eToro courts Russian, Chinese currency traders, and investors

The world’s largest social investment platform, created by Israeli brothers, now open to rubles and yuan

Screenshot of the eToro OpenBook platform (Photo credit: Courtesy)
Screenshot of the eToro OpenBook platform (Photo credit: Courtesy)

A month after it began offering traders the opportunity to invest in currency futures for the Russian ruble and Chinese yuan, social investing platform eToro is reportedly set to accept investments from Russia’s Sberbank and China’s Ping An investment firm – both of which have recently invested in a number of Israeli ventures. None of the organizations involved have commented on the report, which first appeared in The Wall Street Journal last week.

eToro, created by Israeli brothers Yoni and Ronen Assia, is today a global corporation with offices in New York, Australia, India, and Cyprus, as well as in Tel Aviv. Called by some “Israel’s biggest export,” eToro boasts millions of users in over 80 countries. “We’re now the largest social investment network in the world,” Yoni Assia told The Times of Israel in a recent interview. “We’re proud of having built a big international company that caters to people from all over the world.”

eToro is one of a number of new social investing platforms that rely on the “wisdom of crowds” to dispense advice and guidance to users. eToro’s specialty is foreign currency trading, with users flipping dollars for euros for pounds for yen, and so on. Users can see the recent trades made on the platform, and how successful or unsuccessful each position was.

eToro’s main feature is its “OpenBook Network,” which lets users see what trades other users are making and how they are ranked. But the most innovative aspect of the platform is that it allows users to “copy” trades made by successful traders. So if you like the trading style of a successful user, you can copy those trades to your own account and activate the same ones. You’re allowed to invest 20% of your funds (real or virtual; you get $10,000 in online money to practice when you open an account) in this manner.

Of course, copying the moves of others can be risky if you don’t know their strategy or long term plan. But it’s a good way to learn the system, and to learn about forex trading in general, said Assia. “Our tools, including copying, have simplified the world of trading an investing for users, making it global and connected,” Assia added.

Now, eToro is bringing that trading technology to “a few of the most volatile instruments in the currencies market,” the company announced in October. “For those of you who like to follow global changes, they’re a dream come true. Not only are these currencies just about as volatile as it gets, but the governments that are behind these currencies are taking an active part in changing the world as we know it. China is becoming one of the economically strongest nations on Earth, while Russia is rising to prominence in the financial sector and remains one of the world’s most powerful resource holders,” the company said.

It’s not clear if the announcement is connected to the prospective investments the site is rumored to be getting, but both the Russian bank and Chinese investment firm have been shopping around for investments in Israel. Officials from Sberbank, with 80 million customers in Russia and Eastern Europe, were in Israel recently speaking to cyber-security firms. In an interview, Mircea Mihaescu, the head of IT strategy at Sberbank, said that his bank had partnered with several Israeli tech security firms to eliminate some of the headaches involved in ensuring that accounts remained secure. Meanwhile, Ping-An, one of China’s largest insurance companies, recently invested along with web services provider Baidu and software company Qihoo360 in a new investment fund sponsored by Israel’s Carmel Ventures.

The expansion into Russian and Chinese currencies is a natural one for eToro; that an Israeli company has been able to make it as a worldwide platform, with customers in over 80 countries (including many Arab countries), is a sign that eToro is on the right track, providing useful tools for the average investor, helping them to improve their lives, said Assia. “We believe we have the potential to get to hundreds of millions of people. Our site is just the beginning of the online social finance revolution.”

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