There are hundreds of different financial assets to trade on eToro, across several categories: commodities, cryptoassets, currencies, indices and ETFs. Each asset class has its own characteristics, and can be traded using a variety of investment strategies. Some positions on eToro involve ownership of underlying assets, such as long (BUY), non-leveraged positions on stocks and cryptos. Other employ CFDs, which enable a variety of options, such as leveraged trades, short (SELL) positions, fractional ownership and more.
The stock market is dynamic and presents many options for traders. Stocks are usually considered suitable for medium- to long-term investments. Each stock is affected by different market events and could go up or down in value following announcements such as earnings reports, new product launches, and changes in competitors’ stock prices.
For example, if a smartphone manufacturer receives negative press following a malfunction in one of its product series, it is possible that its direct competitors’ share prices will rise. Companies which make profits, often share dividends with their shareholders at a fixed payment per share.
Buying a stock on eToro by opening a BUY (long), non-leveraged position, means you are investing in the underlying asset*, and the stock is purchased and held in your name.
However, eToro also offers additional functions using CFD trading. With CFDs, you can open SELL (short) positions, use leverage, and buy fractional shares. For example, on eToro you can invest as little as $100 in a stock that actually costs $500.
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