Friday, September 13, 2013

How does eToro make money, and why does the company want traders to be profitable?

Due to the lack of commission involved in trades made with eToro and numerous benefits offered to users, you might be wondering how the company manages to stay in business. Here’s where the eToro policy of simplicity and transparency comes into play: eToro does not charge any commission whatsoever on trades. The only revenue eToro makes comes strictly from the spreads (meaning the difference between the “ask” and “bid” prices). Exceptionally low spreads are part of what makes eToro so special, and that’s another reason I have developed a system for this platform. By offering such low spreads, eToro strives to make traders happy and motivate them to continue using OpenBook. By inspiring a loyal community of traders to choose and stick with eToro, more trades will be made, which in turn makes eToro more profitable as a company.

So, you might ask, how does that affect eToro’s attitude toward its traders’ success? The company will make a profit regardless of how successful a trader may be, right? The answer is, as usual, simple: eToro wants traders to learn, grow, challenge themselves, have fun, and especially make a profit. Successful traders are happy traders, and happy traders continue trading – which comes back to the point that the more trades made, the more revenue eToro generates.


By helping traders be successful and become more and more profitable, eToro is in turn able to stay in business. To that end, eToro offers tools like CopyTrader in order to make it possible for more people to profit from online trading.

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