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Frequently Asked Questions

Category | Broker Management

eToro

Stocks

The stock market is dynamic and presents many options for traders. Stocks are usually Buying a stock on eToro by opening a “buy” (long), non-leveraged position means you are investing in the underlying asset, and the stock is purchased and held in your name. However, eToro also offers additional functions using CFD trading. With CFDs, you can open “sell” (short) positions, use leverage, and buy fractional shares.

For more information please see our Terms & Conditions and Key Information Documents.

Terms & Conditions:
https://www.etoro.com/es/customer-service/terms-conditions/

Key Information Documents:
https://www.etoro.com/es/customer-service/regulation-license/

Cryptocurrencies

eToro presents many options for those who wish to trade and invest in the crypto market. Cryptocurrencies display extremely high volatility, and it is quite common to see double-digit percentage fluctuations within a single day. Bitcoin, which is the first and largest cryptocurrency, is considered to be the benchmark for this market, and other currencies charts’ often move in the same direction as Bitcoin.

Buying cryptocurrencies on eToro means you are investing in the underlying asset, and the crypto is purchased and held by eToro on your behalf. These trades are unleveraged. Buying and selling the underlying assets are unregulated and have no investor protection. However, We also offer cryptocurrency CFDs, with which you can open “sell” (short) positions.

For more information please see our Terms & Conditions and Key Information Documents.

Terms & Conditions:
https://www.etoro.com/customer-service/terms-conditions/

Key Information Documents:
https://www.etoro.com/customer-service/regulation-license/

CFD Trading on eToro

What is a CFD? CFD stands for “Contract For Difference”. To put it simply, a CFD is an agreement between yourself and a broker to pay each other the difference between the price of an asset (such as Gold, EUR/USD, Microsoft stock, etc.) at the moment the contract is made and its later price when you decide to terminate the contract, i.e. close the trade.

It means that you do not own the actual asset, but rather, you engage in a contract with the owner (in this case, the trading platform), to settle the difference between yourselves when the deal has concluded.

This opens the door to many possibilities, such as fractional ownership of stock, short orders on assets that don’t offer short orders, and much more.

See all the information about CFD in:
https://www.etoro.com/es/customer-service/cfd-trading/

Short selling

Short selling is one of the best ways to try and turn a profit when markets are down. In short (pun intended), short-selling is a practice which enables traders to open a position that will increase in value if a financial instrument’s price goes down. This is used either when markets are falling, or as a hedging tool.

How short selling works
Short selling is an agreement between a trader and a broker, that can be carried out in various forms. The simplest scenario is one in which the broker lends the trader a certain asset, such as a number of a certain company’s stocks. The trader then immediately sells the stocks, and, after their price goes down, buys them back for a lower price. He then returns the assets to the broker and keeps the difference.

Of course, this is the optimal scenario for the trader, and often the transaction can prove to be less favourable. The term “short” refers to the fact that, after borrowing the stocks and selling them, the trader is now “short” a certain number of stocks.

On the eToro platform, short selling is done using a Contract for Difference (CFD). When using a CFD, the broker and trader agree to the terms beforehand and settle the difference between themselves at the end of the transaction, without the underlying asset changing hands. If the broker is licensed and regulated, they are required to give possible, present a conflict of interest.

More information about short selling in eToro:
https://www.etoro.com/es/blog/market-news-es/short-selling/

Leverage

How Does Leveraging Work? Simply put, leverage is a temporary loan given to the trader by the broker at a fixed ratio. Using leverage, you can open a trade of a larger size than the actual amount of funds you invest in it. Leverage is presented in the form of a multiplier that shows how much larger than the invested amount (the actual amount that you invest in a trade) an open position is. In the trading world, leveraging is considered a double-edged sword, since it multiplies gains, as well as losses.

For more information please see:
https://www.etoro.com/es/trading/academy/leverage-margin/

Depositing funds into your eToro account

How do I deposit? Funding your account is quick and simple. There are various payment methods at your disposal. Simply choose whichever method you prefer and follow the steps below to make a successful deposit:

Log in to your account
Click on “Deposit Funds”
Enter the amount and select the currency
Finally, select your preferred deposit method

More information:
https://www.etoro.com/es/customer-service/deposit-faq/

Payment methods and limitations

For your convenience eToro offers a range of payment methods. You can find a list of available methods here:
https://www.etoro.com/es/customer-service/deposit-faq/

What is the minimum First Time Deposit?

