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trading paypal ipo

PayPal IPO gives new investment opportunity

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Today is the  PayPal IPO. After  thirteen years being with Ebay, Paypal is now a separate company on the stock exchange. And that is good news for us investors and traders. If you are interested in investing in Paypal then you must read this article. In this article you will get to know what the business model is from Paypal and what the potential earnings can be.

Paypal IPO : why?

Why did Ebay and Paypal seperated from each other? The reason why they have separated is because the mobile payment market is showing big promises as the e-commerce market keeps becoming bigger and bigger. And more and more big tech companies like Apple , Amazone and Google have created their own mobile payment system in order to benefit from the growth of mobile- and on-line payment market. If Paypal stay with Ebay they will be limited in teaming up with other e-commerce websites. (as they see Ebay as their rival) With Ebay gone now  it will be interesting to see on how the new income stream of Paypal will look like. With the extra cash that PayPal IPO gives it will be interesting to see of what kind of companies PayPal will acquire.

PayPal Business Model

Lets take a look on how PayPal earns their money. PayPal generates revenues from fees charged to consumers and merchants for different payment-related services. PayPal allows consumers to transfer funds to merchants in a secure manner through the PayPal digital wallet. The cool thing about the Paypal Digital Wallet is that it not includes internal resources such as the PayPal account balance and PayPal credit account but they also include external resources such as bank transfers or credit and debit cards.  And one other thing PayPal does not charge consumers for funding or withdrawing funds  but they only charge fees when consumers are lending money  by  the PayPal Credit.

Most of PayPal’s revenues are generated from transaction fees that is charged to merchants. The fee percentage vary from 2.2% + $0.3 per transaction for eligible merchants to 3.9% + a fixed fee based on currency received for international fees. With a other service PayPal Here Paypal charges a transaction fee of 3.5% of the transaction value and offers a free point-of-sale station for small businesses to process credit/debit cards in their stores.

Start trading in PayPal now. Open an trading account and receiving a nice welcome bonus of £20,-

 

PayPal Growth

 trading paypal ipo

trading paypal ipo

As you can see in the graph above PayPal has been growing very strongly. In the first quarter of 2010, PayPal processed $21.34 billion in payments. By the fourth quarter of 2012, this amount grew to $41.47 billion. In the first quarter of 2015, the amount of payments processed grew to $61.41 billion. This represents nearly 300% growth in payments processed since 2010. This number is likely to grow in the future as PayPal expands its mobile payments business. PayPal processes approximately 30% of its payments on mobile devices, up from merely 1% in 2010. With these good numbers it makes it very interesting for investors to invest in the PayPal IPO.

 Conclusions

The long-awaited PayPal IPO is expected has finally taken place. With the PayPal’s impressive TPV and net revenue growth rates on top of the promising expansion potential it makes the PayPal stock a very attractive growth investment. Without the restrictions of Ebay Paypal can focus on offering their services to the competition of Ebay as well. So there is a very good chance that Paypal can grow more in value over time. The first few weeks could be very volatile , so short term traders can benefit nicely from it.

bitcoin-value-trading

Bitcoin value aiming for new heights

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It’s has been a while that we have heard of the Bitcoin. Since its all high-ranking peek of $1124.76, the Bitcoin value have mainly dropped down in price. However since the begin of June the Bitcoin value have been increased by 10% so far. In this article we are going to look to see if it is time to trade or invest in Bitcoins again.

Bitcoin value can go up this year

There is a good chance that the Bitcoin Value can go up nicely this year. And here is why.

 

  1. Regulators

This year 2015 , Bitcoin is getting regulated by the US. In early may 2015 the first Bitcoin Regulated exchange ITBIt.  Many US states are legalizing Bitcoins to help the start-up companies that related to Bitcoin in their region.In Europe the EU and the Bank of England are investigating on how to integrate crypto currencies like the Bitcoin can be integrated in the financial system. In Spain and in Switzerland Bitcoins are exempt from VAT taxes, which make the Bitcoin more attractive. (sources : yahoo finance)

 

  1. Bitcoin related companies

More and more Bitcoin related start up companies are coming up and many investors are funding them. One these investors is Goldman Sachs. Goldman Sachs invested this year $50 million in a Bitcoin related start up company. Which is surprising to me. I thought all banks were against bitcoins. Goldman Sachs is not the only bank that has invested in a bitcoin company. Big banks all over the world are considering investing in bitcoin companies.

 

Bitcoin Value on the markets

How is the Bitcoin performing on the markets? The Bitcoin value have been increasing since Febuary 2015. As you can see in the graph below the bitcoin is setting a new higher as it has broken his horizontal resistance level of 11 March 2015. Currently Bitcoin value was 310 dollars when writing this article.

bitcoin value trading

bitcoin value trading

 

As you may have notice the bitcoin value began to rise in June. There are several reasons of why the bitcoin started to grow in value.

