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Does Etoro have hidden costs?
Wondering if Etoro applies hidden costs when you invest in its trading platform ? The quick response is that there are no fully hidden costs, but certain expenses are not always highlighted. We think in particular of the Spread , which can influence your results in a more or less visible manner. In this article, you will find out why some users speak of “hidden costs”, how to identify real expenditure positions and what strategies to use to avoid unpleasant surprises.
Table of contents
Etoro Fresh hidden: a transparent pricing structure ... but incomplete?
To start, Etoro presents himself as an online broker simplifying access to financial markets . In particular, it offers the purchase of actions , ETF , cryptocurrencies or CFD positions with lever effect . The platform often communicates on the absence of a commission for the purchase of actions in cash, but this formula does not cover all the costs you may meet.
Focus on the Spread : the element that arouses most of the questions around the possible hidden costs . The Spreadad is the difference between the price at which you can buy an instrument and the price at which you can resell it at the moment T. This margin can vary depending on the market conditions and, even if it is not billed as a separate position, it represents an indirect transaction fee
The different costs at Etoro
To find out if a broker applies “hidden” costs, you have to look at each category of prices:
- Withdrawal costs : set at $ 5, regardless of the amount you decide to repatriate.
- Conversion fees : Applied if you drop or remove in a currency other than the USD. Often, it is a percentage (eg 0.5 %) of the converted amount.
- Inactivity fees : taken after 12 months without connection, up to $ 10 per month until your balance is zero.
- Fresh Overnight : Also called swap , they apply when you keep CFD positions open from one day to the next.
- Spread : This is where the question of “invisible costs” really arises. For certain instruments, Etoro increases the difference between the purchase price and the sale price, which can inflate your total invoice without being billed in the form of a clear line.
The main point to remember is that, although all these costs are listed on the official website, the SPREAD is not always clearly quantified. It depends on the supply and demand on the financial instrument , but also on the commercial policy of the platform.
Etoro Fresh hidden: Zoom on the Spread, why is it sometimes seen as a hidden cost?
Definition and role of the Spreade
The SPREAD designates the difference between the “BID” price (sale) and the “ASK” price (purchase). In a classic scholarship environment, the trader generally pays the broker commission On Etoro, the absence of an commission on certain instruments (such as actions ) is put forward, but the platform is remunerated on other aspects, including this famous price difference.
When you buy a cryptocurrency for $100 but can only sell it for $99 at the same time, this means there is a $1 difference called a spread . On traditional platforms, this spread is usually very small on popular assets. But some platforms like eToro may intentionally widen this spread: this is called a spread markup . This surcharge acts as a hidden transaction fee, because you pay it without it being clearly displayed.
Less liquid markets
On less liquid active ingredients, such as certain cryptocurrencies or poorly exchanged currencies, the “BID/ASK” gap can be wide. Etoro can add his own margin to pay himself. Result: the risk of initial loss , if you decide to resell immediately, is sometimes higher than it seems. Unlike a conversion fee or withdrawal costs , this surplus does not appear black on white in your statement, but concretely affects your profitability.
How to identify the impact of the Spread on your positions?
To find out if the spread really increases your costs :
- Compare the price of an asset on eToro with other sources in real time.
- Check the exact difference between the price you can buy and the one you could resell immediately.
- Make a quick estimate: if the gap costs you more than the commission of a traditional broker, you will know where the additional cost is.
Costs often perceived as “hidden”: how to understand and get around them
Inactivity fees: the small line that costs passive users
If you leave your inactive Etoro account for more than 12 months (without connection), the platform takes you $ 10 per month. This only concerns the accounts with an available balance, but it can slowly erode your earnings if you forget your account or do not actively invest.
Overnight lever and fresh effect: costs to be monitored
When you use a lever effect on etoro (for example x2, x5, etc.), your positions are open in the form of CFD. This implies Overnight costs, that is to say interest taken every night to keep your position open.
These costs are common on all CFD trading platforms, but many beginners only discover them after having noticed an unexplained drop in their balance. It is therefore essential to understand the type of product you buy.
Conversion fees: a classic trap for European users
eToro operates exclusively in US dollars (USD). If you deposit euros or another currency, an automatic conversion is applied, with fees of up to 1.5% depending on the deposit method. This may come as a surprise to users who thought they were investing in their own currency without any additional costs.
The Spread on cryptocurrencies: a discreet but impactful fee
The Spread is the gap between the purchase price (ASK) and the selling price (BID) of an active. On Etoro, this fee does not clearly appear in a table or on your transaction ticket. It is included in the final price, which makes it less readable for beginners.
For example, when you buy Bitcoin for $ 1,000, you will pay 1 % of visible commission ... but you could lose more because of a high Spread.
How to avoid high spreats on cryptocurrencies?
Choose a platform that offers a fully advanced interface, like Gemini.
The platform offers:
- Top-notch security, with “cold” storage of the majority of funds
- A dual interface: a simplified application for beginners and ActiveTrader , an advanced platform offering decreasing fees according to volume and a competitive order book.
- Access to more than 60 cryptocurrencies, as well as a rare offering on the market: tokenized stocks (Nvidia, Apple, etc.). These products replicate the price of real stocks via tokens issued directly on the Gemini platform, allowing them to be purchased and traded 24/7 like cryptocurrencies, without going through a traditional stock broker.
- Strict regulatory compliance, with Gemini being one of the first platforms approved in the United States and holding the European license ( MiCA ).
- Additional services such as staking to generate returns on these cryptocurrencies.
Gemini therefore allows you to invest in both cryptocurrencies and tokenized stocks, all in a secure and regulated environment.
- Compare live the price offered on etoro with that of the market, via a data aggregator like CoinMarketCap or Coingecko, to see if the price offered is competitive.
For a complete panorama, you can consult our comparison of the costs of the main cryptocurrency platforms .
What if you prefer simplicity?
For a beginner who does not wish to handle a order book, a platform like Bitvavo can be a good compromise: simple interface, visible and very competitive fixed costs, with a clear user experience from the first deposit.
On the other hand, if you opt for Etoro for its ease of use and its all-in-one interface, keep in mind that:
- The crypto Spread is not indicated explicitly but can be important, especially in periods of high volatility.
- The visible commission of 1 % is only part of the real cost of your operation.
Hidden Fresh Etoro: Better understand the costs before investing
These are not so much hidden fees as costs that are not very visible or misunderstood. In reality, Etoro displays most of its costs in a dedicated page but their presentation is not always clear for neophytes. The Spread, in particular, is an element that often escapes vigilance.
But it is not an isolated practice: many simplified purchase platforms (Coinbase, Revolut, etc.) also apply high Spreads.
Investments in cryptocurrencies are risky. Crypternon could not be held responsible, directly or indirectly, for any damage or loss caused following the use of a property or service put forward in this article. Readers must do their own research before undertaking any action and investing only within the limits of their financial capacities. Past performance does not guarantee future results. This article does not constitute an investment advice.
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AMF recommendations. There is no guaranteed high yield, a product with high performance potential implies a high risk. This risk taking must be in line with your project, your investment horizon and your ability to lose part of this savings. Do not invest if you are not ready to lose all or part of your capital .
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Yoann
Training engineer, I quickly became interested in the field of finance. Convinced that decentralized finance has a bright future ahead of it, I participate in its democratization by developing Crypternon.
