Retail FX and CFD broker eToro has issued a statement regarding its actions amid the recent spike in volatility. As many other online trading firms, eToro was pushed to adjust trading conditions to the rapidly changing market environment over the last several days.
The company had the following to say:
**Response to social statement about closing positions**
In the last few days there have been a large number of comments on our feeds around the closure of positions. We want to take this opportunity to clarify that it is never eToro’s goal to close positions. As an online investment community we exist to enable our users to participate in the capital markets.
Manual positions on our platform are kept open as long as the requested Take Profit or Stop Loss rates are not reached in the market or a manual request is not made to close the position.
As a regulated broker, we must always act in line with the regulations of the regions in which we operate and within the scope of what the market can offer.
Some corporate events, such as delistings, and certain market events, such as contract rollovers (for example on instruments like Copper or ChinaA 50) may cause a position to close at the last traded rate.
From time to time there may also be extraordinary circumstances that will require positions to be closed or for trading limitations to be applied. These circumstances could include regulatory requirements, new laws or directives and/or risk management decisions. Such events may come with advance notice, while others may not but we will inform our users of any changes as soon as we can.
We hope that this explanation is reassuring. We strive to provide the very best service investment experience for our clients.
The eToro Team
This announcement is released three days after the eToro team issued a notice regarding trading in certain stocks.
Back then, eToro said that, due to low levels of liquidity, the company made some changes to how a number of stocks can be traded on the platform. The broker disabled the ability to open entry and exit orders on a number of stocks when the market is closed.
This is the list (valid for the moment when the notice was issued):
$WDI.DE (Wirecard) $HTZGQ (Hertz Global Holdings Inc) $ACB (Aurora Cannabis Inc) $NIO (Nio Inc.) $MARA (Marathon Patent Group Inc) $RIOT (Riot Blockchain Inc) $AYRO (AYRO Inc) $CPE (Callon Petroleum Co) $OSTK (Overstock.com, Inc.) $BLNK (Blink Charging Co) $FVRR (Fiverr International ) $RENN (Renren Inc.) $HEAR (Turtle Beach Corp) $GPRO (GoPro Inc) $AAL (American Airlines Group Inc) $NAKD (Naked Brand Group) $TRXC (TransEnterix Inc.) $JAGX (Jaguar Health Inc) $ADMP (Adamis Pharmaceuticals Corp) $INPX (Inpixon) $COCP (Cocrystal Pharma Inc) $BNGO (BioNano Genomics Inc) $SHIP (Seanergy Maritime Holdings Corp) $ZYNE (Zynerba Pharmaceuticals Inc) $TBLT (Toughbuilt Industries Inc) $BOXL (Boxlight Corp) $CRBP (Corbus Pharmaceuticals Holding) $NNDM (Nano Dimension Ltd) $HTBX (Heat Biologics Inc) $SUNW (Sunworks Inc) $SINT (SiNtx Technologies Inc) $OCGN (Ocugen Inc) $IZEA (IZEA Worldwide Inc) $HTGM (HTG Molecular Diagnostics Inc) $AIHS (Senmiao Technology Ltd) $GEVO (Gevo Inc) $CODX (Co-Diagnostics Inc) $QD (Qudian Inc.) $TTCF (Tattooed Chef Inc) $DGLY (Digital Ally Inc) $BKYI (Bio-key International Inc) $PDL.L (Petra Diamonds Ltd) $GME (GameStop Corp New) $GSAT (Globalstar) $AML.L (Aston Martin Lagonda Global Holdings PLC) $CINE.L (Cineworld Group PLC) $TLRY (Tilray, Inc.) $SOLO (ElectraMeccanica Vehicles Corp) $OGI (Organigram Holdings Inc)
Starting January 31 2021, the broker is no longer offering these stocks as CFDs but only as the underlying asset (x1 leverage only). eToro stressed it needs to work within the bounds of liquidity available on exchanges on which these stocks are listed. Opening CFD positions for these stocks was made “close only” on Sunday January 31, 2021.”Close only” means that users cannot add more funds to the existing CFD positions on these stocks.
Let’s note that, in its statement on recent market volatility, the UK Financial Conduct Authority said that:
“Broking firms are not obliged to offer trading facilities to clients. They may withdraw their services, in line with customer terms and conditions if, for instance, they consider it necessary or prudent to do so. Firms are exposed to greater risk and therefore more likely to need to take such action during periods of abnormally high transaction volumes and price volatility”.