Nigel has been in the regulated financial services industry for nearly a decade, has previously owned a financial brokerage and has written many times for sites relating to personal finance and trading.
When it comes to dividends, eToro is a one-stop-shop for aspiring and seasoned traders alike. With a robust dividends payment system and unique features not found anywhere else, eToro makes it easy to profit and prosper from dividend trading.
In this guide, we’ll take a look at:
Before we get started take a look at our other eToro guides:
Yes, eToro pays dividends on a range of instruments including Stocks, ETFs, Real Assets and Indices that pay a dividend. Unlike most brokers, eToro also pays dividends on CFDs. Dividends are paid into or removed from your account balance depending on the position you hold.
A quick note on Real Assets – Dividends are only paid on Non-leveraged ‘Buy' positions for Stocks, ETFs & cryptocurrencies.
The way eToro pays dividends depends on the positions you hold in:
CFDs – If you hold a CFD position, you will receive a dividend on the ex-dividend date (Date of Record) that will be shown in your available balance.
Real Assets – To receive a dividend payment, you must have held the position before the market closes two days before the ex-dividend date (Date of Record).
eToro dividends are usually paid out overnight. They are calculated automatically as refunds and then added to your profits. In case you had eToro fees from holding the stock, the refunds will reduce the accrued fees.
With eToro you can earn dividends on a wide range of financial instruments including stocks, ETFs and even CFDs. You can get started for just $200, or for free with a demo account.
If you're already trading with eToro, you'll be familiar with its unique Copy Trading platform. If not, Copy Trading – as the name implies – lets you copy your favourite trader's moves and portfolio. Every position they hold and trade that they make will automatically happen in your portfolio.
Copy Dividends, on the other hand, allows you to benefit from the same profits as the traders you're mimicking. Suppose the superstar trader that you're copying has made some big profits after a couple of weeks and decides to withdraw. In that case, a proportional amount will be removed from your copycat allocation, i.e. the amount you've allocated to the trader.
Avoid copying traders who have 100% gain plus, because they are most probably employing high-risk strategies. Follow traders who are moderate risk takers with around a 30% gain, since this still gives excellent returns without much exposure to extreme risk.
In some instances, receiving a dividend payment is taxable depending on the laws of your country of residence. Withholding tax rates vary from country to country, so we recommend contacting eToro directly or speaking with a qualified tax professional.
When you trade on eToro CFDs (Contracts for difference), you have the opportunity to:
eToro is an exception in the broker world as most other brokers don’t offer dividends on CFDs. Using the Dividend Calendar and Leverage, the following steps will help you extract profit from your eToro dividends:
An important point to note is that you should always refrain from purchasing stock when the market is in a downtrend. To predict whether the price of a stock will go up or down the next day, use short-term technical analysis.
Outside of Copy Trading, the ‘Popular Investors’ programme is another unique eToro feature. It gives rewards to users based on the number of trade copiers they have in the form of monthly commissions (up to $10,000 per month). With these tools available, little or no financial knowledge is needed to get started with an eToro demo account.
If the trader you are copying withdraws funds, the proportional amount will be removed from your copy allocation and sent back to your account balance. This amount is called the Copy Dividend.
Yes. eToro operates following FCA, CySEC and ASIC regulations, meaning that there are measures in place to protect investors.
You can live off dividends in retirement, but you’ll need to either start investing early or choose safe, high-yield stocks that cover your cost of living throughout your golden years.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage . 75 % of retail investor accounts lose money when trading CFDs with this provider . You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money .