Social trading is one of the fastest-growing sectors of the global financial market, competing with automated trading solutions as a great option for traders that don’t have the time or knowledge to trade completely independently. eToro and ZuluTrade are both technological leaders of this trend. Both companies were founded in 2007, but charted their course with a different strategy. eToro is a broker focused on social trading while ZuluTrade has partnered with over 64 global brokerages to provide social trading to their clients. ZuluTrade also manages a brokerage called AAAFX.
This comparison will focus on the following four aspects plus an ultimate verdict:
- Features and Platforms
- Available Markets
- Typical Spreads and Fees
- Security and Trust
- eToro vs ZuluTrade Verdict
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Headquarters | Israel | Greece |
Regulators | ASIC, CySEC, FCA, FSA | N/A |
Tier 1 Regulator(s)? | N/A | |
Owned by Public Company? | N/A | |
Year Established | 2007 | 2007 |
Execution Type(s) | Market Maker | Market Maker, Binary Options, No Dealing Desk |
Minimum Deposit | $50 - $10,000 | Broker Dependent |
Negative Balance Protection | N/A | |
Trading Platform(s) | Proprietary platform | MetaTrader 4, Web-based |
Average Trading Cost GBP/USD | 2.2 pips | N/A |
Average Trading Cost WTI Crude Oil | $0.05 | N/A |
Average Trading Cost Gold | $0.45 | N/A |
Retail Loss Rate | 74% | N/A |
Minimum Raw Spreads | 0.8 pips | N/A |
Minimum Standard Spreads | 1.3 pips | N/A |
Minimum Commission for Forex | $0.00 | N/A |
Islamic Account | ||
Signals | ||
US Persons Accepted? | ||
Managed Accounts | ||
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Features and Platforms
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MT4 | ||
MT5 | ||
MT4/MT5 Add-Ons | N/A | |
cTrader | ||
Proprietary Platform | ||
Automated Trading | ||
Social/Copy Trading | N/A | |
DOM? | N/A | |
Guaranteed Stop Loss | ||
Scalping | ||
Hedging | ||
One-Click Trading | N/A | |
OCO Orders | ||
Interest on Margin | ||
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eToro
eToro offers traders its proprietary trading platform, available as a webtrader or mobile platform. This multi-asset platform provides the majority of assets as CFDs, but this broker also buys and holds certain physical assets on behalf of clients. The trading platform features ProCharts, eToro’s simplified version of professional charts, and market research through TipRanks, a research tool where over 15,000 analysts provide market insights.
Social trading remains at the core of eToro’s business model, and its CopyTrader has over 3,000,000 participating traders. Traders may select peers to follow, and with the click of a button, trades are copied. eToro has also pioneered a feature labeled CopyPortfolios, designed to further diversify investments while minimizing risk. eToro also offers the Popular Investor Program, where popular Investors can receive up to 1.5% payment based on average AUC. Research and education are found in the company’s blog and in the form of a daily market review. Unfortunately, eToro supports only its own trading platform and does not offer any out-of-the-box solutions that trader may be familiar with if they are coming from another brokerage. Specifically, this makes eToro a less-than-ideal choice for tens of millions of retail traders dependent on the MT4 infrastructure.
ZuluTrade
ZuluTrade is not a broker but it owns AAAFX, a brokerage operating out of Greece. This company focused on developing a platform that supports social trading and offers this to brokers around the globe. With over 64 partnerships, the company’s reach is massive. Trading conditions are dependent on which broker is chosen by traders, but full support for the MT4 trading platform is granted. Clients may join ZuluTrade as an investor or trader. The broad reach of services and sheer number of broker partnerships ZuluTrade has developed offered allows traders to access countless ideas and strategies in an unmatched capacity.
The introduction of ZuluTrade’s Combos has taken social trading to the next level as it allows traders to quickly create a portfolio consisting of the most profitable providers. It is an asset-management tool for retail traders to achieve cross-asset diversification and minimize risk. Profit-sharing accounts further align the interest of signal providers with traders. ZuluTrade monitors performances and provides rankings, which allows traders to make a more informed decision. Social charts are another popular service where traders can communicate via charts and exchange ideas. ZuluGuard offers risk management tools, and Automator allows traders to create their automated trading solutions.
