eToro’s CopyTrading & CopyFunds, are they same?

CopyTrading and CopyFunds are similar in many ways, but they are not exactly the same as most people suspect it to be.

I know this can be confusing, but before you make any mistake, I’m here to guide you through both of the amazing investment products from eToro.

CopyTrading

CopyTrading allows traders at eToro to choose any trader that they think is worthy of copying. Then the tradergets the same percentage of profit as the copied trader.

For example, if a trader, say Adam thinks, say John’s trading feats and strategy is worth going for, Adam can copy John’s trading. Say Adam is trading with $1,000 and if John gets 10% profit, Adam will get 10% of his $1,000. This means the percentage of profit stays constant for both the copied trader and copying trader. But the amount differs based on how much Adam or a copying trader trades on John’s or another copied trader’s profile.

CopyFunds

CopyFund is like a container where the fund managers put different as sets of inter related industries. They try to balance the risk score as low as possible. Doing so, the assets get distributed in different ratios.

For example, a crypto fund will have Bitcoin shares at most because it is more stable than Etherium, Lite coin, and others.

In the CopyFunds, it’s not necessary that all the assets there are the same. A gaming CopyFund may have both Nvidia shares and EA shares. Although both Nvidia and EA are completely different companies, in different industries, Nvidia being a hardware manufacturer and EA being a software/game distribution company, they still get their respective places in the gaming CopyFunds section.

Difference between CopyTrading& CopyFunds

The difference between CopyTrading and CopyFunds can be seen easily if we look at the terminology related to each of them.

If you go to copy a trader, you’ll see the option of getting started as “Trade.” But for CopyFunds, it says “Invest.” This gives us a clear concept of the prime difference between CopyTrading and CopyFunds.

CopyTrading is preferred for short time investments. You see almost immediate fluctuationin their market state. But in CopyFunds, the investment is made for a longer time. That’s why it says “Invest.”

A trader gets to invest in the fund and wait for some time before he gets a good amount of profit. But a trader needs to invest a good total in order to profit more because the risk score is comparatively low in CopyFunds, so as the profit percentages.

The profit in CopyTrading can be massive, depending on the amount and the percentage. But same goes for the loss. The trader can lose a lot if his/her copied trader doesn’t do well. That means the Risk Score is higher for CopyTrading.

That’s why a new trader is most likely to invest in CopyTrading than CopyFunds because CopyTrading offers a chance for greater profit. But an experienced trader will go with CopyFunds. They know what can happen to their hard-earned money when things don’t goin his favor in CopyTrading. That’s why they tend to invest in CopyFunds for their balanced risk score. If EA shares fall, they know that their Nvidia shares are here to cover them and balance out the loss to an extent.

By now, you have understood the key differences between CopyTrading and CopyFunds. Now it’s time for you to give them a thought. Find out which one suits your interest the most and get with it.

Happy Trading.

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