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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.

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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.

Starbucks shares : Good Longterm investment or not?

Starbucks shares: A good long-term investment?

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Starbucks is one the company shares that I have in my own portfolio. I have bought the shares in 2014 for a price of 64 dollar per share. And then in April 2015 Starbucks did a stock split at a stock price of $95.23. So instead of having one Starbucks stock I have now two Starbucks shares. At the moment of writing this blog the Starbucks share has a current value of $52 dollar. So my return is pretty nice so far. My plan for the Starbucks shares is really simple: buy and hold. In this blog you will read my analysis that I have done before I started to invest in Starbucks shares.

 

Starbucks Shares Internal Analysis

The first thing that I do when I look for a company to invest in is to look at their history. Who are the founder(s) and are they still active in the company? Then I look at the management team and their skills on executing the companies plan.

You can judge the skill of the CEO and his management team by checking out the company quarterly results. A good CEO and a good management team has a quarterly results that often meets the expectations of analysts. A super good CEO and a super good management team often delivers quarterly results that surpass the expectations of the analysts and their shareholders. And my dear friend Starbucks has that super good CEO and a super good management team. For this year 2015 their first quarterly results and second quarterly results already surpass the expectations of most analysts.

 

On 23th April 2015 Starbucks announced record revenue of 4.6 Billion dollars!

When companies produce those kinds of results then you know your investment will be profitable for sure.

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Starbucks Shares External Analysis

Your successful investment doesn’t rely only on the internal analysis of company but also on the external analysis. How does the company attain new customers and retaining them? How does the company perform compare to his competitors? How does the company deals with threats?

Let’s answer these questions.

  1. How does the company attain new customers and retaining them?

Starbucks gets most of their new customers by opening more stores worldwide. In the second quarter of 2015 Starbucks have opened 210 new stores worldwide. Another way of how Starbucks attracts new customer is by selling their products not only online but also in supermarkets.

  1. How does Starbucks retain their customers?

Starbucks offers good products that meet the needs of their customers and they also provide good services to their customers through their Barista’s. Believe it or not Starbucks even has membership offers for their customers. Their membership program My Starbucks Reward has been so successful that in the second quarter 2015 1.3 million new members have signed up!

Starbucks now has over 10 million members in their membership program. Can you imagine a membership for coffee? Well Starbucks have pulled that off and not only that more members are signing up everyday.

  1. How does the company perform compared to his competitors?

Starbucks is beating their competitors; almost in every market Starbuck is the market leader.

  1. How do Starbucks deals with threats?

In my opinion Starbucks have been dealing with threats quite well I believe. For example last year in 2014, there was a commotion that Starbucks coffee was more expensive in China then in the US. The Chinese consumers were not happy about that and some of them threaten to boycott Starbucks. As a result of that commotion Starbucks shares began to drop in price at the stock market. Just in a few days Starbucks fixed the commotion by showing the Chinese consumers that the cost price for Starbucks was a lot higher in China then in the US. And so price of the Starbucks shares went up again

 

Conclusion

As long Starbucks keeps doing well in my analysis then there is no reason for me to sell the Starbucks shares only to buy more. For short term there a good possibilities to make money from Starbucks as there will be always fluctuations. Make sure to benefit from those fluctuations

 

 

 

online stocks trading profit

Online Stocks Trading in CTRIP: 1019 euro Profit

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By trading stocks online in a smart way, we made 1019 euro profit yesterday. In this article we will introduce you to trading smart in stocks by explaining it with a real example.  After reading this article you can start trading too.

Online stocks trading: how did we make  a profit?

Trading in CFD is not only about luck. Using a strategy would up your chances by a lot to profit. Yesterday we found a good stock to trade: CTRIP, we opened a buy position (long) at stock price 65.70 and closed it at price 74.34, which made us a profit of 1019 euro with 400 euro. So how did we do this?

CTRIP1

online stocks trading profit

Step 1. Find a reason to trade

The first and most important step in online stocks trading is to find yourself a motive to trade. So why did we choose CTRIP? First of all, we knew that it’s quarterly report was going to be released and whenever news like that comes out, a stock has super high volatility. We also found out that this news was going to be positive. How? We read about the company, we did a simple Google search. CTRIP is a Chinese online travel agency for booking flights, hotels and trains. So we found out that CTRIP is a online technology company and by watching the economic news we know that technology companies are doing well in these times. We then went to the investors page of the company (every stock company has one) to read the latest news and the previous quarterly report and did a quick analysis. All was positive. This has made us decide to open a buy (long) position on CTRIP, because we expected that the newest quarterly report would also be positive. This means we think that the stock price will increase after report release.