Available Markets
eToro offers over 2,000 assets across six categories consisting of Forex, commodities, cryptocurrency pairs, equity markets, indices, and ETFs. It permits traders to fully diversify their portfolios and especially enhances the CopyPortfolios offer. Pure Forex traders have forty-seven currency pairs available, with an additional seventeen cryptocurrency pairs, and thirteen commodity CFDs. ZuluTrade doesn’t provide access to assets directly, and the asset selection is entirely dependent on the preferred broker.
| | |
Currency Pairs | N/A | |
Cryptocurrencies | N/A | |
Commodities | ||
Crude Oil | ||
Gold | ||
Metals | ||
Equity Indices | ||
Stocks (non-CFDs) | N/A | |
Bonds | N/A | |
ETFs | ||
Options | N/A | |
Futures | N/A | |
Synthetics | N/A | |
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Typical Spreads and Fees
| | |
Average Trading Cost GBP/USD | 2.2 pips | N/A |
Average Trading Cost WTI Crude Oil | $0.05 | N/A |
Average Trading Cost Gold | $0.45 | N/A |
Average Trading Cost Bitcoin | $574 | N/A |
Minimum Raw Spreads | 0.8 pips | N/A |
Minimum Standard Spreads | 1.3 pips | N/A |
Minimum Commission for Forex | $0.00 | N/A |
Deposit Fee | N/A | |
Withdrawal Fee | N/A | |
Inactivity Fee | $10 monthly after 12 monthd | N/A |
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eToro
eToro imposes fairly high spreads, which creates an uncompetitive trading environment typical for a market maker. The EUR/USD is listed with a spread of 3.0 pips, a very high spread for the most liquid currency pair. Zero-commission equity trades are offered for non-leveraged positions, otherwise, a 0.09% fee is charged. A $5 withdrawal fee is additionally levied, acting as a deterrent for traders to request withdrawals. Trading costs at ZuluTrade depend on the chosen broker. ZuluTrade is compensated by the spread, and traders need to account for the mark-up.
The Profit-Sharing account is subject to a 20% performance fee, but only if certain conditions are fulfilled, and if the portfolio is profitable. Swap rates on overnight positions apply, the exact fees can be obtained from inside the trading platforms. Corporate actions like dividends and takeovers apply to equity, index, and ETF CFDs. Simply put, both of these social trading platforms have fees spreads than standard Forex brokers, but they both offer an ease of use that standard brokers do not or cannot usually provide.
Security and Trust
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Country of the Regulator | Australia, Cyprus, Seychelles, United Kingdom | N/A |
Name of the Regulator | ASIC, CySEC, FCA, FSA | N/A |
Regulatory License Number | 491139, 109/10, 583263, SD076 | N/A |
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eToro Europe is regulated in Cyprus by the Cyprus Securities and Exchange Commission (CySEC). As an EU member, cross-border jurisdiction across the European Economic Area (EEA) applies. eToro UK operates under the Financial Conduct Authority (FCA), while eToro Australia is authorized by the Australian Securities and Investments Commission (ASIC). eToro expanded into the US market and is registered with FinCEN as a Money Services Business. Different jurisdictions come with their set of regulatory requirements and benefits. Services and protection of traders will differ, but eToro remains transparent, and traders may trust this firm with their information as well as capital.
ZuluTrade is regulated in Greece by the Hellenic Capital Market Commission (HCMC), and as an EU member under the same regulatory requirements as all member countries. In 2015 it was granted the EU Portfolio Management License, which made ZuluTrade a licensed portfolio management company in the EU. The acquisition of Market Crew Investment Advisor, a regulated entity, resulted in ZuluTrade being licensed in Japan and served as the cornerstone for its Asian expansion. It is additionally licensed to operate in the US, though most of its partner brokers do not operate there. In 2017, Chinese firm Formax Group acquired ZuluTrade together with Dayo Innovative Trading which owns AAAFX.
In the area of regulation, there is no question that both of these social trading offerings has solid, reliable regulation.
eToro vs ZuluTrade Verdict
eToro, as well as ZuluTrade, operate in the social trading sector, different but equally interesting ways for traders to trade without stress. Social trading remains popular but has retreated from the popularity it hit 10 years ago. eToro is attempting to make changes to remain relevant, but the pricing environment remains uncompetitive. ZuluTrade’s acquisition by the Formax Group may point it in a different direction. The Chinese firm was most likely after technology and will make changes to the platform. The ultimate verdict on those potential changes is unclear but expected to contribute positively. For new traders, one advantage is the ease of use of the eToro platform, but established traders may yearn for more familiar options. One significant advantage of ZuluTrade is the company’s partnership with over 60 brokers. The downside of this, however, is that traders will have to take time to research which broker is the best for them, a time-consuming and often confusing process. While we’d grant ZuluTrade a slight competitive over eToro, thanks to lower fees and more diverse offerings, eToro is still a solid option for traders looking to trade in an easy-stress free environment.
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