Before you trade and invest in any exchange, you must first know the different types of accounts. And choose the most suitable account type yourself.
With the eToro trading platform, account types are ranked according to several criteria. These criteria are ESMA’s regulations, the amount of investment capital and the country and territory. The article describes these types of accounts in detail.
Demo Account and Real Account
Demo Account
Before you get into the classification of account types on eToro, you need to know about Demo accounts.
When you open an eToro account and the real account, there is always a conversion to a Demo account integrated into the account.
eToro offers you 100,000 virtual usd in a Demo account.
The demo account is where you get acquainted and trade on eToro. You can practice opening real-time buy/sell orders of the market. The chart in the demo account is the same as in the real account. Then you can learn to observe the market and put into practice the theory you have learned until you are confident and ready to trade without worrying about losing real money.
The only difference is that you can’t withdraw profits/amounts to your bank account because this is only virtual currency.
Real Account
It’s your real trading account. And it is classified according to several criteria detailed below.
ESMA eToro Account Types
ESMA is the European Securities and Markets Authority. It is an independent EU body that contributes to the stability of the European Union’s financial system as a regulator. In doing so, ESMA strengthens investor protection and promotes stable and orderly financial markets.
According to ESMA regulations, eToro is divided into two different account types:
- Retail Account
- Professional Account
Retail Account
When you sign up for an eToro account, your account is a retail account. For your retail account:
- Protection: The type of account that receives the highest level of protection from eToro (such as Investor Compensation Fund, etc.)
In addition, retail customers also benefit from negative balance protection* and limited margin payments.
- Investment Activity: With this account, investors can access all kinds of assets on eToro. You can choose to trade on your own or copy trades from professional investors and investment funds (Copy Trading).
- Leverage: However, for this account, leverage is limited. The maximum leverage for each asset class is: x30 for major currency pairs (such as EUR/USD); x20 for other currency pairs (such as EUR/NZD), gold and major indices; x10 for commodities (except gold) and other indices; x5 for CFDs on shares (shares) and ETFs; x2 for cryptocurrency CFDs (due to the high volatility of the cryptocurrency market and the risk that for investors, eToro is currently disabling leverage on crypto positions)
- In general, limits on the leverage ratio are one of eToro’s policies to protect clients – inexperienced and inexperienced investors from the possibility of losing their capital.
- Minimum deposit required: $200 for amateur accounts and $50 for later.
* Negative Balance Protection – In cases where your account becomes negative, eToro will cover that loss and set your capital to zero.
Professional Account
This type of account is intended for professional traders and investors, on primary advantages such as amateur accounts. But there are the following differences.
- Protection: You have the same negative balance protection as a Retail account. However, one limitation for professional clients is that they are not protected by the Investor Compensation Fund (such as amateur accounts) and the Financial Ombudsman Service.
- Leverage: The main advantage of a pro account is high leverage (1:400). In addition, it has transaction fees and lower spreads.
To upgrade an account from a retail account to a pro account, you must meet the following criteria:
- Minimum wallet of $500,000 and excluding cash.
- Make at least ten trades with a total value of at least $500,000 in recent times.
- At least one year of work experience in the financial sector.
Types of accounts by amount of invested capital
Retail accounts continue to be classified according to the amount of capital invested. It’s called eToro Club.
eToro Club membership is determined based on the user’s actual net worth at midnight GMT each day. If you meet the property value requirement, the account is automatically accepted and the club class changes the following day:
- Silver: $5,000
- Gold: $10,000
- Platinum: $25,000
- Platinum+: $50,000
- Diamond: $250,000
Benefits of each account level
With each member level, you will have several benefits: having your own account manager, receiving exclusive analysis news for members, free withdrawals from the Platinum level and more benefits from the eToro Money program (currently available to UK customers), benefits from crypto staking…
See details of the benefits of the investment capital account type here.
Account types by country and region
Finally, the account type is divided by country and territory. This is a special case.
eToro is a global investment platform. However, in some countries and territories, there are separate financial regulations for that country or region. So the accounts of the citizens of that country are different. Here are those exceptional cases.
Islamic eToro Account
Islamic accounts are opened exclusively for Muslim investors. According to Sharia law, these accounts receive unique benefits such as:
- Do not pay any transaction fees, such as fees or swaps.
- Use interest-free leverage.
- The only expense to be paid is the spread (the difference between the buy and sell prices).
To open an Islamic account, you are in a regular eToro account. Next, you need to deposit a minimum of $1,000. Finally, open a ticket to contact support, requesting to switch to an Islamic account.
eToro USA Account
In 2018, eToro was launched in the US market, allowing investors to open trading accounts on the platform. Each state has its own laws, so some states may not be available. Update the list of states directly here
Initially, eToro only offered crypto products for eToro USA accounts. Currently, the eToro USA account can trade certain types of stocks.
Conclusion
Above is an article about the accounts available on the eToro trading platform. If you are going to invest in eToro, choose the appropriate account type yourself. If you have traded on eToro, determine the type of account you are using to ensure the benefits.
In the future, eToro may update multiple account types (if any).