Crypto Trading

eToro Spread fees | CFD Trading | eToro for Beginners

eToro Spread fees | CFD Trading | eToro for Beginners

eToro Spread fees | CFD Trading | eToro for Beginners

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Time Stamps:
00:00 Intro
00:49 What are spread fees?
01:37 No spread fee
02:18 Cryptocurrency spread fee
02:58 What is a CFD?
04:26 CFD spread fee
06:46 Final thoughts

The spread fee is the difference between the buy and the sell price for an asset. So basically, when you a buy something like a stock, there is a small mark-up price on the stock. Letโ€™s say for instance that 1 apple stock is priced at 0, but when you buy it, it will actually cost 0.09. That .09 is the spread fee.

This is how most exchanges make a big portion of their money. One of the reasons I really like eToro and also why the platform is great for my specific needs is the fact that eToro does not charge a spread fee when you buy individual stocks and ETFโ€™s. That said, if they are unleveraged.

When you buy any cryptocurrency like Bitcoin on eToro it does have a spread fee. Okay so the spread on Bitcoin is 0.75%. So if you want to buy 00 worth of Bitcoin, then you will have a .50 spread fee when you buy. So Far so Good!

Understanding the spread fee when it comes to CFDโ€™s get a little more confusing. But first, what is a CFD? โ€œCFDโ€ stands for Contract for Differences. When you buy CFDโ€™s, you are not buying the real underlying asset. You are basically buying an agreement between you and a CFD broker, eToro in this case, to exchange the difference in the value of a financial product between the time the contract opens and closes. So even though you donโ€™t technically own the asset, you do still benefit or not from the price movement.

So as said earlier, they are not the same for any CFD class. The spread on Stocks, ETFโ€™s and Cryptoโ€™s are percentage values, which are quite easy to calculate and understand. Okay, I am buying some stocks on leverage, my spread fee will be 0.09% of the amount I buy. Letโ€™s say its 00 of leveraged stock. The spread fee will be 90cents.

Currencies, commodities and Indices use โ€œpipsโ€ to calculate the spread. Again, the pip value differs for each one as you can see.

Most of the currencies are priced at 4 decimals, thus 1 pip equals 0.0001 and therefore you can multiply the pip value with 0.0001 and then multiply that amount by the amount of units you want to buy and you will find the spread fee of a specific currency. So I want to trade GBPUSD, the pip value is 2. So I multiply that with 0.0001 and I multiply again with the amount of Units I want to buy, for instance 1000 units. Therefore the spread fee will be 20 cents.

However, most of the commodities and indices are priced at 2 decimals. Thus you have to multiply the pip value with only 0.01. Letโ€™s say I want to buy oil. I will multiply the 5 pips with 0.01 and then multiply that with the number of units I want to buy, letโ€™s say 100 units, the spread will work out to be . There are some exceptions though, have a look at Palladium, even though it is a commodity it is priced at 4 decimals instead of 2.

Thanks for watching:)
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16 Comments

  1. How do you feel about eToro's fees? Comment down below…
    Thanks for watching :)๐Ÿ‘๐Ÿ˜€

  2. if i buy etf with short amount without leverage it shows cfd will i get any fees in long term or no ? because now i dont see any of them like you say when i buy i buy them few cents biger but no others fees are here to see i plan slowly buy etfs with small amount of money for long term so only i get this spread fees ?

  3. I don't think you addressed the fee when you sell your crypto currency. Etoro says this, "Most other brokers charge a spread on both the buy and the sell of an asset, but we only charge one spread, first charged when you buy the asset and adjusted when you sell it." I don't understand the "adjusted when you sell it"? So what fees do you pay when you sell your crypto? Thanks!

  4. Letting fear drive your investments decisions may seem counterintuitive, so pay attention to the market and be skeptical about what the crowd is doing. It's not always easy to do what's not popular but that's where you make your money.

  5. are spreads considered for tax purposes?
    I'm accounting for P/L of the trade plus rollover fees, but now sure if I should count spread commisino as well?

  6. When I look at an individual stock on etoro I still see a difference between the Sell and the Buy price. Is this not spread? The difference looks very small but I was still under the impression that there was no spread for individual stocks.

  7. I don't think that their is any other legitimate way to earn money nowadays rather than investing in bitcoin trading now, especially with it current rise.

  8. Something that confuse me is that: if I buy/sell with NO leverage, I still see a difference of price between sell/buy, as example: today (15 April 2021, 16:45) Apple sell 134.37 buy 134.62. Why they are different?

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