In the world of online discount brokers, Robinhood and eToro have emerged as prominent platforms offering access to trading without excessive fees. Both brokers prioritize simplicity and self-directed investing, leveraging innovative technology. While they share commonalities, important differences exist between Robinhood and eToro, ranging from transparency and research tools to fees and offerings. This article aims to delve deeper into these two platforms to help readers determine which one aligns better with their portfolio needs.
Both Robinhood and eToro provide streamlined platforms, making it easy for investors of any experience level to access information. With website and mobile app platforms, Robinhood's layouts are consistent across devices. The broker has partnered with NASDAQ to offer real-time streaming stock quotes. eToro, on the other hand, offers customizable advanced charts, technical studies, drawing tools, and features like Smart Portfolios and CopyTrader. Overall, eToro offers a more robust user experience in terms of platform features.
In terms of desktop experience, eToro outshines Robinhood with its screening, trading journal, access to proprietary research, and international exchanges. Notably, eToro's One-Click Trading feature enables quick position openings with preset parameters. When it comes to mobile experience, both platforms cater well to new and passive investors, but eToro's mobile platform provides more tools for active traders.
Range of Offerings:
While Robinhood offers stocks, ETFs, options, cryptocurrencies, fractional shares trading, and a dividend reinvestment plan, eToro extends its offerings to include limited fractional share trading, eToro Money account, and automated investing through Smart Portfolios. eToro's diverse offerings cater better to advanced traders, giving it an advantage in this category.
Robinhood offers a range of order types based on asset classes, while eToro provides basic order types along with One-Click Trading, allowing users to trade with predetermined factors. Robinhood has a slight edge in terms of order options.
Both platforms strive to provide improved trading tools. Robinhood has introduced advanced charting tools, while eToro offers CopyTrade and Smart Portfolios. Robinhood publicly discloses its order execution quality statistics, while eToro's order routing and payment for order flow (PFOF) are handled by Apex Clearing. Both platforms offer dividend reinvestment plans and fractional share trading.
Both Robinhood and eToro offer commission-free stocks, options, and ETFs. However, eToro charges a 1% commission for cryptocurrencies. Robinhood provides more cost savings, particularly with its margin rate and Robinhood Gold subscription.
In terms of research tools, both platforms lag behind compared to other brokers. Robinhood charges fees for third-party research, while eToro offers free proprietary and third-party research. eToro also provides a screener feature, giving it an advantage in this category.
Both Robinhood and eToro offer limited portfolio analysis tools, including portfolio tracking and reports. Neither platform offers backtesting strategy features, resulting in a tie in this category.
eToro's educational platform, eToro Academy, offers a range of financial topics and insight into trading tools. Robinhood provides educational resources through Robinhood Learn, offering articles, videos, and in-app course modules. eToro Academy's advantage in catering to both new and advanced investors makes it the winner in this category.
Both platforms have limited direct access to customer service, with support channels available primarily to existing customers. Neither platform excels in providing immediate help to customers or non-customers.
While both platforms have limitations in terms of customer service, eToro provides a more comprehensive Help Center with extensive FAQs, tutorials, and guides. Robinhood offers limited phone and email support, while eToro provides 24/5 customer support via email and live chat. eToro's availability and accessible support options give it an edge in this category.
Regulation and Security:
Both Robinhood and eToro are regulated by financial authorities. Robinhood operates in the United States and is a member of FINRA and SIPC, providing investor protection. eToro operates in multiple countries and is regulated by various authorities, including the Financial Conduct Authority (FCA) in the UK and the Cyprus Securities and Exchange Commission (CySEC). Both platforms prioritize the security of user funds and employ encryption and authentication protocols.
eToro distinguishes itself by offering a social trading platform where users can interact, follow, and copy the trades of other traders. This unique feature allows beginners to learn from experienced traders and potentially replicate their success. Robinhood does not offer a similar social trading feature.
Both Robinhood and eToro offer user-friendly platforms with streamlined interfaces, making them suitable for new and experienced investors. While Robinhood focuses on simplicity and accessibility, eToro offers a more comprehensive set of features, making it suitable for both passive and active traders. eToro's advanced charting tools, social trading, and diverse offerings provide an edge for experienced traders. On the other hand, Robinhood's cost savings, transparent order execution statistics, and intuitive design appeal to beginners and those looking for a straightforward trading experience. Ultimately, the choice between Robinhood and eToro depends on an individual's trading preferences, goals, and level of experience.