Not upheld: Fair execution of stop loss orders and CFD pricing complaint against eToro (UK) Limited

Decision detail

Summary

Mr C complained that eToro unfairly executed a stop loss on four short CFD positions in company A shares, closing them at prices between $253.05 and $254.80 when his stop loss was set at $253, resulting in approximately $21,000 in losses. eToro subsequently refunded $310.75 after retrospectively reviewing three positions. The ombudsman examined eToro's pricing data, the underlying share prices, and eToro's terms and conditions, finding that the stop loss was fairly triggered at $253.0491 (including the disclosed 0.15% spread) and that execution prices reflected the market price of the underlying asset. The ombudsman concluded that eToro had met its fair execution obligations and that the refund already paid was appropriate, therefore not upholding the complaint.

The Ombudsman's reasoning

The ombudsman found that eToro's CFD pricing was consistent with the underlying asset's movements and that the stop loss was fairly triggered at $253.0491 after applying the disclosed 0.15% spread. The execution prices, while showing slippage above the stop loss level, were consistent with the market price of the underlying shares at the time of execution. The ombudsman noted that eToro's terms clearly disclose that stop losses execute at the next best available price and that slippage can occur. The refund already paid by eToro was deemed fair given the evidence demonstrated the CFD was priced in line with the underlying asset.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website