This Forex broker comparison will take a deeper look at eToro, a social trading platform operational since 2007 and home to over 3,000,000 traders, and Trading 212, a mostly-mobile trading platform which is highly popular in the UK and Germany. It introduced zero-commission trading, and the application has been downloaded over 14 million times in a statement to its popularity. The former compensates for its services with excessive fees, while the latter offers traders tight spreads in a competitive trading environment. eToro markets itself as a FinTech company, but Trading 212 displays its strength as one, evident by the products provided.

This comparison will focus on the following four aspects plus an ultimate verdict:

Headquarters
IsraelCyprus
Regulators
ASIC, CySEC, FCA, FSAFCA, FSC Mauritius
Tier 1 Regulator(s)?
Owned by Public Company?
Year Established
20072006
Execution Type(s)
Market MakerMarket Maker
Minimum Deposit
$50 - $10,000$1
Negative Balance Protection
N/A
Trading Platform(s)
Proprietary platformMetaTrader 4, Proprietary platform
Average Trading Cost EUR/USD
N/A1.9 pips ($19.00)
Average Trading Cost GBP/USD
2.2 pips2.9 pips ($29.00)
Average Trading Cost WTI Crude Oil
$0.05 $0.04
Average Trading Cost Gold
$0.45 $0.68
Retail Loss Rate
74%N/A
Minimum Raw Spreads
0.8 pipsN/A
Minimum Standard Spreads
1.3 pipsN/A
Minimum Commission for Forex
$0.00N/A
Islamic Account
Signals
US Persons Accepted?
Managed Accounts
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Features and Platforms

MT4
MT5
MT4/MT5 Add-Ons
N/A
cTrader
Proprietary Platform
Automated Trading
Social/Copy Trading
N/A
DOM?
Guaranteed Stop Loss
Scalping
Hedging
One-Click Trading
OCO Orders
Interest on Margin
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eToro

Social trading has retreated from its peak, but eToro attempts to present a suitable option to those interested in following other traders. This broker continues to push forward with success, as evidenced by millions of active traders using the in-house developed CopyTrader. The addition of CopyPortfolios was an attempt to decrease risk and add more diversification to investment opportunities. The trading platform is available as a webtrader and mobile version. In the course of this comparison, we discovered that that TipRanks, a third-party provider where traders may access market coverage provided by over 15,000 analysts is perhaps the best feature offered by eToro.

The ProCharts charting package enhances manual trading. eToro also buys and holds select physical assets for clients, and the Popular Investor Program offers qualified signal providers an annualized compensation of 1.5% of allocated assets. With social trading at the core of operations, the in-house research and education remains secondary and of lesser quality.

The 66.0% loss rate of traders ranks eToro ahead of many competitors, essential to the success of its business model.

eToro advances social trading successfully, but its fees are higher than most brokers.

Trading 212

Commission-free trading is gaining popularity, disrupting traditional brokerage models, and Trading 212 remains one of the pioneers of this trend.This FinTech company operates out of the UK and Bulgaria, offering two distinct account types. The CFD account is for leveraged trading, and the Invest account offers traditional equity trading. Adding to the innovative services is fractional share trading, allowing traders with less substantial capital to manage a well-diversified portfolio.

Another great feature is ProQuant. It allows the creation of automated trading robots without the need to code. Daily analytics are provided, but the quality is sub-standard, with the risk warning more detailed than the analysis. Education is offered through well-presented video content, granting an excellent introduction for new traders with a modern approach. The overall trading conditions are outstanding, but 76% of retail traders operate their portfolios at a loss when trading with Trading 212, a full 10 percent more than eToro’s losses.

Available Markets

eToro features more than 2,000 assets across six categories. With forty-seven currency pairs and seventeen cryptocurrency pairs, Forex traders can easily diversify their core portfolios. Through thirteen commodities, an additional diversification opportunity is presented. Another thirteen index CFDs and 145 ETFs offer trading opportunities with the remainder of assets spread across global equities. Trading 212 offers a superior asset selection with over 3,000 across the same six categories.

Pure Forex traders have access to over 185 currency and cryptocurrency pairs, with an additional 23 commodities. The outstanding equity selection is complemented by 44 index and ETF CFDs. Both brokers offer an asset selection suitable for the majority of traders.

Currency Pairs
Cryptocurrencies
N/A
Commodities
Crude Oil
Gold
Metals
Equity Indices
Stocks (non-CFDs)
Bonds
ETFs
Options
N/A
Futures
Synthetics
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Typical Spreads and Fees

The pricing environment at eToro remains unacceptably elevated, with the lowest spread listed as 3.0 pips for the EUR/USD. While zero commission equity trades are marketed, they solely apply to buy orders in non-leveraged portfolios. Leveraged portfolios and short-sellers are levied with a 0.09% fee. In comparison, Trading 212 offers the EUR/USD as low a 0.8 pips without additional costs together with free equity trades, generating a superior pricing environment. The former attempts to cover expenses for its social trading service with tremendous mark-ups, while the latter achieves a trader-friendly composition for manual and automated traders. On the other hand, eToro’s traders may be willing to pay the higher fees for the opportunity to copy experienced traders and hopefully to enjoy fewer losses than are seen with Trading 212.

