You would love to invest in the purchase of shares , but you are facing a crossroads: on the one hand, bureaucratic delays and the general climate of distrust discourage you from turning to the classic banking system; on the other hand, you look with great interest at online investment tools, which allow you to do everything easily and independently, but you are afraid of running into mechanisms and situations that are too difficult to manage in person.
In short, what you would like is a safe, smart solution – therefore able to make you manage everything easily and independently – but also able to clarify all the doubts you still have about the world of online investments and to provide you with the tools you need to evaluate the market trend as it should be. Did I guess? Well then I really think you should take a look at eToro , the global multi-asset investment platform, specializing in social investing, which has been around since 2007 and boasts 20 million users from more than 140 countries around the world. world (it is also a CySEC authorized broker for Europe, so you can be sure of its reliability).
With eToro you can buy shares without commissions or hidden costs directly from your PC. The account opens in minutes from a computer or app and there is also a demo trading account with $ 100,000 worth of virtual funds to practice with. You can also take a cue from better performing traders and automatically copy their portfolios – just what you need to get started on the right foot! But now enough chat and let’s get to the heart of the guide: find everything you need right here below.
- What are shares and how to buy them
- How to buy shares on eToro
- Open the account
- Deposit funds
- Finding the stocks to buy
- Buying and selling stocks
- Commissions and taxes
- For more information
What are shares and how to buy them
If you are new to the world of investing, you may have a few questions related to the concept of action itself and how buying it works .
Well, shares are the parts into which the share capital of a joint-stock company is divided: buying them allows you to become shareholders and own a portion of the company to which they belong, while obtaining the related rights and charges. There are different types: below you will list those that can be had in listed companies on the stock exchange.
- Savings shares: they do not give voting rights to those who own them but allow them to participate in the distribution of dividends.
- Preferred shares: whoever owns them has the right to vote only during extraordinary meetings and receives better treatment in the distribution of dividends.
- Increased voting shares: these allow the holder, if provided for by the company bylaws and if the shares have been in his possession for at least two years, to obtain up to two votes for each share held.
- Ordinary shares: they do not give voting rights or other rights to those who own them, but allow them to participate in the distribution of dividends or in the distribution of the company’s assets, should the company be liquidated.
The shares of the companies are listed on the stock exchanges , that is physical places regulated by the government authorities in which – subject to specific authorizations – the companies can ask to be listed. The saver can access the markets through authorized banks and brokerage firms , which buy and sell shares on the stock exchange’s trading systems on behalf of customers.
The market also determines the price of the shares, which can go through bullish phases (in which they rise in value) or bearish phases (in which they fall in value) based on many parameters. At the base of everything there is the classic market value, for which when a good is scarce and the demand is high, the latter rises in price; conversely, when supply is high but demand is low, its price falls. In reality, however, there are many other variables to consider, such as the state of the economy or the sector in which a particular company operates, the ratings of the rating agencies and so on.
In short, predicting with absolute precision how the shares of a particular company will go is impossible: it is therefore necessary to always take into account the equity risk and act in such a way as to reduce it as much as possible, adopting the right investment strategies .
First of all, it would be advisable to diversify your investments by buying shares of different companies, perhaps from different sectors and using tools such as the stop loss , which allows you to automatically stop losses when the price of a share falls below the set margin. You can then apply several proven strategies, such as those listed below.
- Value investing– consists of buying shares when they are below their market value, in view of a bullish phase.
- Growth investing– when investing in the growth of young companies with a good chance of making above-average results in the sector in which they operate.
- Small-cap investing– when investing in companies with a small market capital (small cap) with the aim of obtaining high returns in the future. It is a fairly high risk investment, as small caps are very volatile realities.
- Dividend investing– this is when you bet on companies that release dividends on the shares owned, knowing however that these depend on whether the company is making profits or not and that they may not even be distributed for some periods.
- Socially responsible investing– is the type of business that plans to invest in companies that strongly take into account the well-being of the environment and the people who work in them.
