Is eToro better than XM? Who offers lower spread, better trading conditions, and is a safe broker to trade?
We provide answers to all questions in this eToro vs XM Comparison Review. For this Review, we opened real accounts and deposit over US$ 11,000 in total to compare both offerings, account opening process at eToro and XM also the fees, trading conditions, platform selection, and withdrawal process.
What is eToro and XM?
eToro is one of the largest, Best Social trading Brokers and platform with a good range of portfolios and Top number of investors.
XM is a global Forex and CFD broker, subsidiary of Trading Point Holdings. The broker allows trading with Forex pairs, indices, commodities, and stocks. It offers a vast range of products compared to competitors.
Some of the highlights of eToro vs XM are:
| eToro | XM | |
| 💻 Website | www.etoro.com | www.xm.com |
| 🛡️Founded year | 2006 | 2009 |
| 🏦 Headquarter | Israel | Limassol, Cyprus |
| 🗺️ Authorized & Regulated in | USA, UK, Australia, Cyprus | UK, Cyprus, Australia, UAE, Belize |
| 🔒 Is Broker safe | Yes | Yes |
| 💰 EUR/USD Spread | 0.97 | 1.6 |
| 💳 Minimum deposit | US$50 or US$500 | US$5 |
| 💰 Withdrawal fee | US$5 | US$0 |
| 🖥️ Trading Platform | eToro’s own trading platform | MT4, MT5 |
| 📈 Markets offered | Indices, Forex, Commodities, Stocks, Cryptocurrencies, ETFs | Forex, Indices, Stocks, Commodities |
| 📉 Number of Products | 986 | 1336 |
| 🔎 Our Detailed Review | eToro Review | XM Review |
Licenses and Regulation
The review of eToro vs XM demonstrates that both brokers are safe to trade and are not a scam. The brokers are regulated by strict rules and enforcement mechanisms. Moreover, the CySEC entity they are both regulated by guarantees compensation if the broker becomes insolvent.
eToro is licensed by some of the top global regulators, including the UK’s FCA, CySEC, ASIC, and FinCEN.
XM is licensed by 5 regulators worldwide, including the top-tier UK’s FCA, ASIC, Dubai’s DFSA, Cyprus’ CySEC, and Belize’s FSC. However, the UK’s FCA only regulates trading.com, not the XM brand, despite being operated by the same group.
For this review, we opened an account under eToro (Europe) Limited regulated by CySEC and with XM Trading Point of Financial Instruments Limited, regulated by CySEC. Check out more about CySEC.
We recommend that you register your eToro account with the eToro UK and CySEC entity and XM account with CySEC entity if they are available in your jurisdiction.
| eToro | XM | |
| 🔒 Licenses | ASIC, CySEC, IE Singapore, FCA, NFA | ASIC, CySEC, DFSA FCA, FSC |
| Top Tier License | ✔️ | ✔️ |
| Publically Traded | ❌ | ❌ |
| Compensation Scheme | ✔️ (depending on the entity) | ✔️ (depending on the entity) |
eToro vs XM Fees
eToro and XM fees are similar and mainly built into a spread basis, however, XM has commission-based accounts as well.
There are additional fees charged by eToro. It charges a few non-trading fees, The broker charges a $10 monthly fee after a year for inactive accounts. Though deposit and account maintenance are free on eToro, it charges $5 for each withdrawal.
XM does not charge any additional fee, moreover, the broker charges average fees for trading the main instruments and the fees charged on stocks and commodities are lower than industry averages.
| eToro Fees | XM Fees | |
| Fees based on the spread | ✔️ | ✔️ |
| Floating Spread | ✔️ | ✔️ |
| Fixed Spread | ❌ | ❌ |
| Commission-based fees | ❌ | ✔️ |
| Inactivity Fee | $10 | $0 |
| Deposit fee | $0 | $0 |
| Withdrawal fee | $5 | $0 |
| Active trader/ VIP Programs | ✔️ | ✔️ |
Spreads Charged in Our Trades
For our test trades on eToro vs XM accounts, we chose popular instruments in each market. We placed 3 trades for each instrument to get the average spread, we found both negative and positive sides for each Broker spreads. eToro may not be suitable for commodities and stocks traders, since the spreads are above the industry average.
eToro spreads for Indices and Forex are below the industry average. For commodities and stock CFDs, spreads are above the industry average. Cryptocurrencies in the trades are more than double the industry average.
A closer look at the spreads charged in our XM trades revealed that they were all aligned with industry benchmarks. None of XM’s average spreads were above industry averages. Moreover, the broker’s spreads on stocks and commodities were slightly lower than those of its peers.
| Markets | Instruments | eToro Avg. spread | XM Avg. spread | Industry avg. spread |
| Indices | FTSE 100 | 1.4 | 1.5 | 1.65 |
| Forex | EUR/USD | 0.97 | 1.6 | 1.16 |
| Commodities | Gold | 4.5 | 3.5 | 3.53 |
| Stocks | AAPL | 2.23 | 1.35 | 1.75 |
| Cryptocurrencies | Bitcoin | 102.71 | – | 72.81 |
| ETFs | QQQ | 0.53 | – | 0.45 |
Account Types Compared
eToro offers a single account with access to all tools and services from one account, while XM offers 5 accounts types with various fee structures, for example, the Micro, Standard, XM Zero, XM Ultra-low, and SHare accounts.
Opening a new account on eToro was very simple and easy, the registration process took merely 11 minutes.
