Etoro vs Interactive Brokers Comparison 2024

eToro: Overview

Established in 2007 in Israel, eToro has become a leading derivatives broker known for its vast trading instruments, innovative tools, and a focus on copy trading. As one of the world’s largest social trading platforms, eToro offers diverse trading and investing options, making it an excellent choice for those seeking to expand their trading strategies.

eToro Highlights for 2023

• Top-Tier Regulations: Licensed by multiple high-level financial regulators, ensuring trustworthiness.
• Social Trading Focus: Connects over 20 million traders globally for idea and experience sharing.
• Versatile Platform: Offers a comprehensive platform facilitating easy order execution and advanced technical analysis.
• Trading and Investing Opportunities: Enables CFD trading and dividend generation from real stock investments.
• Wide Instrument Selection: Over 3,500 CFDs across various asset classes.
• Rich Educational Resources: Provides extensive market analyses, video tutorials, and varied content for in-depth market understanding.

Who is eToro For?

eToro caters to those interested in social and copy trading, with a community of over 20 million traders sharing strategies and experiences. It’s ideal for beginners who want to emulate successful traders without extra commissions and experienced traders seeking to expand their strategy reach and earn from new subscribers.

What Sets eToro Apart?

eToro stands out by not charging service fees for copying other traders’ strategies, a rare feature among brokers specializing in copy and social trading.

Interactive Brokers (IBKR): Overview

Interactive Brokers (IBKR), established in 1978, is a trailblazer in the trading industry, known for providing access to global markets, low fees, and cutting-edge technology. As a publicly traded company (Nasdaq: IBKR) with over $11 billion in equity capital and more than 2.1 million clients, it operates ten global entities, each regulated by its regional financial authority. Interactive Brokers offers a wide range of tradable assets, including global stocks, options, futures, currencies, bonds, and funds, all accessible from a unified platform.

Interactive Brokers Highlights for 2023

• Evaluated across nine categories, including Trust/Stability, Fees, Tradable Instruments, and more.
• Excels in product range, fees, platforms, and educational resources.
• Customer service accessibility needs improvement.
• The GlobalTrader app is beginner-friendly, offering access to global markets.
• Advanced traders benefit from the Trader WorkStation (TWS) platform’s professional-grade tools.

Who is Interactive Brokers For?

Interactive Brokers is best suited for advanced, semi-professional, and professional traders. The platform is increasingly accommodating beginners, especially with the GlobalTrader app and comprehensive educational resources.

What Sets Interactive Brokers Apart?

Interactive Brokers distinguishes itself as one of the world’s largest and most stable brokers, offering a vast range of tradable instruments, competitive fees, advanced platforms, and rapid order execution.

Trust

eToro is authorized in several jurisdictions by four Tier-1 regulators and one offshore regulator. The broker adheres to the most stringent safety requirements and guarantees its clients a very high degree of protection. I also assessed eToro to be a fairly transparent and trustworthy broker.

Interactive Brokers is one of the world’s largest and most stable brokers. The company is listed on Nasdaq (IBKR), has $11.6 billion in equity capital, and over 2.1 million clients. It is also licensed and regulated by multiple top-tier financial authorities globally.

Fees

eToro was one of the first brokers to introduce commission-free trading. Its floating spreads generally meet the industry average, though some are quite elevated. Its rollover fees are also higher than usual, though swap-free trading is possible via eToro’s Islamic accounts. The broker’s non-trading fees generally fall below the industry average.

Interactive Brokers is highly competitive in the area of fees. It is recognized as having the lowest costs in the industry, sometimes by a wide margin. Our hands-on tests of forex and CFDs instruments showed this to be true.

Trading Platform

eToro has developed its own feature-rich web trader platform as well as a very practical mobile app. The broker has developed an excellent ‘Delta Tool’, helping traders to better manage their portfolios. However, it does not incorporate any other retail platforms.

Interactive Brokers offers a range of award-winning platforms, from the web-based client portal to the advanced Trader WorkStation (TWS) platform and two proprietary mobile apps. We found the platforms powerful enough for professionals but also accessible to casual traders.

Tradable Instruments

eToro boasts a diverse portfolio of over 3,500 instruments across various markets, available for trading as Contracts for Difference (CFDs), ranging from lower-risk securities to higher-yield/risk assets. Moreover, eToro clients have the opportunity to invest in actual stocks and a wide array of cryptocurrencies, enhancing their investment choices.

Interactive Brokers offers an excellent range of products to trade, including stocks, options, futures, currencies, bonds, and funds. Traders can access a robust selection of CFDs on forex and shares, but there is room for improvement in the variety of CFDs on commodities.

Customer Support

eToro offers multilingual support via various channels, including email, live chat, and phone. However, the latter two are only available to active traders with at least $5000 in their accounts. Visitors of eToro’s website can send a request form to eToro’s customer support. There is also a dedicated FAQ section.

Customer service at Interactive Brokers is available via chat, phone, and contact form from Sunday afternoon through Friday evening, New York time. Customer support is not available on Saturday. In our tests, we found the quality of customer support to be mixed.

Research

eToro provides excellent in-house research materials and incorporates content from third-party providers. Traders are given access to multiple video breakdowns, written articles, market sentiment tools, and more. As a whole, eToro’s research content affords a 360-degree overview of current market developments.

Interactive Brokers offers outstanding market commentary and coverage of financial news via Traders’ Insights, available on the website and trading platforms. A steady feed of fresh content is provided by the analyst team at IBKR, along with third-party contributors such as Nasdaq, Investopedia, and Redwall Analytics.

Deposits & Withdrawals

eToro accepts payments via bank wire, credit/debit cards, or e-wallets. Deposits are charge-free, while withdrawals are liable for a $5 fixed fee plus any third-party banking fees that may apply. Transactions are processed fairly quickly.

Interactive Brokers does not charge for deposits and withdrawals. Requests are processed relatively fast. However, some popular funding methods, such as credit cards, are unavailable.

Account Types and Terms

eToro provides a range of trading and investing options through its singular CFD Trading account, adaptable for margin trading. The specific terms of this account can differ based on your account balance and tier within the ‘eToro Club’ program. The platform accepts multi-currency deposits, but it’s important to note that non-USD deposits incur a conversion fee. Additionally, eToro accommodates swap-free trading through its Islamic Accounts.

The application process at Interactive Brokers is straightforward, and can traders can complete the process within 15 minutes. Many account types are available, catering to different profiles.

Education

eToro’s educational content provides beginners with a solid foundation in trading basics, effectively covering essential concepts in an accessible manner. It serves as a useful introduction to the fundamentals of trading and an archive of key concepts. However, for those seeking to delve into more advanced topics and strategies, external resources will be necessary to complement this foundational knowledge.

The Interactive Brokers Traders’ Academy provides over 65 finance courses broken down into beginner, intermediate and advanced levels. The high-quality materials go into substantial depth and include interactive quizzes to aid the learning process.