for largely depends on your investment timeline, with investors thinking long term tending to go for share dealing, and those looking for short term gains pursuing a more aggressive trading strategy.
Here’s a quick summary of the two approaches, and the pros and cons of each.
Share dealing refers to the practice of holding shares in a particular company over the long term. When investing like this, you’re seeking to profit either from dividend payments or an increase in the stock’s price over time.
When investing your money this way, it is important to do thorough fundamental analysis of the company in which you are investing. You want to put your money in a stock you believe will trend upwards over time, even if there is some market volatility along the way, rather than get distracted by shorter term peaks and troughs.
- Can build wealth over time to achieve financial goals
- Don’t need to be very reactive to short-term market movements
- Some stocks will give you an income through regular dividend payments
- Takes a long time to realise any profits
- Your capital is tied up in stocks and cannot be used for other investments
If your aim is to generate profits in the short term, then you might be better off trading shares than holding them in your portfolio. Stock trades like this are executed using CFDs (contracts for difference), which allow investors to trade against the value of a stock without having to take ownership of it. When CFD trading, investors are looking to buy and sell stocks fast to profit from short-term fluctuations in value.
One aspect of CFD trading that many investors find attractive is that they allow you to trade with leverage. This means you can place large trades while only putting up a fraction of the value yourself – for instance, if a platform offered leverage of 1:10, you could put £10 into eToro shares and be able to trade £100 worth. This can maximise profits if the market moves in your favour, but be careful as it can also lead to heavy losses.
When trading using CFDs, it is key to be skilled at technical analysis and reading stock price charts. As you’re trading stocks quickly and frequently, the fundamental strength of the company in which you’re investing isn’t as important as being able to predict how its stock price will rise and fall minute-by-minute.
- Can generate fast profits if you read the market right
- Some platforms allow you to trade with leverage
- Prevents your capital being tied up so you can take advantage of investment opportunities
- Trading with leverage is risky and can lead to big losses
- Doesn’t necessarily generate growth over the long term
Consider which approach suits you best and craft an investment strategy that works for you. If you need more information, then simply take our stock trading course and read our guide to CFD trading to get you up to speed.
If neither of these options appeal to you, then you can find a variety of other ways to invest in eToro stock on this page. If, however, you’re ready to buy eToro shares now, simply select one of the brokers in the table above and get started.
How to choose a broker
With the wide variety of online brokers available these days, it can be hard to figure out which is the best service to go with. Our comparison table and in-depth reviews can help you cut through the noise, but by and large these are the aspects you should be considering when selecting a broker:
- Range of stocks available. The most important thing is that you can actually use the broker to find the shares you’re looking for. Some brokers offer more stocks than others, and many will allow you to trade other assets, such as forex and commodities.
- Fees and commissions. You want to keep as large a chunk of your profits as you can, so it’s important to make sure your broker doesn’t charge high fees that can eat into your profits.
- Regulation. You should only use regulated brokers to place trades and buy shares. Unregulated brokers can be risky and offer little to no protection if the business were to fail while you had funds in your account.
- Payment methods available. You might want to fund your broker account using a specific payment method, such as PayPal. Not all brokers accept every payment method, but using our comparisons you can search only the brokers that support the option you’re looking for.
- Reputation. One of the strongest indicators of a broker’s reliability is the reputation it has with the customers who have used it. Brokers are online businesses, and as such many user experiences can be found online. You can check these out in addition to our reviews to make sure you choose the right platform.
- Customer service. As you’re going to be investing your money using the platform, you want to check that the broker offers good customer service in case you have a query or something goes wrong.
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Fact-checking & references
Our editors fact-check all content to ensure compliance with our strict editorial policy. The information in this article is supported by the following reliable sources.
Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >