What do I purchase when I buy stocks on eToro?
Please note that some of the assets on the eToro platform are traded as real assets, while others use CFDs. CFD stands for Contract for Difference.
All non-leveraged “buy” positions for ETFs, cryptocurrencies and stocks (starting in 2018) are traded as real assets. Commodities, indices and currencies are traded using CFDs.
CFDs are specialized and popular Over The Counter (OTC) financial products that allow traders to easily take broad market positions in a variety of different financial markets.
This means that when you close your position, eToro will pay you the amount representing the difference between your BUY and SELL price for each stock.
It also means that we are obligated to follow price movements, and look at our client’s P&L according to what really happened in the market on the same instrument which allows trading indices, commodities and other instruments without actually buying all the underlying asset.
Keep in mind that you do not actually own the stocks or hold any rights shareholders have.
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