Asia head of eToro on social trading and Southeast Asia plans

Trading is difficult. Studies have shown that 80% of all day traders quit within the first two years, and only 1% are able to profit. Successful trading requires a good grasp of knowledge about the market. An educated trader needs to understand the importance of developing an efficient trading plan, analyze changes in the market, and know how current affairs might affect financial movements.

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However, it takes time to build up a pool of expertise and learn how to apply these skills in the real world. This is the concept behind eToro, an online “social trading” platform that acts as a social network for traders to share and learn about trading strategies.

Founded in 2007, the platform today has 11 million users across 140 countries. It has registered offices in Cyprus, London, the UK, Australia, China, and the US. EToro has raised a total of US$222.7 million in funding over 10 rounds and has hit an US$800 million valuation in March 2018, according to Reuters.

The Asian market is expected to add up to 30% of the company’s total revenue for 2019, as the online broker firm is expanding its trading services in markets such as Malaysia, Vietnam, the Philippines, and Thailand. EToro counts within its investors Chinese investment company China Minsheng Financial and insurance giant Ping An, among others.

KrAsia recently caught up with eToro Asia’s managing director, Jasper Lee, to learn more about the company’s product and long-term plans regarding Southeast Asia. Prior to joining eToro in 2016, Lee spent eight years at FXCM, a retail forex brokerage where he was also general manager.

What is eToro?

EToro is a social trading network. It was founded with the intention to open up the market for everyone to trade freely and openly. We offer multiple asset classes that users can trade in, including stocks, estates, commodities, and cryptocurrencies. Our platform helps a beginner trader to trade, as well as any experienced trader, by relying on the collective wisdom of the trading community. EToro can help traders achieve higher profitability in a short time, reducing the learning curve they would’ve had if they were to pick up trading by themselves.

Can you share more about eToro’s copy trading function?

EToro’s social and copy trading function is what we call the “social media of trading.” Basically, what we do here is create a platform where traders can share and learn about investing. It works just like any other social media that we use daily, whether it is Facebook or Twitter. For instance, if you think an investor’s portfolio and strategy makes sense to you and is profitable, you can “copy” it. You choose the “copy” option, and eToro will invest your money as per the investor’s strategy.

On top of the copying function, users on eToro’s social trading platform can also share their knowledge, like a piece of news they saw or an analysis they happen to have read. Users can even comment on these posts. It is basically a social media platform by traders for traders.

Who are the main users of eToro’s social trading platform?

We have two main groups of users – the copier and the one being copied. The copiers are usually new traders who have recently picked up trading but lack the depth of industry knowledge and want to learn from more experienced traders. Whereas, those being copied are experienced traders. They aren’t high-end trading gurus or hedge fund managers per se, but these traders have years of experience. These traders use eToro’s platform to gain exposure, as well as to get their name out and be noticed.

How does eToro generate profit?