Good news for those who own a trading account with eToro. In fact, starting from 1st November 2020, all eToro clients will benefit from an additional insurance policy, which will protect each user up to a maximum of 1 million euros. The insurance will also apply for all the new users.
How it works
Every investor who has an eToro account has always been protected by the European investor compensation scheme (find out more about eToro account security). In the event of the broker’s insolvency problems, each client is insured up to a maximum of 20.000 euros.
This maximum level of protection of €20.000 represented an obstacle to anyone who wanted to trade with higher figures. In the event of eToro’s default, there would have been a potential risk of insolvency.
With this new insurance policy taken out with Lloyd’s of London, each customer is potentially protected up to 1 million euros. The object of the protection is the liquidity of the clients and the financial products held by them on the eToro platform: CFDs, shares, and ETFs. Real cryptocurrencies purchased on eToro and held in the wallet are not included in the insurance.
The policy covers the losses due to the occurrence of several scenarios: eToro’s unlikely bankruptcy declaration; the misconduct of eToro or its employees causing financial loss to the customer; and the theft of financial instruments.
If at least one of these events occurs, each customer can request compensation up to a maximum of 1 million euros. It can be done just by filling out an online form that will be sent directly to Lloyd's.
Needless to say, the policy does not cover losses arising from trading activities, or rather those losses due to negative fluctuations in the financial products owned by customers.
The new eToro insurance policy does not have an expiration date and it is free for all clients (even the new ones).
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
Past performance is not an indication of future results. Trading history presented is less than 5 complete years and may not suffice as basis for investment decision.
Copy Trading does not amount to investment advice. The value of your investments may go up or down. Your capital is at risk.
Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.
eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.
