eToro vs Trading 212 – Which is the best alternative for you?

With the increasing popularity of online trading, numerous trading platforms have emerged in recent years. eToro and Trading 212 are two of the best-known. Both allow traders to invest in various financial instruments including stocks, cryptocurrencies, and commodities.

Choosing the right trading platform is crucial for any trader, as it can impact the overall trading experience and the success of their investments. In this article, we will explore the similarities and differences between eToro and Trading 212, highlighting the pros and cons of each platform to help readers make an informed decision.

In short, both are good options, but we lean towards eToro as our favorite: 

• Regulated in most countries
• Better offer of markets
• Superior trade copying
• Easier to use

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eToro overview

eToro is a multi-asset brokerage and social trading platform founded in Tel Aviv in 2007 as RetailFX by brothers Yoni Assia, Ronen Assia, and David Ring. The company released its OpenBook social investment platform in 2010, which included a CopyTrader feature that allows investors to copy the network’s top traders automatically.

eToro has since expanded its offerings to include stocks, commodities, currencies, and cryptocurrencies. In addition to its social trading features, eToro has launched a cryptocurrency wallet.

In March 2021, eToro announced plans to become a publicly traded company through a reverse subsidiary merger with FinTech Acquisition Corp V, a SPAC backed by former Bancorp CEO Betsy Z. Cohen. The company reported operating in 140 countries and having 20 million users in 2021.

In December 2021, eToro launched the eToro Money debit card for U.K. residents and amended its agreement with FinTech Acquisition Corp. V to extend the merger agreement’s termination date to June 30, 2022. The company’s SPAC valuation was reduced from $10.4 billion to $8.8 billion due to market shifts and SPAC issues.

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Is eToro licensed?

To operate in different countries, eToro has established four entities licensed and regulated by local regulatory bodies. These entities are in Cyprus, the UK, Australia, and the Seychelles. Each entity complies with the local regulatory framework, meaning they offer different services, protections, and limitations to investors depending on the country in which they are based.

For example, eToro (Europe) Ltd is regulated by the Cyprus Securities and Exchange Commission (CySEC) and is authorized to offer its services in all EU countries. This entity is also a member of the Investor Compensation Fund (ICF), which protects its clients’ funds in case of insolvency. Similarly, eToro (UK) Ltd is licensed and regulated by the Financial Conduct Authority (FCA) and is permitted to operate in the United Kingdom and other European countries. This entity is also a member of the Financial Services Compensation Scheme (FSCS), which protects eligible investors in the event that the company goes bankrupt.

In addition to these, eToro is regulated by the Australian Securities and Investments Commission (ASIC) and the Financial Services Authority of Seychelles (FSAS). These entities provide regulatory oversight in their respective countries, ensuring that eToro complies with local laws and regulations.

eToro services

• eToro is a multi-asset trading company that offers various services to its users, making it a one-stop shop for investors. The platform is designed to cater to the needs of both novice and experienced traders by providing them with a range of investment opportunities, trading tools, and educational resources.

• Trading is one of the core services offered by eToro. It provides users access to various assets, including stocks, indices, currencies, commodities, and cryptocurrencies. The platform’s user-friendly interface and advanced trading tools have made it popular among traders looking to diversify their portfolios and explore new investment opportunities. eToro offers educational materials and resources to help traders stay informed about the latest market trends and make informed investment decisions.

• Copytrading is another unique service offered by eToro. The platform’s CopyTrader feature allows users to replicate the trading strategies of successful traders on the platform. This feature is an excellent tool for new traders looking to learn from the best in the business. By copying successful traders’ trades, users can earn significant profits without having extensive trading knowledge or experience.

• The eToro Wallet is a cutting-edge service allowing users to store and manage their cryptocurrency assets securely. This feature is essential for those who want to invest in cryptocurrencies, as it provides a secure and convenient way to store and manage their digital assets. The wallet employs multi-signature technology to ensure all transactions are verified and approved by the user.

• CopyPortfolios is another innovative investment solution offered by eToro. It allows investors the opportunity to diversify their portfolios and achieve their financial goals by investing in a collection of assets bundled together based on a specific theme or strategy. The portfolios are managed by eToro’s expert investment committee, ensuring they are constructed with sound investment principles and best practices.

eToro pros

• Safety and regulation: eToro is a regulated broker in two tier-1 jurisdictions and one tier-2 jurisdiction. The broker is held to high security and transparency standards, providing traders with a safe and reliable environment to trade forex and CFDs.
• Social copy trading: eToro’s social copy trading feature allows traders to follow and copy the trades of successful investors and traders. This feature provides an excellent opportunity for novice traders to learn from experienced traders and profit from their expertise.
• Cryptocurrency trading: eToro is a top pick for cryptocurrency trading, offering a user-friendly platform and a range of cryptocurrencies. This feature is ideal for investors seeking exposure to the emerging asset class, providing a convenient and accessible way to invest in this exciting market.
• Range of markets: eToro is a multi-asset broker with over 3,000 symbols available, including stocks, commodities, and forex. The platform continuously expands its range of markets, providing traders with a diverse and comprehensive selection of assets to invest in.

eToro cons

• Higher trading fees: eToro charges slightly higher fees than many of its competitors, which can put some traders off. However, many others consider paying slightly higher rates to be worth doing for access to eToro’s excellent service package.
• No support for automated trading strategies: eToro does not support automated trading strategies, such as algorithmic trading. It can disadvantage traders relying on these strategies, as they can only partially automate their trading process on the platform. However, this won’t affect most traders.

