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

wmb194

silvercue said:

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.

But then again in the scheme of things one or two dollars is still very cheap. It's not that long ago £12.99 per trade was considered cheap.

silvercue

wmb194 said:

silvercue said:

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.

But then again in the scheme of things one or two dollars is still very cheap. It's not that long ago £12.99 per trade was considered cheap.

Understood, but in that scenario people will make small number of large trades.  Etoro has encouraged very small trades.  I also trade on a platform that is £5 per trade, but I use that for trades that are in the thousands, because that is what that platform is suited for.   Etoro I have made trades as low as $10, because that was what that platform was suitable for.

TheLastMongoose

Has anybody been able to verify this? As others have said, 1 month to exit dozens of trades is not long...It seems really underhand for them to do this with such little notice.

Edit: According to eToro website, in the UK we won't be affected?

https://www.etoro.com/trading/fees/

wmb194

TheLastMongoose said:

Has anybody been able to verify this? As others have said, 1 month to exit dozens of trades is not long...It seems really underhand for them to do this with such little notice.

Edit: According to eToro website, in the UK we won't be affected?

https://www.etoro.com/trading/fees/

Well there you go, crisis mostly averted. ETFs are commission free as well.

silvercue

TheLastMongoose said:

Has anybody been able to verify this? As others have said, 1 month to exit dozens of trades is not long...It seems really underhand for them to do this with such little notice.

Edit: According to eToro website, in the UK we won't be affected?

https://www.etoro.com/trading/fees/

Hi, UK are not in the first wave, so 11th Aug is not our deadline now, which is good.  It is for the first wave of countries. 

A number of UK users have posted that they have contacted their account manager (you get access to one at certain investment tiers) and they have said UK will be getting charges, just not yet.  I also emailed my AM and got this response, so not quite the same.

".....at the moment these fees do not affect the UK."

So, we will have to wait and see.  In the meantime I am tidying up my portfolio.  Closing a lot of positions and consolidating into much fewer, much larger positions.  

cautioustommy

I am in the same situation. Each month I make a modest deposit to my etoro account and re-balance my portfolio of around 20 stocks. This has resulted in having around half a dozen open positions in 20 stocks, some of which are based outside of US/EU/UK and so carry a $2 transaction fee rather than 1$. If I wait until after 11 August to close my account, just the act of closing my positions will cost an extra c. $150. I have set up an account with Trading 212 and plan on moving everything over to that platform. When I say moving, unfortunately transferring the stocks in-kind or "in-specie" is not possible for users outside of USA, in fact it is not even possible to liquidate my assets and transfer them in-cash. So I will have to liquidate the lot, withdraw the funds (pay capital gains on all profit realised at the end of the year in one go) and deposit my funds into my new Trading 212 account. It is worth noting that for deposits over £2000 into a Trading 212 account, there is a fee incurred if made as a card transaction, but not if you go for a bank transfer. I don't have any real justification to recommend Trading 212, so please don't take this as a recommendation. It is just the platform I ended up going for.

cautioustommy

TheLastMongoose said:

Has anybody been able to verify this? As others have said, 1 month to exit dozens of trades is not long...It seems really underhand for them to do this with such little notice.

Edit: According to eToro website, in the UK we won't be affected?

Thank you for this. I didn't realise. I will be affected from 11th August since I am tax resident in Spain 

adaplect

I'm in Greece so I dodged a bullet   

gascar

I have been using T212, and put a little in eToro to try it, as T212 is only OK for some types of investing/trading, and their service is getting worse. And I wouldn't trust them with over the FSCS limit.

Etoro's spreads are wide, the widest I've seen, anywhere. Their User Interface is indeed flaky. It's still driving me potty trying to guess what you have to click because it doesn't say.

They are better than T212 in that they have trailing stop losses on investments, and both SL and Take Profit settings. You can go leveraged x2 or x5 if you want to.

All of those are available on T212, bt they split the platform, so the features are only available on parts of it, which is a real pain.

Stop losses on eToro are only free though at low values (big losses), after that you have to pay, which is evil.

T212 has more etfs than eToro, by far.

So having used both, and made money on both, I can't recommend either.

If you have thousands to invest, I suggest you need somewhere where you can use Funds.. The free trading platforms only have simple ETFs and ETPs.

Funds are not always what you want, eg there doesn't appear to be a US Utilities fund. 

There are ETFs, but at the places where you can use either, there are fees to move between ETFs, whereas T212 and Toro are free.

You'll find S&P 500 everywhere in one form or another (eg UBS do an ETF tracker) if they don't have the Vangard ones.

But e.g Jupiter India which I used for a year for a 55% growth, is a Fund not at eToro or T212 and there's nothing close.

I have some money (small SIPP and ISA) at Hargreaves Lansdown for historical reasons.

Oooh they have high fees, you'll hear, but for me 0.45% rather than say 0.25% is not enough to worry about. They ARE good to use.

I don't invest shares there, partly because of the £24 round trip fees, but on £50k it's small beer.

Here's a selection of options which I hope some will find interesting. 18 months.

As explained, most options there are not available on T212 or eToro:

I used/am using  a combination of Tech, ( & Utilities and Finance sectors +currently gold ), but that smooooth Orange line is compelling - a fund you won't find everywhere.

An even better range is available at ii, Fidelity, maybe others. Graph c/o HL.

Someone said day trading lis gambling. They were wrong. I've multiplied my starting amount.. People say it's like a horse race. But it's not. It would be if you could switch mid horse-race between the horses as you can with investments so you're always on the fastest one.

You can beat the above funds if you use leveraged ETFs but you have to understand their potential horrors, and be selective and watch them. I do use them. I bought NVDx3 at 949 and sold at 6500 earlier in the year. Last bought at 2900, currently 5500. If you invest in Rolls Royce, the price may go down for a while but it's not going to evaporate. (3x is Up ~250% in 18 months, 40% past month.)

Leveraged etfs are available at T212, Hargreaves Lansdown - most places I think.,. Etoro charge you overnight for leverage at egregious rates, but you can use x5..

If you're going to trade as such, use somewhere which does  "spread betting" which is exactly the same but invented with the "betting" tag so you  don't pay CGT (at the moment). I use Capital, Pepperstone.

I should add that if you trade too frequently, T212 will keep your money. They have been to court over it - their small print needs to be understood.