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Stake Vs Etoro – Which Platform Is Better To Trade U.S Stocks?

Do you have a hard time choosing between Stake or eToro for trading the United States markets? This post compares the two brokerage platforms and goes through everything you need to know about the platforms to make an informed decision. 

What’s eToro?

eToro is a social trading platform with more than 20 million users globally. It is based in Cyprus, Israel, and London and provides a wide range of tradable assets comprising commodities, indices, and crypto. 

 

Australian Securities and Investments Commission (ASIC) regulates eToro, making it secure for Australian retail investors. With a $0 brokerage fee, users can trade U.S. stocks on the platform with minimal capital losses. 

Do Users Own Shares On Etoro? 

Users secure some positions in eToro with real assets, while others use Contract for Differences (CFDs). eToro purchases crypto assets on your behalf and registers them in a segregated account under your name. Users holding a CFD stock position don’t own the stock. However, you can track your CFD trades as they are labelled ‘CFD’ on the tradeline. 

User Experience

This platform has various widgets that display daily stock movers and a news feed to help users stay updated on their stocks of interest. 

 

eToro boasts an extensive watchlist that highlights every stock’s main sentiment and changes, allowing you to track the stocks you follow. 

 

The platform also has a social trading feature that allows users to assess and follow other users’ stock performance to update or imitate their holdings. 

 

eToro’s club feature provides various tools and services to clients according to their membership tier to improve their experience and knowledge of different investment offerings like Copyportfolios, cryptocurrency, and stocks. 

 

eToro determines the membership according to the client’s realised equity by midnight GMT every day. The tiers are:

 

  • Diamond – $250,000
  • Platinum plus – $50,000
  • Platinum – $25,000
  • Gold – $10,000
  • Silver – $5,000

 

eToro enables you to swing trade/day trade, and it has published a trading policy for users to go through before they begin trading. 

Are My Funds Secure With eToro?

Retail investors’ funds are safe with eToro, which complies with ASIC, Cyprus Securities and Exchange Commission, and Financial Conduct Authority (FCA). Therefore, these creditable regulators will regulate the assets you invest with the platform. 

 

Users’ funds are held in top-tier banks, and the Secure Sockets Layer (SSL) safeguards their personal details. 

  

The funds are kept in segregated accounts to protect them if eToro goes bankrupt. eToro has a membership for the Investor Compensation Fund for CIFs clients. This fund is designed to compensate users when the broker can’t fulfil its financial obligations to its customers. 

What’s Stake?

This mobile and desktop trading platform provide over 6,000 varying stock and ETF alternatives for users to trade U.S. ETFs and stocks with a $0 brokerage charge. 

 

Stake was founded in Australia in 2017, and it has risen in popularity to become a powerful platform offering non-US users access to the U.S. share market. 

 

The fintech firm launched its services in Brazil, the U.K., and New Zealand in 2020. The company plans to stretch its brokerage services by including ETFs and ASX stocks soon. 

User Experience

Stakes’ platform has a great user experience for beginners. Its user interface is designed to make trading simple. Stake’s easy-to-use in-app features enable you to access your portfolio and explore investment alternatives. 

 

Stake’s homepage systematically displays users’ current holdings and overall portfolio value. This gives users insight into their loss or profit and total daily change. 

 

The platform has an integrated wall-street market review that gives users a snapshot of major index funds’ performance and trending stocks during market hours. 

 

The app also offers detailed charts for users to analyse a company’s trade volume and key metrics. 

 

You can either buy a stock at a limit, market, or stop purchase. This offers users the versatility of buying stocks with their strategy and preference.

Can I Day Trade With Stake?

Day trading is the purchasing and selling of the same stock on a single trading day. Fortunately, users can day trade with Stake. However, Stake doesn’t permit pattern day trading except if the account has a value of more than $25,000. 

 

Pattern day trading is when a user makes over 3-day trades in a rolling 5-trading day duration. Users marked as pattern day traders may be restricted from executing another day trade for ninety days. 

Are My Funds Safe With Stake?

The platform is an authorised Sanlam Private Wealth representative regulated by ASIC. 

 

Stakes’ disclaimer states that Drivewealth, its brokerage partner based in the U.S., is regulated by the U.S. Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA). 

 

If Stake becomes insolvent or shuts down, users’ accounts will stay intact with Drivewealth, and you can access your account through them directly or via another service provider. You’ll be given the notice to sell your holdings and get your cashback. 

 

If Drivewealth goes bankrupt, a court will appoint a liquidator to manage transfers where they can. If it’s not possible, FINRA federally insures Drivewealth for a maximum of 500,000 for each account.

 

Overall, your funds are well regulated, making Stake secure for you. 

What Can Users Trade With eToro and Stake?

eToro

Users can trade U.S. ETFs, Indices, Stocks, Crypto Assets, commodities, and currencies. 

Stake  

Enables you to trade up to six thousand U.S. ETFs and stocks. Users will also be able to trade ASX stocks for a low $3 brokerage fee soon. 

Is eToro Beginner-friendly? 

eToro has a user-friendly interface and features crypto trading and social copy trading. 

The platform’s fee structure is comparatively low, making it a feasible starting point for beginner investors. 

Is Stake Beginner-friendly?

Stake has an easy-going user experience for beginners, and its user interface is structured to simplify trading. 

 

The in-app features are simple to navigate and enable you to access your portfolio and explore investment alternatives. 

eToro’s Fees

This platform imposes no charges for trading ETFs and stocks. However, non-U.S clients incur a $5 withdrawal fee, and there’s also a $10 charge after one year of inactivity. 

 

eToro doesn’t impose a deposit fee. Nevertheless, they impose a currency conversion charge, which depends on the currency a user is converting from. For instance, AUD to USD is 0.5% (USD 0.50 for each AUD100 exchanged).

 

Like other CFD trading platforms, eToro imposes overnight charges, a small fee for them to lend users funds to hold assets overnight. 

 

This is dependent on what the user trades. If users trade stocks and don’t leverage them, they don’t incur overnight fees. If a user leverages stocks, eToro is lending them funds that accumulate an interest rate. 

Stake Fees

The platform imposes no charges for trading ETFs and stocks. Stake doesn’t charge monthly fees on the basic account, and it also has no inactivity fee. 

 

Stake imposes a foreign exchange (F.X.) fee for withdrawal or deposit. Below is Stake’s fee structure:

 

  • FX charge for every withdrawal/deposit: 0.70% (USD 0.70 for each AUD100 exchanged)

 

  • Express deposit (optional): There’s an extra 0.5% charge on top of the standard F.X. Charge for anything you transfer if you want your funds to arrive in your account in the next 24 hours 

 

Users can transfer USD directly to Stake to forgo the F.X. charges, which will impose a $5 flat charge. 

Bottom Line

Stake is an inexpensive and user-friendly means to invest in U.S. assets and ASX. Trading ETFs and stocks are an excellent way to diversify your portfolio without paying extravagant commissions and fees. 

 

eToro is also an excellent platform for beginners to interact with other investors, and it has a user-friendly interface to trade crypto, U.S. stocks, and other assets. 

 

The two platforms provide support, user-friendly platforms, and affordable means to currently invest in the most popular and lucrative investments. In the end, it all comes down to personal preference.

 

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