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Trading 212

Trading 212 Ltd. is a financial trading company based in Sofia, Bulgaria, that provides an online platform for investing in various financial instruments such as stocks, ETFs, and CFDs. The company offers services through a mobile app for iOS and Android devices and a website.

Trading 212 is regulated by the Financial Supervision Commission under Register number RG-03-0237. Additionally, its UK branch, Trading212 UK Ltd, is regulated by the Financial Conduct Authority (FCA) under Reference number 609146.

Apart from its operations in Bulgaria and the UK, Trading 212 has a global presence, operating in countries such as Australia, Thailand, South Africa, Singapore, Hong Kong, India, France, Germany, Norway, Sweden, Italy, Denmark, United Arab Emirates, Saudi Arabia, Kuwait, Luxembourg, Qatar, and Spain. However, Trading 212 does not offer its services in the United States or Canada.

Trading 212’s mobile app and website provide users with real-time market data, advanced charting, and analytical tools to support their investment decisions. Trading 212’s services are available to new and experienced traders, and the platform aims to provide an intuitive and user-friendly experience for its clients.

Is Trading 212 Licensed?

Trading 212 is licensed and regulated by financial regulatory authorities in its operating countries. Trading 212 UK Ltd. is authorized and regulated by the Financial Conduct Authority (FCA) with Firm reference number 609146. Trading 212 Markets Ltd. is authorized and regulated by the Cyprus Securities and Exchange Commission (CySEC) with License number 398/21. Trading 212 Ltd. is authorized and regulated by the Financial Supervision Commission with License number RG-03-0237.

Trading 212 ensures the safety of its clients’ funds by keeping them separately in segregated bank accounts. Trading 212 UK Ltd. is covered by the Financial Services Compensation Scheme (FSCS), while Trading 212 Markets Ltd. is covered by the Investors Compensation Fund (ICF) and the Investors Compensation Fund (ICF) Bulgaria. 

Trading 212 services

• CFD trading: Trading 212 allows users to trade CFDs (contracts for difference) on various assets, including 29 commodities, 36 indices, 1536 shares, and 184 forex pairs. CFDs permit traders to speculate on the price movements of these assets without actually owning them, making it possible to profit from both rising and falling prices.
• Forex trading: offers spot and CFD trading on 184 forex pairs.
• Stock trading: allows users to trade stocks worldwide, including U.S. and international stocks. Users can trade via CFDs or by purchasing fractional shares of the underlying stock.
• Investment accounts: Trading 212 offers two types of investment accounts, Invest and CFD. The Invest account is designed for buying and holding stocks, while the CFD account is geared toward active traders who want to take advantage of shorter-term price movements.
• Mobile and web trading platforms: includes a user-friendly mobile app for Android and iOS devices and a web-based platform.

Trading 212 pros

• Intuitive and easy-to-use platform: an intuitively designed and easy-to-use web trading platform and mobile app.
• Diverse range of trading options: a wide range of 1,785 symbols for CFD and forex trading. This variety allows traders to diversify their portfolios and make informed decisions based on market conditions.
• Exotic F.X. Pairs: Trading 212 supports several exotic F.X. pairs, including 16 against the Bulgarian lev. This unique offering allows traders to exploit market opportunities not commonly available on other trading platforms.

Trading 212 cons

• Limited research in the web platform
• No MetaTrader available
• Not available in the US

In short, our favorite still remains eToro. 

Similarities between eToro and Trading 212

• Both eToro and Trading 212 are online platforms allowing traders to invest in various financial instruments, including stocks, cryptocurrencies, and commodities.
• They both offer a range of investment opportunities, trading tools, and educational resources to cater to the needs of both novice and experienced traders.
• Both platforms provide users with innovative investment solutions to diversify their portfolios and achieve their financial goals.
• Safety and regulation are essential components of both platforms. They are licensed and regulated in multiple jurisdictions, providing traders with a secure and reliable trading environment.
• Both eToro and Trading 212 offer social trading features that allow users to replicate the trading strategies of successful traders on the platform. This is an excellent tool for new traders looking to learn from the best in the business.

Differences between eToro And Trading 212

• eToro offers CopyTrader, CopyPortfolios, and the eToro Wallet, which Trading 212 does not provide.
• Trading 212 has more advanced charting capabilities, while eToro focuses more on social trading features.
• eToro has a more extensive range of cryptocurrency offerings.
• eToro is available in more countries than Trading 212, notably including the US.

Conclusion

In conclusion, eToro and Trading 212 are popular online trading platforms offering unique features and benefits. Both platforms allow traders to invest in various financial instruments, including stocks, cryptocurrencies, and commodities. 

eToro is a multi-asset platform with a social trading feature, educational resources, a cryptocurrency wallet, and a copy portfolio. On the other hand, Trading 212 is a commission-free trading platform that offers a mobile app, and a demo account. 

Every investor will have their own preference. Nevertheless, if you’re in the US, you’ll definitely want to check whether eToro is available in your state, as Trading 212 won’t be an option.

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