Net of the strategy adopted, the purchase of shares is typically a long-term investment . In fact, those who carry it out aim to manage the shares in a securities account and resell them after many months, if not several years, in order to be able to earn from their increase in value. In the meantime, it is possible to earn by collecting any dividends that many companies distribute based on the profit margins made during the year.
Buying direct, however, is not the only way to invest in stocks. Here a clear distinction must be made between what is the direct purchase of the share and trading , which in some cases is used as a synonym but which in reality has clearly different purposes.
Buying the shares of a company directly is – as mentioned above – a long-term investment . Making trading , however, often means buying and selling shares within a few hours (or at least during the day) to take advantage of the daily volatility of the securities and cash in profits immediately , however, exposing themselves to greater risk.
How to buy shares on eToro
If you want to buy shares without approaching the classic and obsolete banking system, you can turn to a smarter solution, able to guarantee high security and reliability and, at the same time, maximum flexibility and autonomy in your investment operations. .
So here I am to explain to you how to buy shares on eToro which, as mentioned, is the world’s leading social trading network and has been operating since 2007 allowing its users (over 20 million from more than 140 countries around the world) to easily invest in stocks, commodities, crypto, ETFs and more. Its main purpose is precisely to make the world of investments accessible to anyone, and it does so by providing a wide range of tools thanks to which both the beginner and the more experienced trader can analyze the trend of the markets and make their own investment choices in a more informed way.
Would you like to know more? Then read on. I will use the eToro website for the tutorial , but if you prefer you can also use the eToro mobile app available for Android and iPhone / iPad .
Open the account
The first step you need to take is, of course, to open an account on eToro . You can do this in minutes by keeping a valid ID and proof of your residence at hand (e.g. a utility bill or bank statement in the name of the same person opening the account).
Now you have to decide whether to do some practice with eToro using the demo trading account with $ 100,000 of virtual funds made available by the platform (via the appropriate item in the menu) or whether to make a deposit and start buying really. actions. In the latter case you must verify your account : to do this, click on the appropriate button on the eToro dashboard and fill out the form that is proposed to you with the personal information requested.
Next, enter your address , your ID number and indicate your degree of investment experience by answering the various questions you are asked on the subject. Then specify which assets you plan to invest in and for how long you plan to keep your positions open , also indicating your purposes (e.g. short-term returns , additional income , plans for the future or savings for the home ).
After this step too, specify how much you plan to deposit into your account over the course of the year and which risk / return scenario would best describe your annual investment expectations with eToro . You will then be asked “customary” questions (required by law) about your and your family’s activities , after which you will need to indicate your sources of income , what work you do , the name and address of the employer , your net annual income and your total cash and cash equivalents. All this information is strictly confidential and serves eToro to ensure that its clients invest according to their actual availability.
Mission accomplished! At this point you can use eToro to buy shares and trade, but with a deposit limit of $ 2,000 . If you want to remove this limit you must verify your profile by authenticating your mobile number (you will receive a verification code via SMS to be entered in the appropriate field on the eToro website or app), uploading photos of your identity card or passport , providing proof of your address and finally entering your tax identification number(i.e. the tax code). It is all very intuitive but if some steps are not clear to you, you can take a look at my “generic” guide on how eToro works where you will find even more detailed instructions on how to open an account.
Note: in addition to being a retail client , it is also possible to register with eToro as professional clients , who may exceed the restrictions normally provided for the use of financial leverage but must waive certain ESMA protections, such as the Investor Compensation Fund and recourse. to the Financial Ombudsman Service. To pass from a retail client to a professional one, it is necessary to pass specific tests. Read more here .
When you are ready to deposit funds on eToro , all you have to do is press the Deposit funds button and indicate the amount to be loaded (minimum $ 50) and then choose a payment method from those supported: credit / debit card , PayPal , Rapid Transfer , Skrill , Bank Transfer , Direct Transfer and Neteller .
Then follow the instructions on the screen to enter the data relating to the selected payment method and complete the transaction. Clearly, the crediting times vary according to the method used. However, there are no commissions to pay.