XM account opening process was smooth and effortless, the registration process took just 15 minutes. the account was approved the next day, which was satisfying.
| eToro Accounts | XM Accounts | |
| Standard Account | ✔️ | ✔️ |
| ECN / Commission Based Account | ❌ | ❌ |
| Islamic Account | ✔️ | ✔️ |
| PAMM Account | ❌ | ✔️ |
Markets and Products
eToro is primarily a Forex and CFD broker, on top of that it offers trading services with real Stocks, ETFs, and Cryptocurrencies. XM, in its turn, offers trading multiple tradable instruments in the Forex, indices, stocks, and commodities markets. XM is better for stocks traders, as it offers a wider range of instruments than eToro. However, it doesn’t offer cryptocurrency and ETF trading.
| Markets | eToro Instruments | XM Instruments |
| Indices | 13 | 26 |
| Forex | 49 | 57 |
| Commodities | 31 | 17 |
| Stocks | 726 | 1236 |
| Cryptocurrency | 16 | – |
| ETFs | 151 | – |
| Options | – | – |
Trading Conditions
Trading conditions on eToro are fair and suitable for beginning traders, however, it does not allow scalping, while XM allows high-risk strategies such as hedging and scalping, it also allows traders to use Expert Advisors (EAs).
| Trading Method | eToro | XM |
| Hedging | ✔️ (eToro will retain the profits) | ✔️ |
| Scalping | ❌ | ✔️ |
| Change Leverage | ✔️ | ✔️ |
| Copy trading/ Social trading | ✔️ | ✔️ |
| Beginners Trading | ✔️ | ✔️ |
| Professional Trading | ✔️ | ✔️ |
Deposit and Withdrawal
Both deposit and withdrawal processes on eToro and XM are simple enough, supporting various funding methods. eToro charges a flat fee of $5 for every withdrawal, XM, on the other hand, does not charge any withdrawal fee.
We tested the deposit process on eToro using multiple payment modes and the deposits were received instantly.
The deposit methods offered by XM are instant and free. Anyway, the first deposit has to be made via credit card.
| eToro | XM | |
| 💰 Deposit Fee | ❌ | ❌ |
| 💰 Withdrawal fee | 5$ | ❌ |
| 💳 Minimum deposit | US$50 or US$500 | US$5 |
| Bank Transfer | ✔️ | ✔️ |
| Debit/ Credit Cards | ✔️ | ✔️ |
| PayPal | ✔️ | ✔️ |
| Skrill | ✔️ | ✔️ |
Trading Platform
eToro uses its trading platform and does not offer other alternatives, it looks modern and is easy to use. XM offers popular MetaTrader4 and MetaTrader5 platforms to its clients and does not have a proprietary platform.
eToro is known for its social trading feature. In fact, it gained popularity because of this. It basically has two features: CopyTrader and CopyPortfolio.
We think that the XM MT4 platform is a bit outdated, and find the MT5 platform more adequate and suitable for traders preferring modern platform.
| eToro Platform | XM Platform | |
| Proprietary Platform | ✔️ | ❌ |
| Web Platform | ✔️ | ✔️ |
| Desktop Platform | ❌ | ✔️ |
| Mobile App | ✔️ | ✔️ |
| Alternative Platforms | ❌ | ✔️ |
| MetaTrader4 | ❌ | ✔️ |
| Simple to use platform | ✔️ | ✔️ |
| Demo Account Trading | ✔️ | ✔️ |
| Execution Agency Model | ❌ | ❌ |
| Research | ✔️ | ✔️ |
| Advanced Research tools | ❌ | ✔️ |
Education and Support
eToro does not offer high-quality education resources, while XM offers excellent learning courses under its Tradepedia educational platform that provides in-depth guides to the market. eToro and XM both offer decent customer support with Live Chat and support inquiries. To explore more educational materials, we might recommend XM, as it’s rich with in-depth articles, guides, and courses on trading.
We found that eToro is developing its learning materials for beginners and has established eToro Trading School.
XM runs over 40 webinars weekly in different languages that its clients can join and learn about the markets. The webinars are based on experience level and take place in different timezones to suit its clients.
| eToro Support | XM Support | |
| Trading School for Beginners | ✔️ | ✔️ |
| Tutorials | ✔️ | ✔️ |
| Trading Videos | ❌ | ❌ |
| Webinars | ✔️ | ✔️ |
| Daily News and Analysis | ✔️ | ✔️ |
| Economic Calendar | ✔️ | ✔️ |
| Live Chat | ✔️ | ✔️ |
| Email Support | ✔️ | ✔️ |
| 24/7 availability | ❌ | ❌ |
Conclusion on eToro vs XM
From our detailed comparison review of eToro vs XM, we may come to the point that both brokers are safe and completely reliable. They both offer a vast range of instruments and are easy to use.
Both eToro and XM trading costs are based on spreads, however, XM does have a separate commission-based fee account. All XM spreads are aligned with those of the industry average and is better for stocks traders since it offers a wide range of stock trading instruments.
Our trading experience on the eToro platform was smooth. eToro is good for beginners and experienced/popular traders, it has some attractive features like social trading and is best for the number of Top Traders.
Overall, our experience with XM was smooth and quick. We did not face any issue with account opening, deposit, withdrawal, and trading processes. We recommend XM to traders who prefer using MT4/MT5 platforms for trading and to those who run EAs due to the free VPS services.
| eToro | XM | |
| Recommended for | ✔️ Best for Social Trading ✔️ Beginning Traders ✔️ Trading Currency Pairs ✔️ Cryptocurrency Trading ✔️ Stocks Trading | ✔️ CFD Stocks trading ✔️ Beginning Traders ✔️ Experienced traders ✔️ Trading Currency Pairs ✔️ EAs trading ✔️ Scalping trader ✔️ Hedging trader ✔️ Trading through MT4 / MT5 |
| Might not be fit for | ❌ Scalping trader ❌ Hedging trader ❌ EA trader ❌ Trading through MT4/MT5 platform only ❌ Commission-based trading | ❌ Commission-based trading ❌ Real Stock / Futures Trading |