<p>eToro, an Israel-based social
trading network, has reduced the amount of <a href=”https://www.financemagnates.com/terms/l/leverage/” class=”terms__main-term” id=”df61d302-43af-41c3-a06a-e37426a0c2c0″ target=”_blank”>leverage</a> permitted on new trading
positions in the banking sector to a maximum of X1. The online trading platform disclosed this on
Tuesday in a notice sent to its clients, citing “current situation.”</p><p>The update comes days after <a href=”https://www.financemagnates.com/cryptocurrency/svb-crisis-circle-escapes-usdc-depeg-with-regulatory-assurance/” target=”_blank” rel=”follow”>the collapse of Silicon Valley Bank
(SVB)</a>, a US-based lender targeted at
early-stage early companies, <a href=”https://www.financemagnates.com/cryptocurrency/crypto-spooked-and-suspicious-after-silicon-valley-banks-collapse/” target=”_blank” rel=”follow”>sent shockwaves</a> across the US and global financial industry. Another US bank, Signature Bank, was <a href=”https://www.financemagnates.com/cryptocurrency/signature-bank-collapse-coinbase-and-paxos-disclose-massive-exposure/” target=”_blank” rel=”follow”>abruptly shut down</a> by regulators as a result of the development. In addition, two days before SVB’s collapse, crypto-friendly <a href=”https://www.financemagnates.com/cryptocurrency/silvergate-bank-announces-voluntary-liquidation-amid-troubles/” target=”_blank” rel=”follow”>Silvergate Bank winded down</a> its banking operations and voluntarily liquidated its assets in an “orderly manner.”</p><p>These developments <a href=”https://www.financemagnates.com/fintech/svbs-collapse-casts-shadow-on-bank-shares-as-first-republic-bank-slumps-over-60/” target=”_blank” rel=”follow”>cast shadow on US bank shares</a>, with the stock price of First Republic Bank
slumping by over 60% on Monday. However, eToro in the notice
pointed out that the leverage restriction will only affect future positions as
existing positions will be maintained.</p><p>SVB Crisis Pushes eToro to Axe
Leverage</p><p>eToro, which operates in 140
countries including in Cyprus, the UK, the United State and Australia, enables
customers to trade in stocks, commodities currencies and contracts for
difference. On its platform, eToro enables
its clients to trade the stocks of US banks such as Bank of America,
Citi, Goldman Sachs and JPMorgan Chase & Co, among others global banks. </p><p>However, the
development in the US has forced the network to impose restrictions on leverage
positions in the industry. “The restriction will remain in
place until our <a href=”https://www.financemagnates.com/terms/r/risk-management/” class=”terms__secondary-term” id=”aedb745c-adf9-415f-97e2-ee56a920f0f8″ target=”_blank”>risk management</a> criteria allows us to enable additional
leverage,” the social trading network noted.</p><p>Meanwhile, eToro has been
expanding the portfolio of stocks available to its clients. In late January,
the company in partnership with UK startup Bridgeweave <a href=”https://www.financemagnates.com/fintech/etoro-introduces-ai-powered-porfolio-that-targets-high-growth-us-firms/” target=”_blank” rel=”follow”>flagged off ‘InvestorAI-US,’</a> a new smart portfolio that uses artificial
intelligence (AI) to provide retail investors with exposure to the stocks of 12
high-growth US companies. The company also recently <a href=”https://www.financemagnates.com/forex/etoro-launches-socialsentiment-portfolio-offering-retail-traders-exposure-to-esg-firms/” target=”_blank” rel=”follow”>launched SocialSentiment</a>, a new portfolio that offers retail investors
exposure to US-listed companies known for their solid environmental, social and governance (ESG) efforts.</p>
This article was written by Solomon Oladipupo at www.financemagnates.com.
