Social trading brokerage and platform provider eToro announced a major update to the principles of its Popular Investor Program. The changes apply to traders who want to share their signals with other clients of the company.
The new requirements are associated with a minimum deposit, average monthly equity, number of copiers, Amount Under Management (AUM) and risk levels. AUM refers to the amount of copiers’ funds allocated to social trading, including the loss and profit of any open transactions, reported daily in eToro’s systems.
Traders who provide copy signals wishing to advance to the next level – for example from ‘Champion’ to ‘Elite’ – must meet all of the above described requirements. For example, if an investor exceeds the maximum AUM for its rank, he will be obliged to have the right deposit and a certain amount of copiers.
ACY Securities Supports ASIC’s Product Intervention OrderGo to article >>
Regarding the changes, eToro users will not be able to copy ‘Social Traders’ who have not made their first deposit, ‘Popular Investors’ not meeting the requirements of a minimum level of equity, ‘Champions’ without the consent obtained from the ‘Popular Investor Team’ and people above the maximum level of risk. For social traders it is set at 7, while for ‘Popular Investors’ at 6.
In special cases, eToro reserves the right to close the copied transactions, which will take place only in the eventuality of hazard behavior presented by trader. This refers to lack of the activity, and involvement in trade with a high level of risk. In the event of copied position closure, eToro returns the funds to the account at the market price of the day.
As the official press release states, these changes have been implemented in order to create an optimal trading experience for people copying signals and for traders who generate them. This is another change in the functioning of company’s social trading services this year. Previously, eToro extended its offering, adding copy dividends, enabling investors to benefit from the profits generated by the traders that they are following by copying them in real time.