Swap rates on leveraged overnight positions are equally applied. Since eToro and Trading 212 feature a sound equity selection, corporate actions like dividends and mergers are passed onto traders. eToro charges a $5 flat-fee on all withdrawals, where Trading 212 remains free of charges. Third-party costs may apply, depending on the payment processor utilized. The broad pricing environment remains significantly more geared towards trader profitability at Trading 212, and towards broker profitability at eToro.

Average Trading Cost EUR/USD
N/A1.9 pips ($19.00)
Average Trading Cost GBP/USD
2.2 pips2.9 pips ($29.00)
Average Trading Cost WTI Crude Oil
$0.05 $0.04
Average Trading Cost Gold
$0.45 $0.68
Average Trading Cost Bitcoin
$574 $46.59
Minimum Raw Spreads
0.8 pipsN/A
Minimum Standard Spreads
1.3 pipsN/A
Minimum Commission for Forex
$0.00N/A
Deposit Fee
N/A
Withdrawal Fee
N/A
Inactivity Fee
$10 monthly after 12 monthd N/A
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Security and Trust

The Cyprus Securities and Exchange Commission (CySEC) provides a regulatory framework for eToro under MiFID II and the EU’s 5th Anti-Money Laundering Directive. The UK Financial Conduct Authority (FCA) and the Australian Securities and Investments Commission (ASIC) provide additional regulation. Client funds are protected by the Investor Compensation Fund (CIF) in Cyprus up to a maximum of €20,000, applicable to eToro Europe traders, and the Financial Services Compensation Scheme (FSCS) up to £85,000 for clients of eToro UK. eToro USA LLC, registered with FinCEN as a Money Services Business, is where US-based traders have access to this broker.

Trading 212 also holds regulation in several jurisdictions, where traders can manage portfolios in a secure trading environment. Trading 212 UK LTD operates under the UK Financial Conduct Authority (FCA) framework, and Trading 212 LTD is authorized by the Bulgarian Financial Supervision Commission. The Financial Services Compensation Scheme (FSCS) protects client deposits from the former. The Bulgarian Investors Compensation Fund those of the latter up to 90% of deposits, with a maximum of €20,000. Client funds at both brokers remain fully segregated, and traders are provided with a trustworthy trading environment by eToro and Trading 212 alike.

Country of the Regulator
Australia, Cyprus, Seychelles, United KingdomBulgaria, Cyprus, United Kingdom
Name of the Regulator
ASIC, CySEC, FCA, FSAFCA, FSC Mauritius
Regulatory License Number
491139, 109/10, 583263, SD076609146, 398/21, RG-03-0237
Regulatory Tier
N/A1, 1, 1
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eToro vs Trading 212 - Verdict

eToro presents itself as an exceptional brokerage with operational statistics supporting claims of a market-leader position in social trading. It claims that as of June 2018, 73% of 124 million copied trades have been profitable. While social trading opportunities remain outstanding based on choice, the fees levied by give Trading 212 a significant advantage in this area. Trading 212 is a broker operated by a fintech company, disrupting the brokerage industry with commission-free trading, targeting millennial traders on the move. The low-cost trading environment is visible in the absence of proper research capabilities.

It is partially offset by ProQuant, allowing traders to develop automated solutions without the need to code. Social trading remains the core business of eToro. Through ProQuant, a more profitable and automated trading strategy can be deployed, at Trading 212. Inexperienced traders will likely find more success by following eToro’s pro traders, but their gains will be offset with higher fees. Experienced traders will appreciate Trading 212’s commission-free fee structure more than the benefits offered by eToro. Likewise, it is important to note that only eToro offers trading to U.S. traders, which makes them the obvious choice for U.S. residents.

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FAQs

Are Trading212 and eToro regulated in the UK?

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Trading212 is a UK-headquartered and regulated broker, while eToro maintains an operating subsidiary regulated in the UK.

Can I buy Bitcoin on Trading212 or eToro?

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Yes, both brokers allow traders to purchase Bitcoin as a derivative contract, while some clients of eToro can also buy and own unleveraged Bitcoin in segregated accounts.

Do eToro and Trading212 have fees?

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eToro and Trading212 both levy commissions on select trading instruments and offer others commission-free with internal mark-ups on spreads.

How long does it take to withdraw from eToro and Trading212?

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eToro notes it will send a confirmation e-mail within two business days after a trader makes a withdrawal request. Trading212 states it will take up to three business days to process a withdrawal request, dependent on the payment processor and geographic location of traders, so eToro is likely to be faster for most. Most online payment processors have instant withdrawal features once eToro and Trading212 execute the withdrawal request, except for credit/debit cards.

Do I own the crypto on eToro and Trading212?

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Some traders at eToro may buy physical cryptocurrencies and hold them in their crypto wallets, which eToro buys and holds in segregated accounts on behalf of clients. eToro and Trading212 primarily offer crypto as CFD contracts to most traders, which are derivatives, meaning they do not own the underlying asset.