Featured

Bi-Weekly Stock Prices: 19th July – 2nd August

With stock prices ever changing, we have created a bi-weekly blog on the price trends of all the stocks on our Bullbear app, which prices are mirrored to other broker apps, off by a few pennies give or take.

Just to note, we started this trend tracking on the 19th July, so please bear in mind in this. The image above is our current schedule on highlighting some of the brands we have on the app onto our social media channels which you can view here: Facebook, Facebook Group, Twitter, LinkedIn & Instagram. Lastly, this is the average prices amongst other brokers, so don’t take this as the accurate pricing as it may very well have been changed as soon as it was posted.

Download our app www.bullbear.io which is available on both Google Play & App Store

Stocks

Image created on Canva

On Monday, we decided to use 6 big brands; Amazon, Facebook, Intel, Microsoft, Netflix and Tesla. These are the starting prices on Monday Morning 9am British Summer Time (BST) on our app. Amazon is the most expensive stock on our app, at $3573.63 beating Google’s parent company Alphabet’s $2539.40. Intel is one of the lowest stocks at $54.97, slightly ahead of Pzifer and NIO.

Created on Canva

The image above is the second batch of prices, on the week starting 26 July 2021. Here, you can see slightly different prices and either an increase/decrease percentage % from last weeks prices. Amazon’s price is trending upwards yet again, as are Facebook and Microsoft and it doesn’t look like they are going down any time soon. Intel dropped 3.58% despite the difference being less than $2, and Netflix’s decrease continuing yet again.

Above is an image of the other brand stock prices from Monday 19th July compared to Monday 26 July, again with increase/decrease percentage comparison. The biggest culprit being Nvidia, with a decrease of over 73% which is shocking despite news of their tech being in the new series of Nintendo Switches, amazing graphics boosting gameplay and others but could be the blow dealt by the acquisition over Arm being delayed by the EU. Other increase including Alphabet, American Express, NIO and more.

Forex

We started the forex trading tracking prices on Wednesday 21 July at 9am BST. Again, these prices have been compared to other brokers to make sure prices are competitively similar.

Currently, we only have these 5 options on the app. But no worries, we’ll soon have more with our new update coming out soon. Yes you read that correctly, an update coming soon.

..The prices haven’t change drastically, some by a few pennies. In either case, not much loss or wins in this category, but we’ll continue to supply the information weekly.

Crypto

We started the crypto trading tracking prices on Friday 23 July 2021 at 9am BST. Like the other two, prices were compared to other brokers to make sure they are similar.

Fantastic news for all you crypto buyers, all the current crytpocurrencies currently on our app are on the rise, all with a healthy increase percentage. Bitcoin jumped up $400 with Litecoin up $15. Both Ripple and Ethereum both rose slighty at $0.29 and $0.15 respectively.

Commodities

We do have another aspect to the trading screen other than stocks, forex and crypto. Commodities is a less-known and used aspect for most people, but it was included either way. Unlike the other options, commodities are not shared weekly, but will be shared bi-weekly on these blogs going forward.

All of the options in the commodities have seen an increase in prices and trends look to continue upwards. We will keep you updated in the next bi-weekly blog.

If you dont want to wait for these bi-weekly blog posts or weekly social posts, do download our app available both on the Google Play Store and the App Store to check price trends and practice trading by using fake virtual currency with a no strings attached.

Featured

Stock Trading: How To Keep Positive

Losses in trading is inevitable, everyone goes through them. With the ever-changing environment, even successful traders go through slumps.

Quote by Chinese Philosopher Lao Tzu

There is a story about a person on the internet who went through two years without a negative month, making roughly $2000 a day on average during the period. Incredible right? They then spent the next year in a big slump unable to string two profittable months in a row. You can only imagine what an emotional rollercoaster that person went through, from total high to ups and downs. So you might be asking, how do you end a bad streak? Or avoid it?

Well, the truth is the market is unpredictable and it can change at any time, even during your beauty sleep. We strung this guide, in no particular order, up to help you keep positive during the highs, but also the lows, where we hope will keep you from total breakdown.

If you haven’t already, do read our blog on First Steps in Stock Investment in 2021.

Download our app, available on both the App Store and Google Play Store, to practice trading in stocks, crypto and forex.

Tip 1: Don’t dwell on it

The one thing people say when you are down is to not dwell on the issue, and in this case, its also true! Everyone gets rejected, everyone overpays, everyone goes through a tough period – that’s just part of life. When picking your next trade, be more conscious of your decision, talk out loud, note your thoughts and feelings to see if that choice is the right one. But most importantly, don’t dwell on it!

Photo by Miguel Luis on Unsplash

Tip 2: Review your trades

Detailing the trades that worked well can help you in the long run. By keeping track, you can see which types of trades but also which indsutry works well with you, but also the setup you set to help identify the ones that are most effective for you. Noting the bad trades will help you keep away from future unpredictable/bad trades.