Furthermore, once you have made your first approved deposit by credit or debit card, you can set up periodic deposits by going to the Settings> Payments menu .
As far as withdrawals are concerned, a very similar procedure must be followed: after selecting the item relating to withdrawals from the eToro menu, just enter the required information and you’re done. In this case, a flat fee of $ 5 is applied with a minimum withdrawal of $ 30 .
Finding the stocks to buy
eToro offers over 2,500 assets on which to invest, including equities of the main listed companies, commodities , ETFs (Exchange-Traded Fund) , stock market indices and cryptocurrencies . So how to find the shares to buy? There are many evaluations to be done, but there is certainly no shortage of support tools.
By going to the Search section of eToro, for example, you can find a selection of investment opportunities in global markets with stocks from certain sectors (e.g. Chip-Tech sector stocks) to consider. Scrolling the page there are, then, the suggestions related to Copy Trading , ie the possibility of copying the portfolios of traders with the best performance on eToro . The Smart Portfolios could also prove to be particularly interesting , with which eToro offers thematic collections of various assets with the best performance.
You can also choose to browse the available assets by category , including stocks . By accessing this view you can use the menu located at the top to browse the available shares based on Industry (i.e. sector) they belong to and the exchange market to which they belong. You will then see a table with the assets corresponding to your search with the current trend, the buttons to sell and buy, the 52 week range (i.e. the highest and lowest price at which a stock was traded in the previous 52 weeks) and the sentiment .
By selecting an asset you can analyze it in detail by browsing the various tabs you see above. For example, in the Feed you can find the latest posts about the asset published by eToro traders. In Statistics , on the other hand, you will find an overview with graphs on the trend of the asset over time, performance, variations, capitalization and other very useful data for fundamental analysis .
Fundamental analysis is very important in the valuation of the securities to be purchased (and, more generally, in the valuation of investments over the long term). In fact, it provides a holistic approach in which not only the data and graphs of a specific asset are taken into consideration, but also everything around it, for example international political conditions, the state of the sector or the country in which the company that owns the asset operates, the production costs of certain goods and so on.
Another type of analysis that is carried out on assets is technical analysis , which is more suitable for short-term investments (therefore for trading). It is based on the analysis of the graphs relating to the price of an asset: by analyzing the latter and using particular models, we look for trends that repeat themselves with a certain constancy and with a certain frequency over time, in order to predict the behavior of the asset in the future.
Very useful for the technical analysis of assets is the eToro Chart tab , in which, thanks to the ProCharts function ( more information here ), it is possible to create professional charts to view multiple instruments at the same time or the same instrument using various parameters.
The Research tab is also very useful for asset analysis, as it shows the trend of the latter with Hedge Fund activities and internal transactions, plus the forecasts of various analysts present on eToro.
Another very useful tool that could help you identify the stocks to buy is eToro’s CopyTrader , which allows you to discover the most popular and best performing traders to copy their portfolios automatically.
You can filter the various traders based on their origin , the markets in which they have invested and the earnings obtained over time , and analyze their performance using the tabs on their personal pages (just like you can analyze the various assets).
To copy a trader’s portfolio , just click on the appropriate button: you can choose whether to copy the open trades or only those he will open and whether to stop copying if the value of the copy falls below a threshold . You will then find the contents of the trader’s wallet in the Portfolio section of your eToro. Read more here .
Other interesting ideas are those given by eToro’s Smart Portfolios, the so-called CopyPortfolios which, as mentioned, are thematic portfolios packaged by eToro containing various types of high-performance assets, including shares.
You can browse them in the appropriate section of eToro (with the possibility of filtering them based on performance , popularity , profile and risk ) and analyze their content by selecting their names and then going to the Portfolio tab . To invest in them and add them to your Portfolio , just click on the appropriate button. You can also choose to stop investing if the value of the CopyPortfolio falls below a certain amount . Read more here .
