Any eToro users - significant changes to fee system to be aware of

silvercue

In case any eToro uses here.  They are adding flat fees for every stock trade from August 11th.   UK and EU customers do not all appear to have the email yet, but US ones do, but it applies to all users.

Charges are $1 to open or close a trade.  So $2 to open and close a position.

Sounds like it is very little, but they have sold their service as commission free ability to trade partial stocks at low values.  Very much aimed at new investors.  So many people open multiple small positions for a stock over a few days or weeks, rather than one much larger position.  

Not really sure what their selling point is now as the spreads are bad, the UI is flakey, the charts are broken, SL and TP are often broken and the place is full of trolls who hide their profiles and shout about incoming market crashes!

I might close my account as I have hundreds of open positions so this is simply a huge charge from nowhere.  The problem is that then creates a tax burden I was planning to mitigate using £3k CGT limit yearly!!

If anyone else here uses eToro and considers moving as a result, I would be interested to know where you will go.  

InvesterJones

silvercue said:

Not really sure what their selling point is now as the spreads are bad,

Spreads should be the same as anywhere else surely? Presumably the legal block on them making margin on spreads is why they need to charge for trades.

wmb194

silvercue said:

In case any eToro uses here.  They are adding flat fees for every stock trade from August 11th.   UK and EU customers do not all appear to have the email yet, but US ones do, but it applies to all users.

Charges are $1 to open or close a trade.  So $2 to open and close a position.

Sounds like it is very little, but they have sold their service as commission free ability to trade partial stocks at low values.  Very much aimed at new investors.  So many people open multiple small positions for a stock over a few days or weeks, rather than one much larger position.  

Not really sure what their selling point is now as the spreads are bad, the UI is flakey, the charts are broken, SL and TP are often broken and the place is full of trolls who hide their profiles and shout about incoming market crashes!

I might close my account as I have hundreds of open positions so this is simply a huge charge from nowhere.  The problem is that then creates a tax burden I was planning to mitigate using £3k CGT limit yearly!!

If anyone else here uses eToro and considers moving as a result, I would be interested to know where you will go.  

Do you have to close your account? Can you not transfer your holdings in-specie to another stockbroker? Where are they listed? UK and US listed securities shouldn't be a major problem for T212, CMC Invest and Freetrade.

Edit: Perhaps not. https://help.etoro.com/en-us/s/article/can-i-transfer-my-stocks-to-another-broker-acats-US#:~:text=Yes%2C%20US%20users%20can%20move,Account%20Transfer%20Service%20(ACATS).

wmb194

InvesterJones said:

silvercue said:

Not really sure what their selling point is now as the spreads are bad,

Spreads should be the same as anywhere else surely? Presumably the legal block on them making margin on spreads is why they need to charge for trades.

The OP could be referring CFDs and not listed securities.

Hoenir

silvercue said:

Sounds like it is very little, but they have sold their service as commission free ability to trade partial stocks at low values.  Very much aimed at new investors.  So many people open multiple small positions for a stock over a few days or weeks, rather than one much larger position.  

Typical loss leader approach to winning market share. Cannot afford to lose money indefinately on this line of business so now imposing fees. Day trading isn't the way to become wealthy. Over time it's a sure way of losing money. Nothing more than a punt. Heads or tails. 

silvercue

wmb194 said:

silvercue said:

In case any eToro uses here.  They are adding flat fees for every stock trade from August 11th.   UK and EU customers do not all appear to have the email yet, but US ones do, but it applies to all users.

Charges are $1 to open or close a trade.  So $2 to open and close a position.

Sounds like it is very little, but they have sold their service as commission free ability to trade partial stocks at low values.  Very much aimed at new investors.  So many people open multiple small positions for a stock over a few days or weeks, rather than one much larger position.  

Not really sure what their selling point is now as the spreads are bad, the UI is flakey, the charts are broken, SL and TP are often broken and the place is full of trolls who hide their profiles and shout about incoming market crashes!

I might close my account as I have hundreds of open positions so this is simply a huge charge from nowhere.  The problem is that then creates a tax burden I was planning to mitigate using £3k CGT limit yearly!!

If anyone else here uses eToro and considers moving as a result, I would be interested to know where you will go.  

Do you have to close your account? Can you not transfer your holdings in-specie to another stockbroker? Where are they listed? UK and US listed securities shouldn't be a major problem for T212, CMC Invest and Freetrade.

Edit: Perhaps not. https://help.etoro.com/en-us/s/article/can-i-transfer-my-stocks-to-another-broker-acats-US#:~:text=Yes%2C%20US%20users%20can%20move,Account%20Transfer%20Service%20(ACATS).