Tip 3: Find your prefered industry

No two indsutries work the same. Finding your niche industry will help you specialise and focus on what works well. Some traders are unable to work well because there is a mismatch between their knowledge and styles, so to avoid this, ask yourself some questions like: What are my strengths and weakness as a trader? What are some qualities that help me be successful? What am I good at?

If you’re still unclear or undecissive of which industry to specialise in, you can always take personality quizzes to help you choose the best currency and industry to trade, but also which style you may need.

Tip 4: Don’t be greedy

This is a simple point. You’ve heard/read stories and you most definitely seen it in movies set somewhere around Las Vegas, most people tend to get very greedy when they are on a big run. The exact same thing applies to trading, don’t throw all your money at once. Rather set yourself a budget, a max amount you’ll spend on a company – this way you won’t gamble your whole money on something that could go sideways very quickly.

Photo by Firmbee.com on Unsplash

Tip 5: Research

This is probably one of the top 5 rules of trading. Always, and we repeat the word ‘ALWAYS‘, do your research. Never ever gamble your money away without reviewing exactly what you are buying. Treat stocks the same as purchasing a car, a tv, a bed or other goods – do some research on stock prices, trends and past results even if it was a year ago. Researching can save yourself from big losses.

Tip 6: Stop Orders

This specific option is not widely used in most brokers, but something you should look out for. Stop orders or stop losses enables traders to sell their shares once they fall below a certain price. This is one way to safeguard the amount of losses you take, even if you are busy or away, but also takes the emotion out of trading – giving you the time to think if you want to sell at a much advanced time.

Tip 7: Visualise Losing & Winning

Athletes visualise themselves winning a game. You need to put yourself in the same state of mind that will not only inspire confidence, but also help you realise the steps you need to make winning a reality. But you also need to visualise yourself losing. Accepting this fact ahead of time can help you get within the same mindset. A good example is being rejected from a job offer or a dating proposal – you need to feel the worse that could happen. This way, you’ll be better equipped to handle losses and potentially save yourself from making rash decisions under pressure, but also giving you a proactive step to avoid the outcome, such as a plan with a entry and exit plan.

Download our app, available on both the App Store and Google Play Store, to practice trading in stocks, crypto and forex.

Don’t forget, the biggest challenges in trading is to be as postivie and focused as possible, even when your account is in the negative. By keeping your confidence intact, you’ll have a better chance of making it out of a slump or keeping your account in the green.

Download our app to practice different trades with virtual currency before heading out and spending your money.

Featured

How to use the BullBear App

(July 2021 Edition)

Using apps is an everday occurance these days, no matter if its personal, social, shopping or at work. Sometimes, apps can be quite confusing to understand, this is why this guide exists. At the bottom of the page, you’ll find a small gif tutorial of the app.

We formally welcome to you the BullBear App!

Start

Download the app on Google Play | Download the app on the App Store

At the beginning, you can either sign in or enter as a guest. We recommend signing up as this way, you can keep track of your current progress (You’ll see why later!). You can also choose to login via your Facebook Channel, but we’ll show the sign-up process either way.

Sign-up screen on the app

Type in your email, selected password and remember to read the Privacy Policy and the Terms & Conditions before agreeing. Select sign up and lets proceed.

Homepage

This window is your homepage. You can find everything here from the trades, games, profile and more.

The app’s homepage

The feedback button allows you to leave a comment and up to 5 star rating feedback. If you can, please leave feedback so we can see what you think of the app and how we can improve.

The profile button opens your profile, which contains your username, email, profile picture and the option to change password.

The more button has more options, from settings, inviting friends, completed games and more. In this tutorial, we changed the setting to dark mode to allow a much nicer viewship.

Before we leave, notice the number 10 and the word bulls aside at the top. This is the number of Bulls you currently own, you can gain more bulls by doing challenges. Let’s continue to the Trade!

Trade

Trade is our practice trade area. The trades is broken by tabs; popular, stocks, forex, crypto and commodities. Here you’ll find a number of big brands and their stock prices, trends and more. The trends and stock prices mirror the actual prices in the stock market giving you the best real feeling when trading our fake currency.

The trade screen

You start of with 1 million coins. You can spend as many of those coins as possible when trading, and you can reset the coins at any given time. Remember, there is a trade fee of 0.1% and we do recommend mirror how much you would spend, rather than a unrealistic number. For example, if you plan on spending £100 on shares in Facebook in real life, you should also spend 100 coins in the game to give you the best realistic results.

You can always look at your portfolio by clicking the 3 … button on the top right corner.