When you find an asset of your interest (you can also search for them directly using the search bar at the top), you can possibly monitor it before buying it, adding it to your Favorites : this section of eToro shows the trend of the assets of your interest. , along with a selection of assets proposed by default by the platform.
Buying and selling stocks
When you are ready to buy shares on eToro, select the asset of your interest and click on the Invest button ; then select the Buy tab , indicate the amount to invest (making sure it is higher than the minimum required value) and, to buy the real asset, select the X1 option from the Leverage menu . As evidence of the fact that you have chosen the direct purchase of the asset, the item you are buying the underlying asset without commissions will appear .
By going to the Stop loss tab you can set the stop loss amount, which will allow you to automatically close your position if the loss reaches the indicated figure, while by ticking the option related to the Trailing stop loss you can make sure that the stop loss is adjusted to the market trend thus safeguarding the profit obtained. Read more here .
In the Take profit tab , on the other hand, you can set your profit target and automatically close the transaction at a specific rate if the price moves in your favor (the profit will be credited to the available balance), also closing the position. Read more here .
Using the Invest / Order drop-down menu you see at the top right you can also open a pending order . In this way you can place an order which will however be converted into a real position when the market reaches the price you have set (the allowed range varies depending on the instrument). Read more here .
At this point, click on the Set Order button and your order will be confirmed. Obviously, trades are executed during market opening hours ( more information here ). Below, you will find all your orders and investments in the eToro Portfolio section .
In the Portfolio section you can find a summary of available cash , total invested capital , profit and virtual assets and you can browse, through the tabs at the top, the History of operations carried out, the contents of the Portfolio (with statistics updated in real time) and the Orders carried out.
You can close a position or cancel an order by simply clicking on the line of the instrument you want to close, then on the red X and selecting the item relating to closing or cancellation . You can also close part of the transaction by selecting the amount in USD or units you want to close. Read more here .
To sell shares you must proceed in the same way as for the purchase above, but selecting the Sell tab . Be careful, however, because in this case you make a short sale with CFDs (short selling) and, therefore, you go towards the payment of spreads and overnight commissions (in fact it is speculated that the value of the underlying asset decreases) . The risk and fees payable increase as the leverage applied increases. Read more here .
Commissions and taxes
On eToro there are no commissions or spreads on the purchase of shares or EFTs but, as also mentioned during the tutorial, there are cases in which you have to pay commissions. For example, for trading with CFDs you pay spreads and overnight commissions ; on cryptocurrencies only the spread is applied , while on CopyPortfolios and CopyTraders , any commissions provided for by the individual assets contained in them are paid .
The deposits are free , your withdrawals instead provide for a fixed fee of $ 5 . Also payable are conversion fees starting from 50 pips (percentage in point, i.e. the change in the exchange rate of a currency pair in the foreign exchange markets), which are payable when making withdrawals and deposits in currencies other than the dollar. American.
Finally, if 12 months go by without eToro login activity, you have to pay inactivity fees of $ 10 / month for inactivity on any remaining available balance (no open positions will be closed to cover the fee). In any case, it is possible to close your eToro account by going to the Settings (you must first check that all open positions have been closed and that available funds over $ 25 have been withdrawn). Read more here .
As regards taxation , in Italy it is necessary to declare the eToro account to the tax authorities (as a foreign account) through the RW part and attaching the account statement (downloadable directly from eToro) to the Single Tax Debt Certificate. You pay 26% tax on any capital gains and 2 per thousand for IVAFE (which is equivalent to stamp duty). In any case, it is advisable to consult your accountant to avoid mistakes. Read more here .
For more information
You should now have a pretty clear idea of how to buy shares on eToro. To learn more about the other aspects of the service, I invite you to read my guides on how eToro works , how to trade online using eToro and how to buy Bitcoin on eToro and I invite you to take a “leap” to the official eToro help center where you can find all the answers to the most frequently asked questions about the service and dozens of informative articles regarding its main functions.
Finally, if you need to get in touch with an operator, please note that you can open a ticket on this page and that you can contact the eToro live chat service , both available from Monday to Friday 24 hours a day.