Social trading is not necessarily Copy Trading

A portion of social trading is Copy Trading, where trading ideas of selected traders are simply copied or automatically replicated. The disadvantage of Copy Trading is that the actions of the traders occur offset in time and cannot be reproduced with the same conditions in most cases. But investors can often decide whether they follow all actions or only individual trades.

With Copy Trading platforms, the prerequisite for using the platform is not only registering, but also maintaining a platform-specific broker for investing in the strategies published there.

Copy Trading providers often come from the field of foreign currency trading (Forex, CFD trading) which is not regulated by the stock exchange. In this case, the price setting is done by the broker himself. However, genuine providers in this area build up the corresponding reserves (“hedging”). Nevertheless, the so-called “additional funding obligation” may come into play for investors, where the investors must cover losses that go beyond the capital they invested.

The compensation model of the traders active on the Copying of Trading platforms is usually based on the number of transactions in the brokerage account. Thus, these traders are very active and often act by the minute with the goal of increasing the number of their own trades.

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Comparing Copy Trading and Social Trading with


Copy Trading in general


Copy Trading

Representing the development of trading ideas by an index certificat

Investment universe

CFDs & Forex

Stocks, ETPs, funds, leverage products

Business model


0-30% Performance fee according to the high watermark principle + up to 0.95% p.a. certificate fee

Trader remuneration

Based on the number of trades

High Watermark principle

Trader incentive

Increase trades

Performance fee


CFD Broker



Pricing by broker

Stock exchange prices

Registered office

Malta, Cyprus, Gibraltar

Austria, Germany

Trading venue


Stuttgart stock exchange, BX Swiss, OTC trading at L&S

Additional funding obligation


No additional funding obligation


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