Social Trading is a new form of investment on the Internet. Investors called “traders” present their trading ideas on social trading platforms so that other investors can follow them.

The possibilities provided by social trading platforms to investors are diverse and vary from provider to provider. Some platforms offer users the ability to observe and comment on the strategies of traders, others allow automatic copying, also referred to as “Copying of Trading”. wikifolio.com is the only social trading platform that allows the performance of trading ideas to be followed through specially issued financial products (wikifolio index certificates).

In general, social trading should help make investment activities more transparent and comprehensible. The trading of traders is immediately published and can usually be commented on, including by them.

Which social trading providers are there?

The three best-known social trading providers in German-speaking countries are wikifolio.com, ayondo and eToro. While investors at ayondo and eToro must open their accounts in order to copy the strategies of traders, investors at wikifolio.com can follow the performance of the virtual portfolios via specifically issued wikifolio certificates.

Details about the business models, such as how providers earn money and what incentives they offer traders and investors, can be found in the following table:

 


wikifolio.com


ayondo


eToro

Model

Representation of the development of trading ideas in index certificates

Copying of Trading

Copying of Trading

Investment universe

Stocks, ETPs, funds, leverage products

Forex, CFDs, Futures

FOREX, CFDs,

Commodities

Business model

5–30% performance fee according to the high watermark principle + certificate fee of 0.95% p.a.

Spread

Spread

Trader remuneration

High watermark principle

The top trader receives a share of the commissions that ayondo receives from the broker (ayondo markets)

Number of followers

Trader incentive

Performance and investor confidence

Increase trades

Increase number of followers

Broker

Independent

ayondo markets

RetailFX

Pricing

for wikifolio certificates: Stock exchange prices

Pricing by brokers

Pricing by brokers

Headquarters

Austria, Germany

Germany, United Kingdom

Cyprus

Trading venue

Stuttgart Stock Exchange, over the counter trading with L&S

Ayondo

eToro

Additional funding obligation

No additional funding obligation

No additional funding obligation

Additional funding obligation

 

See for yourself and test wikifolio.com! 

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