Trading with positive or negative news is what you call ‘Fundamental Analysis‘. Read more about how to use fundamental analysis to profit at this page.

 

Step 2. Opening and closing a position

After reading about the company we also found out when this report was going to come out. It turns out that it would come out after-market. This means after market close. In the online stocks trading world observation is one of the most important thing that all traders must do before entering the market. So we decided to watch the position all day and find the perfect time to open a buy position. We decided to open a buy position right before market close with 400 euro when the stock price was at a low price. We deposited the money, not more and not less, because we don’t want to lose more than we deposited.

After market close the news of the quarterly report came out and it turned out to be, like expected, positive. During the night we could see that the after market price was rising over 10%. This means a big win! At market open, the next day, the price rose around 13%, we decided to wait till market open and close the position as quickly as possible, because whenever a price is rising that much there could be a big sell off, which results in stock price decrease. So after the market opened, we closed the position immediately to lock the profit and gained ourselves 1019 euro profit.

CTRIP1

online stocks trading profit

 

CFD’s: Trade with a small deposit like a big trader

How did we make so much money with only 400 euro in online stocks trading? Well, we traded in CFD stocks, which gave us a leverage of 1:20. With leverage you can trade with a small deposit as a big trader. This meant for us: trading with 400 euro was actually worth 400 * 20 = 8000 euros. So we could trade 8000 euro worth of stocks with only 400 euro, which means we can profit 20 times more than our deposit, but we cannot lose more than our deposit. Which is awesome, but only when you use the right strategy.

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Plus500: Trading in CFD’s with a leverage of 1:20. Open a free account here.

 

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Markets.com: Trading in CFD’s with a leverage up to 1:20. Open a free account here.

 

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Avatrade.com: Trading in CFD’s stocks with a leverage of 1:10. Open a free account here.

 

Step 3. Evaluate the result

In the online stocks trading world it is important to evaluate your trade after closing a position. Write it down in your plan, tell the document what you did and why you did it, because that is the only way to learn from your profits and also mistakes. This way you can adjust your strategy until you find one that fits you the best.

 

So in short…

 

Guide-to-profit

online stocks trading profit

 

Alibaba stock: Good or no good?

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After their IPO on 19th September 2014 the price of Alibaba stock was started at $92,30. And reached the highest price of $120 on the 14th of November 2014. From there the stock price of Alibaba declined to $82,15 today 21th of April when writing this article.

 

What causes the declining?

Well since Alibaba’s highest pike on the 14th of November, the company have been receiving critics from Chinese regulators on their e-commerce activities, forecasts that missed estimates and Alibaba is also currently facing slow growth in sales. And don’t forget the Chinese e-commerce market is growing that fast as many are expecting it.

 

What to do now?

Alibaba is still facing many challenges; they are still testing the waters of the international markets. Jack Ma announce a while back that Alibaba is going to focus a lot more on making money international then only on China. In the long term might succeed in this but in the short term its going to be difficult. Having Amazon as a competitor…

On the other hand Alibaba profits are still rising and sales are still good despite it didn’t met the expectations of many analysts. And Alibaba is making big investments in small tech us companies that could give Alibaba a good return on their investment. One the start up company that Alibaba have invested in is SnapChat.

We at TradeAndInvest101.com are thinking on holding Alibaba stocks with put options. We might go in the swing trade with CFD’s on Alibaba stocks.

Alibaba stock Price Movement 21-04-2015

As you can see from the screenshot. From march till now the Alibaba stock price movement has been and still is in a indecisive trend. You might have notice the double inside bar which indicates that the indecisive trend will continue. On 7th may 2015  Alibaba company will  announce their first quarter results. We think that day is the day that might end the indecisive trend of Alibaba stock price movement. If the results are good and Alibaba stock price close above 85 dollars we might get a uptrend of Alibaba. And if the results are bad and the stock price of Alibaba closes below 80 dollars we might get a downtrend of Alibaba.