NegoSentro – JR Aldiosa, Correspondent |The world’s leading social trading platform, eToro, has stepped up its efforts in the Philippines, seeing a huge potential for expansion amid the struggling stock market. Founded in 2007, eToro stands out from other financial technology companies by incorporating a social element to its online trading platform. For example, their patented CopyTrader™ feature allows traders to copy other investors with just a click of a button. Users are also given access to a pool of relevant information regarding fellow traders such as Risk Scores, gains, track records, and portfolio compositions, empowering users to make the best investments.
NegoSentro spoke to Paul Henry Familiaran, eToro’s Head of Southeast Asia Region, to get his insights on eToro, social trading, and the emergence of cryptocurrency.
As a platform, what features make eToro standout from other FinTech services, and how do these features impact the way traders manage their assets?
“eToro offers three ways for clients to access the markets:
- Online trading: you can trade across multiple asset classes, including commodities, currencies, stocks, crypto assets, ETFs, and indices.
- Copy people: for those who lack the time or experience, our CopyTrader™ technology enables clients to replicate another trader’s portfolio and trading activity automatically so that they benefit from others in-depth knowledge and investment expertise.
- CopyPortfolios: investors can use our CopyPortfolios to access unique investment portfolios. A. Top Trader CopyPortfolios comprise the strategies of the best performing traders on eToro.
A. Market CopyPortfolios bundle asset classes together under one chosen market strategy.
B. Partner CopyPortfolios offer portfolios from third-party experts”
What is Copy Trading, and how does it benefit traders?
“We understand that some traders lack the time or experience to use traditional methods of online trading. Copy Trading is the system which allows a user (the “Copier”) to copy certain trades executed by another eToro user (the “Copied Trader”). Users can also choose a certain trader and copy their entire portfolio in real-time with their chosen investment amount.
Since we believe in full transparency, each user’s portfolio, track record, and risk score are available for all to see. Hence, our clients have all the information they need to choose the right trader to copy. Copiers can choose to only replicate new trades that the Copied Traders open after the copy action starts.”
How does eToro help those just starting to dip their toes in the stock market?
“eToro offers a variety of trading tools and courses through its Trading Academy to equip both first-time and experienced users with learning opportunities to become educated traders or long-term investors. We also have a global community of more than ten million people on our platform who share their investment strategies, and anyone can follow the approaches of those who have been the most successful.
Promoting financial literacy is important for eToro. Our courses offer a smooth entry point into the world of online trading, and our free virtual account enables you to trade online without risking any real money. Every trader who signs up with eToro receives a virtual-money account, credited with $100,000, so they can practice their strategies and hone their skills before trading with real money.”
How does eToro help seasoned veterans who already have experience in the stock market?
“eToro’s business model is based on its client’s financial success, so when they succeed – we succeed. That’s why we encourage our top traders to share their knowledge and reward them when more people copy them. The Popular Investor program allows users to earn directly from eToro when they are copied by others and allows copiers to gain from their wisdom, experience, and success. The program is built from 4 levels (Cadet – Elite) and each level has its own benefits and requirements.
When copied by other people, Popular Investors earn fixed payments and up to 2% of their annual assets under management (AUM) from eToro. These payments are in addition to any profits made from their own trading. The most successful Popular Investors enjoy a 100% spread rebate on all their trades and all payments are credited as real, immediately withdrawable funds.”
What makes cryptocurrencies so appealing to traders, new and old? What are the advantages and disadvantages of cryptocurrency?
“Blockchain is a decentralized ledger that allows transactions to be made without the need for a middleman. The technology enables crypto assets to work. Blockchain to crypto assets is the equivalent of the internet to emails. Cryptoassets are tokenized assets that act as an exchange of value.
Cryptoasset transactions do not require a middleman to hold your information. This minimizes the risk of your financial details being compromised. Cryptoassets intended for payment are also sheltered from inflation, as they cannot be impacted by monetary policy decisions from the government.
However, crypto assets are nascent technology, meaning their value is volatile. There is a lack of consistent regulation globally, which means investors in crypto assets are unlikely to be afforded the same protections as they are with more traditional asset classes.
There are currently 15 crypto assets available on the platform, including Bitcoin, Ethereum, Ripple, Neo, Stellar, EOS, etc.”
What advice can you give traders and prospective traders looking to increase the value of their portfolio?
“We encourage clients to consider leverage carefully, diversify their portfolio and take notice of the risk scores for every user with a public account that can be copied on the platform, including the Popular Investors.”