How to buy SPDR S&P 500 ETF (SPY) on eToro?
- eToro is one of the most popular platforms for investing online
- eToro offers users the ability to trade stocks, commodities, ETFs, cryptocurrencies and more
- This step by step guide will show you how to buy SPDR S&P 500 ETF shares on eToro
With the rise of online brokers, it’s easier than ever to invest in the SPDR S&P 500 ETF (SPY) and other leading ETFs. If you have been thinking about investing in SPY and looking for different brokers online, you have probably discovered that you can buy SPY ETF on eToro.
Create an eToro account
eToro was established in 2007 and has since grown into one of the most popular brokers for online trading and investing. Etoro has over 10 million registered users and is regulated in Cyprus, Australia and the UK. Besides giving users the ability to buy and sell commodities, stocks, and other instruments, their platform actually provides a diverse range of other trading products. Let’s take a quick look at a list of the defining features of eToro:
- Trade commodities, stocks and other traditional financial instruments
- Trade cryptocurrencies
- Copy the portfolios of successful traders
- Test trading strategies with demo trading
- Trading with leverage
Now let’s take a look at the main advantages and disadvantages of trading on eToro:
- Large selection of assets available for trading
- Social trading features
- Demo trading support
- Forex trading fees are relatively high
- Withdrawal and inactivity fees
What is an ETF?
Exchange-traded funds (ETFs) are instruments that allow you to invest in a basket of different securities. ETFs are traded on the stock exchange and have gained tremendous popularity as an inexpensive alternative to mutual funds. More often than not, ETFs are designed to match the performance of indices such as the S&P 500.
For example, an ETF based on the S&P 500 index will hold a pool of stocks aligned with the makeup of the S&P 500 and give investors the option of buying a stock from that pool. ETFs are a profitable method to diversify your investment through a single instrument.
The ETF industry has become much more complex since the first ETF, the S&P 500 SPDR, was introduced to the market in 1993. For example, companies now also offer reverse ETFs, designed to generate profits when prices of the underlying assets fall. These reverse ETFs, which often include “Short” or “Bear” in their SPDR S&P 500 ETF, generally have higher fees because they are more complex to maintain. Inverted ETFs should be invested with caution and are best suited for experienced investors.
Another type of ETF is a leveraged ETF that is best suited for short-term investments made by professionals and experienced investors. These ETFs use various methods such as financial derivatives and debt to gain leveraged exposure, typically 2: 1 or 3: 1 leverage. These ETFs are designed to provide amplified returns compared to investing in an unleveraged ETF, but they are also much riskier and lead to greater losses if the market moves against the investor.
ETFs are not only used to invest in stocks, but they can also be used to invest in commodities, bonds, currencies and other types of investments.
Buy SPDR S&P 500 ETF in 4 easy steps on eToro
The SPDR S&P 500 ETF, commonly referred to by its symbol SPY, is an exchange-traded fund issued by State Street Global Advisors. SPY is designed to track the very popular S&P 500 Index, which represents the performance of large cap companies based in the United States. SPY is an extremely popular investment vehicle and the largest ETF in the world. SPY is very cheap to own because the fund only has an expense ratio of 0.09% – owning SPY will cost you less than $ 1 in annual fees for every $ 1,000 invested. SPY is structured as a Unit Investment Trust (ITU).
Now let’s get started – here is our step by step guide on how to buy SPY ETF on eToro.
1. Create an eToro account
Creating an eToro account is very easy and you will be able to log into your newly created eToro account within minutes.
If you just want to take a look at what the eToro platform has to offer, the only information required to create an account is an email and phone number. However, if you want to deposit money and start trading, you will need to provide additional personal information to verify your identity.
2. Complete your eToro profile
After creating your eToro account, you will need to complete your eToro profile before you can start trading. This information is necessary for eToro to comply with applicable AML and CTF regulations. Click “Full Profile” under your userSPDR S&P 500 ETF and follow the steps presented.
3. Fund your eToro account
After completing the necessary verification, you can fund your eToro account.
The minimum deposit currently accepted by eToro is $ 200, or the equivalent in other currencies. The platform actually offers seven different deposit methods, so choose the one that works best for you:
- Credit / debit card
- Pay Pal
- Bank transfer
As with any investment, don’t invest more than what you are prepared to lose.
TRICK: If you don’t feel ready to trade for real money yet, you can use eToro’s virtual wallet feature to test out some risk-free trading strategies. You can switch from your real wallet to your virtual wallet by clicking on the icon under your profile name. You will receive $ 100,000 in virtual money which you can use to trade any instrument offered by eToro.
4. You are ready to buy the SPY ETF on eToro
Once your account is funded, you can start trading commodities on eToro. You can either buy a commodity or sell it short, depending on how you think the market is going to behave in the future. In this guide, we are going to show a step by step process of purchasing SPY on eToro.
Go to the search bar at the top of the eToro interface and enter the SPDR S&P 500 ETF or the SPY of the asset you wish to buy, in this case the SPDR S&P 500 ETF. In addition to the price table, you will also be able to find other key information about the ETF.
Click the “Redeem” button to place your order for SPY. Now a window will open where we can modify all the parameters of our trade. In this example, we are going to invest $ 1,000.
By switching between “Market” and “Rate” you can either buy the SPY on eToro at the best price currently available or specify the exact price at which you want to buy the ETF. We will keep it on “Market” because it is the fastest and easiest way.
Under “Amount” we will set the amount we want to invest – in this case, $ 1,000. Below we can see what percentage of our total equity we are using.
After clicking on “Open Trade” your order will be submitted and your trade should be completed shortly.
5. Monitor the performance of your SPY investment
Once your order is complete, you will be able to follow the status of your transaction in the “Wallet” section. Here you can also update your stop loss and take profit levels if you are not happy with the previously set levels.
If you want to exit the trade, click the X icon on the right
What is copy trading on eToro?
eToro promotes itself as a “social trading” platform, and these social features give eToro a unique dimension compared to most other online trading platforms. EToro’s Trade Copy feature allows you to copy trades made by other eToro users.
You can access this functionality by going to the “Copy people” section in the navigation bar. The different traders you can copy are sorted by risk level, so you can choose the risk level of a trading strategy that you are comfortable with.
For each trader, you can see detailed statistics about their performance during a selected trading period and the changes they have made to their portfolio. You can copy up to 100 different traders at a time. The minimum amount you can invest in a single trader is $ 200.
Trade on eToro
Of course, eToro offers many other trading instruments besides SPY. The company offers around 800 different stocks listed on various global stock exchanges. Here are some examples of assets you can buy on eToro:
The basics on buying SPY ETF on eToro
If you want to trade the SPDR S&P 500 ETF through an online platform, eToro is definitely worth a look. The platform offers a full suite of features while providing an intuitive and beginner-friendly user interface at the same time. Not only does the platform allow you to trade traditional financial instruments like stocks, ETFs, and indices, but you can also trade cryptocurrencies on eToro.
The trading copy feature is also ideal for users who want to invest in a diversified equity portfolio, but prefer to leave the exact composition of the portfolio to a more experienced investor.
Trade SPY ETF on eToro