Depending on your region and country regulations, the minimum first-time deposit varies from $200 to $10,000.
To view your required minimum deposit, simply click “Deposit Funds,” and the minimum required amount will appear in the “Select Amount” box.

Which currencies does eToro support?

All eToro trading accounts are in USD. Therefore, when depositing with a different currency, the deposited amount will be converted at the current market rate. Please note that this is subject to a conversion fee. Our fee schedule is available here:
https://www.etoro.com/es/customer-service/market-hours-fees/?category=crypto- currencies

How do I wihdraw money?

Want to withdraw funds from your account? No problem! Customers may withdraw funds from their eToro account at any time. Funds can be withdrawn up to the value of the balance of your eToro account, minus the amount of margin used.

More information about withdrawing funds from your eToro account:
https://www.etoro.com/es/customer-service/withdraw-faq/

Market Hours & Fees

In the following link you can access detailed information about market hours and fees by eToro:
https://www.etoro.com/customer-service/market-hours-fees/

General Risk Disclosure

The following link contains all of the information about the risks asociated with the investment products offered by eToro:
https://www.etoro.com/customer-service/general-risk-disclosure/

Esfera IB

How is the execution of your orders with Esfera IB?

The execution is automatic according to order of arrival. This means that the first orders have execution preference over those that arrive later with the same execution point.

As for the operation of the execution points, Esfera IB acts according to the market rules.

-The IN price or execution point of purchase is a Stop Limit order. The order will be executed within a range between the indicated level and a maximum of 0.1% above. This is designed so that you do not lose the opportunity if your order is at the end of the queue and the price of the action moves upwards.

-The OUT price or execution point of sale with the expected return (a.k.a. "take profit"), is a Limit type order. This means it will be executed at the indicated price if it is reached or exceeds the rise, or at a higher price if there is an upward gap in the beginning of the trading session. There is a possibility that the stock price reaches the OUT execution point but the order doesn't get to be executed because of a lack of demand. The execution of the orders is only guaranteed if the OUT level has been exceeded.

-The STOP price or execution point by stop loss: once reached or exceeded the indicated price, a sale order is sent to market, to be executed at the best available price at that moment. That is, the execution of the order is guaranteed at a price equal to or lower than the STOP execution point.

-The time execution point: if 9 days go by since accepting the opportunity, and it does not leave by OUT or by STOP, a sale order is automatically placed to be executed at the opening of the following trading session, at market price.

Margin Account and Cash Account. What are the differences?

With a Margin Account, you will have the possibility of asking for leverage and financing the investment. With a Cash Account, you must have sufficient balance in the currency of the stock in which you wish to invest.

Can I finance my account in another currency other than mine?

Esfera IB accounts are multi-currency, so you can have your account in all currencies available (euros, dollars, yen, pounds, etc.). You can have your funds in a certain currency and change it in the Forex market at the exchange rate existing at the moment you want.

Can I invest in an stock issued in a currency other than that of my country’s?

Yes. The Esfera IB accounts are multi-currency, so you can invest in stocks issued in other currencies.

Do I have currency risk?

If you have a Margin account, you can make an investment in a currency other than that of your country without having a balance in your account in that currency, since Esfera IB gives you exchange rate risk coverage through the currency loan, with an interest rate.

What is the cost of financing interest?

The daily reference interest rate of the currency in which the asset is issued plus 200 basic points is applied.

When I invest in a foreign stock, is the currency conversion done automatically?

Esfera IB does not perform currency conversion automatically, it is the customer who can change currency through an operation in the Forex market when he wishes or deems it appropriate.

Can I invest more money than the balance in my account?

Esfera IB Margin accounts allow you to invest in an amount bigger than the balance of the account since they are accounts with leverage capacity.

How much does it cost me to leverage

The cost of financing established at the daily interest rate of the currency in which the stock is issued plus 200 basic points. The cost of financing is applied on a daily basis during the term of the financing. For example, if you invest more than the balance of your account in a US asset, you would be charged the interest rate to a reference day, Fed Funds Effective (Overnight Rate), to the amount necessary to cover the guarantees of the investment that are not covered by the balance of the account.

How much can I leverage my Margin account?

Your Margin Account can be leveraged based on the risks and products you have in your portfolio. A portfolio consisting exclusively of equity can be leveraged up to four times.

On what depends the leverage capacity of an equity portfolio?

Securities allow more or less leverage depending on the liquidity and volatility they have. A high liquidity value will allow you to invest in it using leverage if you have a Margin Account.