Like with other trading platforms, eToro's spreads are the difference in price between a financial instrument's BUY and SELL prices. The spread is where eToro earns their compensation for every trading transactions made. eToro’s spreads takes effect the moment a user opens a trade. It will open with a BUY value. However, the current price to be displayed on the user's portfolio will reflect the SELL price — thus the difference in value between the two processes is computed as the spread. This section will explain everything you need to know about eToro spreads.
To compute a sample spread, take note of this example:
If you BUY a Bitcoin at $75.00 and the real-time SELL price is at $74.25, the spread would be the difference between the two which is $0.75 or 1.00%.
Remember: Because of the difference between the BUY and SELL prices, opening a new trade always produces an immediate loss. Spreads are also variable since it is driven by market conditions.
Remember that it is much better for the trader if the spread is lower.
Here are the typical spreads for the top 10 currency pairs traded on eToro
EURO / US Dollar = 1 Pip
US Dollar / Japanese Yen = 1 Pip
GBP / US Dollar = 2 Pips
US Dollar / Swiss Francs = 1.5 Pip
New Zealand Dollar / US Dollar = 2.5 Pips
US Dollar / Canadian Dollar = 1.5 Pip
EURO / GBP = 1.5 Pip
EURO / Japanese Yen = 2 Pips
GBP / Japanese Yen = 3 Pips
Australian Dollar / Japanese Yen = 2 Pips
Remember: These are the average spreads. Spreads on currency pairs can fluctuate according to the market.
A PIP is a term for "point in percent". It denotes the smallest decimal point in the price of a financial instrument.
However, eToro has now extended to include another decimal point called the "pipette", to provide a more accurate market price.
The following shows the popular cryptos traded on eToro and its corresponding spreads:
BTC = 0.75%
ETH = 1.90%
XRP = 2.45%
BCH = 1.90%
LTC = 1.90%
DASH = 2.90%
ETC = 1.90%
IOTA = 4.5%
ADA = 2.90%
IOTA = 4.5%
NEO = 1.90%
EOS = 2.90%
XLM = 2.45%
BNB = 2.45%
ZEC = 3.5%
Let’s show the example of Bitcoin. Currently, eToro’s spread on BTC is at 0.75%.
For example, you BUY and SELL a 0.1 unit of Bitcoin priced at $5,500, then your spread fee should be $41.25
The spread chart should look like this:
Initial Investment: $5,500
Bitcoin Open Rate: $55,500
Position: BUY 0.10 units
eToro Spread for BTC: 0.75%
Overnight fees: 0.00
Total fees: $41.25
Even though CFD trading do not require ownership of a physical asset, it still incurs overnight charges and spreads. Here are the average spreads on various categories of financial instruments on eToro:
Currency pairs = typical from 1 PIP to 2.5 PIP
Commodities = From 2 PIPs to as high as 45 Pips for Gold, to 2,000 Pips for Palladium Future Contract, to 650 Pips for Cocoa Future Contract and so on.
Indices = from 0.75 points to as high as 12 points for China A50 Index for example and so on.
Stocks and ETFs (CFDs) = 0.09%
Cryptocurrency CFDs = Starts from 0.75%
eToro weekend spreads are overnight charges happens for trades opened during the weekend. Normally, eToro's weekend spreads triples the amount of an overnight spread. Weekend spreads are usually charged on trades made on Wednesday and Friday.