eToro, an Israel-based social trading network, has reduced the amount of leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term permitted on new trading positions in the banking sector to a maximum of X1. The online trading platform disclosed this on Tuesday in a notice sent to its clients, citing "current situation."

The update comes days after the collapse of Silicon Valley Bank (SVB), a US-based lender targeted at early-stage early companies, sent shockwaves across the US and global financial industry. Another US bank, Signature Bank, was abruptly shut down by regulators as a result of the development. In addition, two days before SVB's collapse, crypto-friendly Silvergate Bank wound down its banking operations and voluntarily liquidated its assets in an “orderly manner.”

These developments cast a shadow on US bank shares, with the stock price of First Republic Bank plummeting over 60% on Monday. However, in the notice eToro pointed out that the leverage restriction will only affect future positions as existing positions will be maintained.

SVB Crisis Pushes eToro to Axe Leverage

eToro, which operates in 140 countries including in Cyprus, the UK, the United State and Australia, enables customers to trade in stocks, commodities currencies and contracts for difference. On its platform, eToro enables its clients to trade the stocks of US banks, such as Bank of America, Citi, Goldman Sachs and JPMorgan Chase & Co, among other global banks.

However, the development in the US has forced the network to impose restrictions on leverage positions in the industry. “The restriction will remain in place until our risk management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term criteria allows us to enable additional leverage,” the social trading network noted.

Meanwhile, eToro has been expanding the portfolio of stocks available to its clients. In late January, the company in partnership with UK startup Bridgeweave flagged off ‘InvestorAI-US,’ a new smart portfolio that uses artificial intelligence (AI) to provide retail investors with exposure to the stocks of 12 high-growth US companies. Moreover, the company recently launched SocialSentiment, a new portfolio that offers retail investors exposure to US-listed companies known for their solid environmental, social and governance (ESG) efforts.