I’m currently working in Germany and using eToro to invest. I want to buy an S&P 500 ETF, but I noticed that eToro shows leverage options when I go to purchase the ETF. If I buy the S&P 500 ETF with 1x leverage on eToro, will I still be charged an overnight fee? I want to make sure I understand any associated fees before investing. If anyone has experience buying ETFs on eToro from Europe, I would really appreciate your insights.
Hi,
Thanks for your message. I’m also using eToro and can share some insights. When you buy an S&P 500 ETF on eToro with 1x leverage, you are buying the S&P 500 with no leverage. Please note that due to EU regulation, eToro provides SPY assets as a CFD and that’s why there is this 1x leverage (EU regulation doesn’t allow EU brokers to provide US-listed ETFs). In this case, you won’t be charged overnight fees because you’re not engaging in leveraged trading or holding a CFD position.
Overnight fees (also known as rollover fees) typically apply to leveraged positions or CFDs, where you’re borrowing money to increase your position size. Since you’re buying the ETF outright without leverage, you should only be concerned with any applicable spread or transaction fees.
Hope this helps!
Best wishes,
Andris