In this step-by-step guide, we at Nugget’s News will tell you how to buy and sell stocks via so-called contracts for differences (CFDs) on eToro.
What is eToro?
It’s the world’s leading social trading and investing platform. You can think of eToro as online trading and investing meshed with social media. It launched in 2007—making it older than the Bitcoin blockchain itself!—and now boasts over 11 million registered users, each of whom can trade stocks as well as cryptocurrencies, currencies, commodities, and other assets.
Note, Australia is part of the minority in terms of countries where eToro does not offer stock trading. It has, however, told Nugget’s News it is currently working with Australian regulatory bodies to change this.
For the time being, that means stock trades are only available for Australians as CFDs. Per eToro’s website, CFD trading “is a method that enables individuals to trade and invest in an asset by engaging in a contract between themselves and a broker, instead of opening a position directly one a certain market.”
Opening an eToro Account
It’s free and easy to open an account on eToro. All you have to do is follow the five steps outlined below.
- Go to eToro’s website.
- Click ‘Join Now’ or ‘Sign Up’.
- Fill in all relevant information requested in the electronic form (see below). Alternatively, sign up via Facebook or Google.
- Familiarise yourself with, and agree to, each of the following:
- Financial Product Terms
- Product Disclosure Statement
- Financial Services Guide
- Submit your information by clicking ‘Create Account’.
The form you need to fill out to create an eToro account
Verifying Your eToro Account
Now that you’ve created your eToro account, you need to verify that you own it. You do this by completing eToro’s know-your-customer (KYC) process. As part of the KYC process, eToro will ask you for a ‘Proof of Identity’ document and ‘Proof of Address’ document.
Proof of Identity
- This document should contain your name, date of birth, a clear photograph, and issue date. If it has an expiry date, then that too should be made visible.
- A passport is the preferred proof of identity, as it’s the document that eToro is able to process the quickest.
- If you don’t have a valid passport, your Proof of Identity can be a driver’s license or some form of other government-issued ID.
- If the document is double-sided—and each side has relevant information—then remember to upload both sides.
- You can use the eToro app—available on iOS and Android—to scan your documents directly to the platform.
Proof of Address
- This document should contain your full name, address, and issue date—which shouldn’t be older than 6 months.
- The name or logo of the issuer should also be clearly visible.
- To ensure all four corners are visible, try and scan your document against a different-coloured background.
- Examples of a Proof of Address document include a bank statement, phone bill, credit card statement, and electricity bill.
The verification process can take a few days. You’re able to monitor the status of your verification on the eToro platform. Once your account is verified, eToro will notify you and a green tick will start appearing next to your username on your profile.
Depositing Into Your eToro Account
eToro offers a variety of deposit methods. You can deposit money into your eToro trading account with any of the following: debit card, credit card, wire transfer, PayPal, MoneyGram, Neteller, Western Union, Skrill, and WebMoney.
To deposit funds into your eToro account, all you have to do is:
- Log in to your account.
- Click ‘Deposit Funds’.
- Enter the amount and select the currency.
- Select your preferred deposit method.
For deposits made via wire transfer, eToro requires you to deposit at least US$500. For all other deposit methods, the minimum deposit is US$50. All eToro trading accounts are denominated in U.S. dollars (USD). Therefore, when depositing with a different currency, the deposited amount will be converted at the current market rate, which is subject to a small conversion fee.
Log in, enter an amount and currency, select a payment method—simple!
Buying Stocks on eToro
Click the ‘Trade Markets’ link on the left of the screen and select ‘Stocks’, before clicking ‘Buy’ on your desired stock CFD and entering the quantity you want. Once bought, your eToro trading account’s balance will be credited accordingly.
Selling Stocks on eToro
Click ‘Trade Markets’ on the left of the screen and select ‘Stocks’. Then, click ‘Sell’ on your desired stock CFD and enter the quantity you want. Once bought, your eToro trading account’s balance will be debited accordingly.
eToro & Nugget’s News
In this guide, we linked to the homepage of the eToro website. The link used was an affiliate link that eToro set up in collaboration with Nugget’s News. (More on the affiliation between eToro and Nugget’s News.)
Below is a video tutorial on how to trade stocks, commodities, ETFs, and currencies on eToro. The 12-minute tutorial was recorded in January 2020 and is delivered by Nugget’s News founder Alex Saunders. Discover similar tutorials on the Nugget’s News YouTube channel.
Nugget’s News has prepared this how-to guide to walk you through the process of signing up to, and buying and selling stock CFDs on, eToro. Please be aware that 75 per cent of retail investor accounts lose money when trading CFDs with eToro. Only risk capital that you’re prepared to lose.