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In their official website (in a pdf fees document), the equation they mentioned does not match reality (depending on my practice with their demo trading account), nor logic.

My equation is: spread fee = (ask-bid) * number of units

in their pdf file : spread fee = (ask-bid) * number of units * the share price

so If I want to buy one Amazon share (which was 4000 $ ; ask: 4007, bid: 4000) I assume I would pay 7 * 1 = 7 $ not 7 * 1 * 4000 = 28000 $

Is there an unintended mistake in their attached commission file?

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  • is it possible that they express bid-ask spread in percent (or bp) rather than cents? Also, since you buy at the ask and sell at the bid, I'd expect to pay only half the bid-ask spread, when compared to mid.
    – 0xFEE1DEAD
    Apr 27, 2021 at 17:39
  • you are correct, that's what I was wrong at. Thank you very much.
    – huab
    Apr 28, 2021 at 11:04
  • An interesting point, is "eToro" such a scam that questions about it actually should not be allowed on the site?
    – Fattie
    Apr 28, 2021 at 13:14
  • 4
    @Fattie maybe you could stop calling everything and anything a "scam"...
    – 0xFEE1DEAD
    Apr 28, 2021 at 13:42
  • This question might be better suited to Cryptocurrency SE.
    – Ellie Kesselman
    May 22, 2021 at 4:33

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I don't see where they're defining the formula as (ask-bid) * number of units * the share price, I see it defined as rate * units * price. If you look at their example, they list a "typical spread rate" of 0.18% for AAPL, which is what they're using in their formula.

In other words, they add 0.18% to the ask price as a commission (broker's fee, whatever you want to call it).

If I want to buy one Amazon share (which was 4000 $ ; ask: 4007, bid: 4000) I assume I would pay 7 * 1 = 7 $ not 7 * 1 * 4000 = 28000 $

No, you'd pay 0.18% (from their example) * 1 * 4007 = 7.21 in spread fees in addition to the ask price and other fees (overnight, etc.)

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