Learn (Quiz)

Learn, or quiz, is the second option on the homepage. There are 14 quizzes here, each giving you a number of bulls for a right question. If you answer all the questions correctly, you will win the number of bulls stated. Each question has a read first option, here you’ll read up on a journal/blog, in which the quiz will test you on. Normally, you have 4mins to answer the quiz before the time runs out, so make sure you are on your A game.

The Learn (Quiz) screen

Disclaimer: The source and quizzes are for information purposes only; not intended as financial advice

Broker

Here we have our two partnerships; one with eToro and the other easyMarkets.

Games

The most interactive part of the app, the games are here to test your new found knowledge and ability against other players. There are 5 option; Play Duel, Tech Sector, Digital Currencies, Popular EFTs, and Healthcare Sector.

The games screen

The Play Duel is the easiest of games. Here you’ll have an hour to make the most coins where you’ll win 5 bulls. You can play as many as possible and the only limit is your potential. This is also the best place to win bulls to enter the other competitions.

  • Tech Sector cost 10 Bulls to enter. To win the game, you need to gain the most money and the player sitting first on the leaderboard wins 30 Bulls.
  • Digital Currencies cost 10 Bulls to enter, and unlike the Tech Sector, the top 50% of players win 30 Bulls.
  • Popular ETFs cost 30 Bulls and work the exact way as Tech Sector, with the winner winning 60 Bulls.
  • The Healthcare Sector cost 30 Bulls to enter, and like Digital Currencies, the top 50% wins 60 Bulls.

Rewards

Lastly, we enter the last option on the homepage – the rewards option.

The rewards section

Depending on how many Bulls you own, you can either trade for a £5 Amazon e-voucher with 400 Bulls or £20 App Store, Google Play or Netflix e-voucher for 1100 Bulls. Which one you’ll go for is up to yourself.

Do remember to read the terms and agreements as the conditions of the prize is located there.

Featured

Stock Investment: What Should Be Your First Steps in 2021?

The stock market can be a scary place for any beginner as it can become quickly overwhelming. As a beginner, you should always make sure you are well aware of the risks of gambling your money away, so we have put together a short starter guide for what should be your first steps before stepping into the stock market.

Invest in yourself to learn the basics

One just doesn’t waltz in and starts gambling their money without understanding the basic knowledge and terminology. For example, you don’t bet on a football game without knowing the odds, line-ups and even some background information – the stock market is the exact same thing. Understanding the trends of different industries and the current news can take a while to grasp – if you want to make money, you need to learn this first. Don’t forget to read books, watch videos and read journals!

We recommend you set up an account on our BullBear App which is free to use and you can test your knowledge using virtual currency and play against other people.

Mapping your goals and how to achieve them

Like any other things, don’t walk into something headon but rather, map out your ideas and how you would want to achieve them. Financial success comes from planning, like writing an essay, knowing which companies and/or industries you’ll like to invest and map out how much you want to spend, when you want to purchase stock, revising and researching trends.

Start with some paper, pens and draw yourself a circle. From there, web out with some ideas you would like to do, which industry/company you’ll like to invest in and even some tips and terminology to help you along the way.

Photo by Soundtrap on Unsplash

Decide how you want to invest

There are a multitude of apps out there that you could use – both on the app and google play store. Here, you are able to create an account and deposit any amount of your money to start your portfolio. We recommend going with eToro or easyMarket. Now that you know some different accounts, its time to think about your trading style in which we’ll include four:

1- Scapling: This strategy aims to repeatedly capture small profits. This means holding shares for a very short period of time and sell as soon as a profit arise. Note that not many apps allow this time of trading

2- Position Trading: This strategy involes trading to profit from dominant trends. A trend is when the share prices moves in one direction for a extended period of time.

3- Day Trading: This strategy involves trading your shares in a single day from opening and closing positions. Selling a trade before the market closes also reduces unfavourable news overnight.

4- Swing Trading: This strategy involves focusing on larger price movements, rather than start and end trends. These shares are usually held between a few days to a week.

Photo by Nick Chong on Unsplash

Don’t set unrealistic targets

One of the biggest mistakes people make when first starting trading is setting themselves unrealistic targets. The one thing we absolutely cannot 100% predict is trends. Something terrible can happen overnight and the prices of your shares can plummet, leaving you with less money than when you started of with, or vice versa. This can be very offputting, but you need to remember that trading is all about risk taking – everyone fails but its the successful ones you need to land.

We recommend you download our free to use BullBear App where you can practice trading shares with virtual money and play against other users to test your knowledge to win Bulls, a virtual trading currency you can use to win vouchers. Also join our FaceBook Group.

Featured

Trading from your sofa? | A look at pandemic investors

By now most of us are aware that investing has become hugely popular over the pandemic – people have more spare money and time to invest. You might be surprised however, at who has been learning to trade, read our article to learn more. 