As far as I understand they do not provide a service to transfer.  

silvercue

Hoenir said:

silvercue said:

Sounds like it is very little, but they have sold their service as commission free ability to trade partial stocks at low values.  Very much aimed at new investors.  So many people open multiple small positions for a stock over a few days or weeks, rather than one much larger position.  

Typical loss leader approach to winning market share. Cannot afford to lose money indefinately on this line of business so now imposing fees. Day trading isn't the way to become wealthy. Over time it's a sure way of losing money. Nothing more than a punt. Heads or tails. 

It is not just day traders.  There are a lot of people that were attracted to just buying in small amounts for no commission fee.  They can build up a portfolio like this over years.   So, they can still be investing and will have these unexpected charges when they want to close all of those positions.

wmb194

silvercue said:

Hoenir said:

silvercue said:

Sounds like it is very little, but they have sold their service as commission free ability to trade partial stocks at low values.  Very much aimed at new investors.  So many people open multiple small positions for a stock over a few days or weeks, rather than one much larger position.  

Typical loss leader approach to winning market share. Cannot afford to lose money indefinately on this line of business so now imposing fees. Day trading isn't the way to become wealthy. Over time it's a sure way of losing money. Nothing more than a punt. Heads or tails. 

It is not just day traders.  There are a lot of people that were attracted to just buying in small amounts for no commission fee.  They can build up a portfolio like this over years.   So, they can still be investing and will have these unexpected charges when they want to close all of those positions.

It's always going to be the danger. CMC Invest and Freetrade have shifted to a 'freemium' model and apparently T212's plan is to do this in due course. Robinhood UK is worth looking at for US shares and has an amazingly cheap GBP/USD FX conversion fee.

silvercue

wmb194 said:

silvercue said:

Hoenir said:

silvercue said:

Sounds like it is very little, but they have sold their service as commission free ability to trade partial stocks at low values.  Very much aimed at new investors.  So many people open multiple small positions for a stock over a few days or weeks, rather than one much larger position.  

Typical loss leader approach to winning market share. Cannot afford to lose money indefinately on this line of business so now imposing fees. Day trading isn't the way to become wealthy. Over time it's a sure way of losing money. Nothing more than a punt. Heads or tails. 

It is not just day traders.  There are a lot of people that were attracted to just buying in small amounts for no commission fee.  They can build up a portfolio like this over years.   So, they can still be investing and will have these unexpected charges when they want to close all of those positions.

It's always going to be the danger. CMC Invest and Freetrade have shifted to a 'freemium' model and apparently T212's plan is to do this in due course. Robinhood UK is worth looking at for US shares and has an amazingly cheap GBP/USD FX conversion fee.

I am taking a look at Robinhood, I have an account but have not deposited any funds.  Also looking at Trading 212 and Interactive Broker.  

Hoenir

silvercue said:

Hoenir said:

silvercue said:

Sounds like it is very little, but they have sold their service as commission free ability to trade partial stocks at low values.  Very much aimed at new investors.  So many people open multiple small positions for a stock over a few days or weeks, rather than one much larger position.  

Typical loss leader approach to winning market share. Cannot afford to lose money indefinately on this line of business so now imposing fees. Day trading isn't the way to become wealthy. Over time it's a sure way of losing money. Nothing more than a punt. Heads or tails. 

It is not just day traders.  There are a lot of people that were attracted to just buying in small amounts for no commission fee.  They can build up a portfolio like this over years.   So, they can still be investing and will have these unexpected charges when they want to close all of those positions.

The Covid era attracted speculators rather than investors. The gamification of investing with Apps being a contributory factor. Investors funding these businessess are following the early Amazon model. Crush the opposition (in the process making losses over many years) to gain market share. 

silvercue

Hoenir said:

silvercue said:

Hoenir said:

silvercue said:

Sounds like it is very little, but they have sold their service as commission free ability to trade partial stocks at low values.  Very much aimed at new investors.  So many people open multiple small positions for a stock over a few days or weeks, rather than one much larger position.  

Typical loss leader approach to winning market share. Cannot afford to lose money indefinately on this line of business so now imposing fees. Day trading isn't the way to become wealthy. Over time it's a sure way of losing money. Nothing more than a punt. Heads or tails. 

It is not just day traders.  There are a lot of people that were attracted to just buying in small amounts for no commission fee.  They can build up a portfolio like this over years.   So, they can still be investing and will have these unexpected charges when they want to close all of those positions.

The Covid era attracted speculators rather than investors. The gamification of investing with Apps being a contributory factor. Investors funding these businessess are following the early Amazon model. Crush the opposition (in the process making losses over many years) to gain market share. 

Yes, I have no doubt there is a lot in that.  But it is a very fundamental change to their offering.  The email announcing it is also an update and this is just a component of that, so worth alerting peopl early as 1 month seems like a really short notice period for such a fundamental change.