  1. It’s around that time when many US states were officially legalizing the bitcoin.
  2. Turmoil in Greece and China caused currency investor to invest in something that can increase in value like gold or bitcoins.

The possible Grexit situation could make big and small companies realize that it might be better to have bitcoin as a spare currency in countries that have financial problems. So that when a bank doesn’t supply money, the companies can still do business.

 

Conclusion

In short term Bitcoin value will go up, as long there is an uncertainty of Greece. For long-term is starts to look good for the bitcoin value. More and more US states is legalizing regulating on the bitcoin. And many bitcoin related start up companie are coming up all over the world. These companies where investors pour in millions of millions dollar will promote bitcoin heavily to the general consumers. It’s probably smart go for the short term first by trading in bitcoin cfds. Big percentage in price change will come since the bitcoin has broke its resistance level for this year. So your profits will be a lot bigger. And if you are in for the long term then buy bitcoins in portions. Don’t go all in right away.

 

Grexit

Grexit: The possible consequence

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With the Greece Referendum all tension will be on today’s with the voting results. Will Greece say yes or no to the plans of the EU? On Friday some traders and investors are already selling their position or are buying new positions to benefit from the Greece current situation. Today in this blog we will discuss of what the possible consequences are when there is a Grexit.

 

Grexit: possible consequences on Greece

When a Grexit has taken place, the first thing that the Greece government is going to do is taking measures that would prevent a bank run before installing the their own currency Drachma. As you already might have notice, the Greece citizen can only withdraw 60 euro a day at the moment.

Greece already has a bad economy and it will only get worse when there is a Grexit. Because there will be barely investment capital coming to Greece. It’s too risky for investors to invest in Greece. So Greece will struggle to get his economy growing.

With already a high unemployment rate, there is a chance of riots as the Greece citizen continues to have barely a chance to earn money so that they can take care of their needs. But I think when there is a Grexit; most Greece citizen will immigrate to other EU countries. Because if I was a Greece citizen I would have emigrated to a other EU country

However Greece can devalue their currency to boost their export. But the question will be will the profit of the export enough to compensate the loss on the import and to grow the Greece economy?

 

Grexit possible consequences on the EU

What are the possible consequences that we can expect on the EU? If we look at the export balance of Greece we will see that the top three export partners of Greece are: Germany (11%), Italy (10%) and Turkey (6%) of an average monthly export deal of 2200 million Euros a month. If Greece decided to leave the EU then Germany and other Greece top export partners could in theoretically buy more for a cheaper price. If we look at the import balance we see that the top three import partners are Germany (13%), Italy (13%) and China (8%) of an average monthly export deal of 3700 million Euros a month. With a Grexit we can expect that import value will drop, because it will be too expensive for Greece to buy.

With import dropping in value not only companies get hurts badly in Greece but also companies that does business with Greece. Some are already facing problems already. One of the effects of the current capital control in Greece has caused is that Greece businesses aren’t allowed to pay its international suppliers.

Companies that were doing business with Greece companies could go bankrupt or they might have to downsize. As being traders we could make good profitable trades by going short on these companies.

Grexit

Grexit

Let’s take a look to who Greece owes money too. As you can see in the figure above where it states 15% of Greece debt is through bonds. Banks, institutional funds, private investors and so on were properly buying these bonds.

When a Grexit has taken place, there is a possibility that Greece won’t pay any the interest to any of his debt holders for a while. They already have missed out the payment on the IMF. Banks and governments who were lending money to Greece will have to re-balance their budget because they don’t receive interest rate. This will lead into a tighter government spending and a tighter lending out money from the banks.

Then one more thing that we should not forget is immigration. If Greece has no more money then how can they care of their borders? And we should not forget the threat that the minister of defence of Greece made in May. Where he threaten to over flood Europe with economic refugees and thousands of Jihadist.

To put it simply blunt a Grexit will possible lead into a higher unemployment in Greece as well in Europe, companies can go bankrupt unless the governments bails them. All of this will probably bring Europe into a recession.

 

Grexit: possible consequences for the EURO

When a Grexit has taken place the Euro will go down in value if there are no strong plans that show that Europe will survive the Greece crisis and that Europe will stay as a strong Union.

 

Grexit:  possible consequences on the Markets

What are the consequences on the markets? As we could see on last week Monday all markets were going down. And it recovers a bit during the week but that was because the markets were hoping that somehow a Grexit could be prevented.

The bonds yields from different EU countries went up. Spain bond yield went up 11%.

When the Grexit has taken place the markets will keep on going down until the EU and ECB can convince the markets to calm down with a realistic plan and program (QE2) that ensures investors that Europe will be a strong union.

 

Step 3: Trading plan

Online Trading: How to make a good profit with just 160 Euro

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Starting with online trading is much easier than you think. In this article we will explain to you how we trade and how we made a profit of 422 euro with only a small deposit of 160 euro.

 

Why online trading?

