eToro, the global social investing platform, just launched its innovative “CopyTrading” feature for U.S. users. It will allow the app’s 11 million accounts to automatically copy the moves of top securities traders. They’ll win – or lose – the same percentage of their investment. It’s like following someone on social media but with money. eToro Director of Finance and Operations Hassan Ahmed revealed on Twitter that CopyTrader has made its way to the U.S.
Ever the innovative fintech firm, eToro’s copytrading arrived in the U.S. just days after it launched a Twitter mention-weighted crypto portfolio. The company claims the algorithm, which makes trades based on “crypto Twitter” sentiment, has delivered 281% returns for its creators over the past two years.
Following CashApp’s launch of fractional share brokerage last week, the new copytrading feature is another step in the democratization of financial services.
Retail investors using eToro won’t have to match the total amount of their favorite trader’s funds to copy their trades. They can apply a smaller amount toward CopyTrading, and eToro will mirror the trader they copy by percentage. There is only a minimum $200 investment to use the feature.
The Cyprus, Israel-based fintech company hired Alec Baldwin as a celebrity spokesperson for its U.S. copytrading launch.
Baldwin lays on the charm in a video ad the company tweeted Tuesday morning with the tagline, “Copy the smart money,” and the hashtag: #JustHitCopy
The Emmy Award-winning 30 Rock and Saturday Night Live actor says:
“Now maybe you’re thinking, but I’m just a food blogger, I can’t do this trading stuff on my own… Just find a top investor on eToro… and hit copy. From now on, whenever they make a trade, you make the same trade automatically.”
Alec Baldwin isn’t the only celebrity eToro has enlisted in its U.S. copytrading debut. UFC Champion Ben Askren sent a sponsored eToro tweet Tuesday to over a quarter-million followers using the #JustHitCopy hashtag. He’s one of the whitelisted traders U.S. users can now copy.
Users can also copy the crypto trades of Nicholas Merten, the king of crypto YouTube.
Actively managed portfolios notoriously underperform indices like the S&P 500. And day trading securities is an infamously risky, usually money-losing enterprise. No wonder that eToro’s copy trading feature is generating buzz in the retail investing community.
The ability to automatically make the same trades as day traders with a solid record of consistent returns helps manage the risk. But users should be aware that copytrading doesn’t eliminate the risk entirely. Take, for instance, eToro’s record on CFD positions.
Crypto assets aren’t the only security available on eToro. Users can invest in stocks, ETFs, indices, and derivatives like contracts for difference (CFDs) among others.
It turns out 66.5% of eToro accounts lose money on CFDs, but according to Finance Illustrated, that’s the lowest loss rate of any brokerage on CFDs over the last 12 months. During that time period, 87% of CFD traders overall lost money.
In making such decisions, You have considered your entire financial situation including financial commitments and you understand that using Social Trading Features is highly speculative and that you could sustain significant losses exceeding the amount used to copy a trader or traders.
That said, there are traders on the platform with annual returns in the double digits. Some are even deep into the double digits.
Last modified: June 12, 2020 6:47 PM UTC