Brokers and biased reviewers will use vague and complex language on purpose, to confuse you into thinking what they want to think. However, even though the topic is serious as you can lose or gain money, it is not as complex as they want it to seem to you. This eToro vs Trading 212 comparison will show you what is the actual meat and bones when it comes to assessing a good broker platform.
Both eToro and Trading 212 are geared towards small, retail investors that are looking to invest in popular stocks and ETFs or try their luck in a much riskier but also profitable CFD trading.
If you want to read more about how legit is eToro and other benchmarks of this broker like fees, pros & cons etc – click here.
Let’s quickly go over what are the benchmarks and gauges you should use when comparing brokers like eToro or Trading 212.
It all boils down to these things:
is broker regulated? If yes, by whom?
Does the financial watchdog require the broker to have an insurance fund to protect the users in case of insolvency or other trouble. If yes, how much do these protection funds amount to?
Another important aspect, a caveat the shady brokers gloss over – what assets are included in the protection fund? They often offer only fragmented protection for certain asset type. For example, since crypto is not regulated in most countries of the world, there is no protection for traders who trade crypto CFDs.
Then we come to fees. This is a hotbed of all misunderstanding and trouble for newcomers. There are two types of fees most brokers charge you (even those that market their platforms as feeless): trading and non-trading fees.
Trading fees occur when you trade – from opening position, leveraging it, keeping it open for certain time and closing it; any of these actions can be charged by the broker. Then there is a guaranteed stop protection fees.
Also depositing and withdrawing is often billed by the broker, usually a fixed fee. If the broker allows only certain currencies for…