eToro expands US presences with launch of options trading

abdelaziz Fathi

Social investment platform eToro said it would allow its US customers to trade options at no cost, ramping up the intensity of the brokers’ fight to eliminate trading commissions.

The Israel-based firm says the launch will diversify its offering to US users, which is currently focused on stocks, exchange traded funds (ETFs) and cryptocurrency.

eToro, which is operating into a market dominated by both established players and high-flying apps, said more of its core products will soon be available for American customers.

“The modern investor wants to interact with the market in more ways and under all conditions, while still feeling empowered in their investing choices. With the addition of options trading, eToro is furthering our mission to democratize access to the tools that can help people reach their financial goals,” said Lule Demmissie, eToro’s U.S. CEO.

Scaling eToro’s US business comes shortly after the firm secured the regulatory nod to acquire options trading app Gatsby for around $50 million. Co-founded by Jeff Myers and Ryan Belanger-Saleh in 2018, Gatsby is a commission-free options and stock-trading app aimed at younger traders.

Gatsby focuses on a younger demographic to give people “a safe and fair platform to trade on without users having to worry about getting in over their heads or being shut out of names when volatility spikes.”

Gatsby builds upon two open source JavaScript projects for website and web app development. The app launched into iOS and Android in early 2020. Since then, it has seen the number of signups doubling on a yearly basis amid a spike in trade volume with cannabis and meme stocks ranking among its most popular assets.

eToro has already secured a soft launch for its crypto services in the US in 2019, then no-fee stock trading in 2020, but despite its vast experience in the trading space, it was aware of the regulatory headwinds that come with expanding into mainstream assets classes.

eToro’s cryptocurrency offering allows US investors to access crypto markets through direct investing in underlying coins, as well copying the trades of other traders, and thirdly by investing in a diversified portfolio of major crypto assets though its product Crypto Copyfund.

eToro was in the news recently after it laid off 100 employees, half of them in Israel. This number represents around 6% of the company’s total workforce. At the same time as announcing the cuts, eToro abandoned its plans to go public at an eye-catching $10 billion valuation after it canceled its SPAC deal with Betsy Cohen-backed blank-check firm.

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