Trading used to be only for banks and big companies. Now, with the internet, it is possible for anyone with an internet connection to trade. This means you can not only trade from home, but from wherever you are and whenever you want. Besides this awesome fact, you can also trade with leverage. Leverage? Yes, with a leverage of 1:20 you can trade in stocks (CFD’s) 20 times more worth than your deposit. The advantage of this is that you can receive a very high profit with a small deposit.

For example:

Let’s say you have 100 pound and the leverage is 1:20, with only 100 pound you can open a position worth of 2.000 pound (100 * 20).

You can see with only a small deposit, you can make a big profit. This is perfect, because even if you don’t have a lot of money, you can make good money with online trading.

 

So how can you start online trading?

First of all, sign up to an online broker. Compare the best online brokers here and receive a 20 pound bonus to practice with. There are no obligations when you sign up, so go ahead and try it out. Find out how to receive more bonus here.

In our previous blog “Smart online trading in stock CTRIP: 1019 profit”, we have explained one of our trading strategies:

Guide-to-profit

  1. Find a reason to trade
  2. Open and close a position
  3. Evaluate your trade

Now how can you start doing exactly this? What sources do you use? This article explains just that. We will also use a real example of one of our own trades. Now you can follow these quick steps to begin to trade right away. The steps below follow the strategy that we learned before, but this time we put it in action! You can even use these steps below as a checklist for your own trading.

 

Step 1. Choosing the stock

First of all find a good earnings announcement calendar like the one from Yahoo:

  • Review which stocks have an earnings report coming out today.
  • Pay attention and only choose the ones that are available in your online broker stocklist.
  • Only choose stocks that have a time supplied. Write this down.
  • Find out what the leverage is, the higher, the better.
  • Find out about the company.

A real example:

On the 10th of June, 2015 we looked at the earnings calendar and we found Box Inc (NYSE: BOX). First thing we did was:

  • Find out if this stock was on Plus500, it is. Now let’s check the leverage: 1:20. Great!
  • The time of release is after market close. Love it! We tend to like these stocks more, because during after- and pre-market, you usually can predict what direction the stock is going. So at market open, we would be more prepared.
  • Now a little Google search helped us learn about this company, it is a technology company much like Dropbox. They use the cloud to give people the chance to back up or share their files online, so it can be accessed anywhere. This sounds good! Let’s move on.

 

Step 2. Should I open a long or short position?

After learning about the company, follow this checklist:

  • Find out whether the announcement will be good or bad. It doesn’t matter which direction it goes, because either way, you can profit. You should already know that the movement of a stock is almost always volatile whenever an earnings announcement gets released. To be sure, you could check the volume of the stock on Yahoo Finance, for example here.
  • StockTwits: one way to find out whether the earnings announcement will be good or bad is by reading what other people say about this stock. We tend to read StockTwits for this. For BOX the link is: //stocktwits.com/symbol/BOX.
    You can insert your own stock in the search field and then view what other people think about this stock. You can even see whether or not they think it is going up (bullish) or down (bearish). If you see a lot of bullish, it most likely will be bullish.

As for BOX, we could see it go up, not only because of what we read online, but also looking at the past quarterly earnings numbers. Where do we find these numbers? At the website of the company itself. All companies where you can invest in has an investors page. BOX’s investors page can be found at: //www.boxinvestorrelations.com/. Also, Google is your king.

 

Step 3. Open the position at the right timing

All this together has decided it for us. We think BOX will go up. Next we did the following:

  • Open a position not too early: we opened a buy position on BOX just before the news came out. As noted before, this is just before market close. Don’t open the position too early, because the normal daily volatility could give you a disadvantage.
  • Money deposit: also, we only deposit money that we want to use: 160 euro. Not more and not less, because this will help us not lose more than we want to. This is important! Only use money that you can afford to lose.

Now we wait.

 

Step 4. Closing the position

News is out! The market is still closed though. All we can do is check the stock price (the aftermarket/premarket one) constantly, you can use the NASDAQ after hours website for this. Yahoo Finance also provides this information. It is in the small font just under the open market price.

So what now? Be sure to be ready when the news comes out, the stock will now go up or down very fast. Our stock BOX moved up, we could already see the numbers in the aftermarket. The next day just before market open, check the numbers again. You will see at what price the stock will open. At this point we already knew that we had a win. The next thing to do is preparing ourselves to close the position as soon as possible. At market open, at the first possible opportunity we closed the position, grabbing our profit of 422 euro. Amazing!

plus500-result-box

Remember this: don’t ever be greedy. Unless you know how to use a stop loss, you can wait before closing the position. More about stop loss strategies will come later.

 

Step 5. Withdraw your money unless you want to use it for a future trade again

Don’t let your money sit on your account. Withdraw it, use it, enjoy it! Online Trading isn’t all work, it should be fun too.

Now don’t forget to evaluate your online trading today, you can always learn from it for future trades.

Got questions? Feel free to ask them below.