eToro is a social trading platform and brokerage with offices in the UK, US, Cyprus, Israel and Australia. The broker enables people to invest in a wide range of assets such as penny stocks, forex, crypto and CFDs. Their customers are mainly beginner traders with limited knowledge of the markets. Despite having 13 million customers it’s almost impossible to find an honest opinion.
So far I’ve only read fake reviews from websites looking to earn hefty affiliate commissions. The reviews are overly positive and fail to mention the downsides of using the broker. To be honest, I don’t blame them, but I don’t think it’s right to recommend a service without having used it before.
Day trading penny stocks is a tough industry. Roughly 90% of traders lose money and not having the right broker means you’re at a disadvantage. Movies like the Wolf of Wall Street glamorize trading, everyone wants to live the trader lifestyle. Thousands of people join hoping to make easy money without making the effort. Later they get angry when they find out the cold hard truth.
Is eToro a suitable broker for penny stocks?
The answer to this question depends on where you live. In the US there are dozens of brokers for penny stocks with cheap commissions and quick trade executions. In the UK, the options are far fewer.
While eToro does have some penny stocks on the platform, the selection is limited. The best option is to contact their customer service team to get the full list of eToro penny stocks, they don’t share this information publicly.
Is eToro a scam?
Despite the company’s negative reputation online, they are regulated within the markets they operate. eToro is regulated by the CySEC in the EU, FCA in the UK, FinCEN in the US and by the ASIC in Australia.
To get some honest insights on eToro, it’s worth checking out their latest reviews on Trustpilot. The reviews will provide a good overview of the main complaints clients are experiencing as well as the positives.
- The minimum deposit is just $200 to get started.
- Beginner friendly, the whole process of placing trades is very simple. Other brokers platforms cater to more advanced traders.
- Offer some access to penny stocks but the selection is limited.
- The main downside is slow customer service. Expect long delays trying to receive answers as live chat is nearly always full. This is what happens when your customers don’t understand the basics of stock trading.
- Trade executions can be slow which might impact your profits if you’re an active trader. If you’re a buy and hold type investor this isn’t a major concern.
- They charge a $5 withdrawal fee to persuade people from withdrawing money, previously it was $25 which is insane!
eToro Alternatives for Trading Penny Stocks
- Interactive Brokers
- Trading 212
Overall eToro wouldn’t be classified as an ideal broker for penny stocks. Despite this there are some low-priced shares on eToro you can trade but it will be limited. eToro is mainly popular because it’s built for beginners and professional traders will favour brokers with advanced trading platforms. Please leave a comment below about your experience using eToro!