Over the coronavirus pandemic the public have had a keener interest in the state of the economy, this partnered with more free time and arguably more disposable income has allowed for some sidelined hobbies to take centre stage. Amongst gardening and interior design we have seen a huge resurgence in investing!

Social trading platform, eToro has seen a crazy 420% increase in stock trades in 2020 compared to the previous year. The rise of ‘working-from-home investors’ paired with the launch of eToro’s zero commission trading is a winning combination. 

If you want to take advantage of eToro’s zero commission, sign up now!

Who are these pandemic investors? 

Over the past year millions of people have joined the world of investing. The media has often depicted young people as the main demographic of new investors but this isn’t true! Over the past few years it is true that investors have gotten younger and more women have got involved but over the pandemic it is actually the older generation who’ve been trading from their phones. 

Investopedia found around 60% of people who have taken up trading over the last year are between 40 and 74 years old. With 30% of new traders 24-40 that leaves only 4% of new traders being the young folk pictured in the media (18-24). Although eToro, a popular brokerage saw around 40% of their new customer base were under 29 years old. 

So how are people learning to trade?

Most people (47%) are learning to invest and trade themselves using a range of resources from websites to books, the least favoured category is the 5% who have learned from social media. 

A massive 84% of investors surveyed by Investopedia used financial information websites to learn how to invest with the second most favourable source being financial news outlets. 

On top of this a whopping 50% of investors knew very little before the pandemic showing a huge increase in interest in investing money for the future. 

So are new traders making a profit?

An incredible 86% of investors say they have made a profit over the last year. When looking at new investors, 53% admit to taking a loss. Interestingly new traders are more likely compared to experienced to hold their portfolio for a short period of a month or less. On the other end of the spectrum we can see most non-trading investors (58%) holding their portfolios for more than 5 years. 

Where do you think most new investors are going wrong? Although three-quarters of new traders are confident with their skills, those who admit to mistakes show some interesting results. A massive 56% of new traders hold the majority of their portfolio in only one stock or asset class. Overweighting is an easy mistake to overcome, by trading a variety of assets you can diversify your portfolio and protect yourself from the risk of one asset failing. You’ll thank yourself later when that risky IPO you were going to go all in on flopped. Another common mistake new traders made was being too reactive, 28% traded on a gut feeling alone. To trade successfully the most reliable method is looking at the data and analysing trends, although we’re not saying trading on intuition can’t be successful, it definitely isn’t reliable. 

The stats show that new traders typically go for headline investments such as Bitcoin, Tesla, GameStop, Amazon and Apple. Which isn’t really a surprise as it is these very headline names that can get people interested in trading in the first place!

Do you want to be part of the 84% success of new investors? If so, we recommend eToro and easyMarkets for beginners. 

How to make money with cryptos

Even while the market is crashing – By a former Goldman banker, part 1/4

Photo by Burst on Pexels.com

The basic conceptCryptocurrency futures arbitrage

A former Goldman banker gave us some great insights into making consistent money through futures arbitrage in the crypto market. He made $20,000 through this trading strategy. A 40% annual fixed profit!!

It is a simple trading strategy that allows to secure high profits from the cryptocurrency boom without being exposed to the infamously large price swings of cryptocurrencies. All popular news outlets have run stories about futures arbitrage in recent weeks but so far it is still unclear for many traders about how easy it actually is to implement in their own trading. We break it down into 4 simple steps that any trader could implement in literally 5 minutes!

Photo by Skitterphoto on Pexels.com

How to start

Create an account on Binance and sign up for spot and futures trading. Read through our strategy and decide if you want to cash in by executing this 5-minute trade which can bring major returns.

Photo by Roger Brown on Pexels.com

The Underlying Principle – “Cash and Carry”

The cash and carry trading strategy has been around in many markets for as long as trading itself. The idea behind this strategy is to buy the underlying asset such as a commodity or a given bond in the spot market (for the “cash price”) and sell the same amount of the asset in the futures market for a higher “futures price”. The different between the futures price and the cash price is called “carry” – when positive, it can secure a fixed profit.

Cash and Carry in Crypto Markets

While in classical markets the “carry” is typically a very low number of percentage points and gets easily eaten up by the cost of storing the commodity purchase in the spot market (you can’t simply put your gold into an electronic wallet), the carry in cryptocurrency markets can be up to 40% annualised without any storage costs! You read right, this means up to 40% fixed profit.

Photo by Karolina Grabowska on Pexels.com

How it works A simple example

The price of Bitcoin today is say $30,000 but the COIN-M futures price maturing on 24th September 2021 trades at $33,000. You buy one Bitcoin today and sell the Sep-21 COIN-M future and hence lock in a carry of $3,000. The idea is to buy Bitcoin now and agree to sell it at a higher price in the future and pocket the difference.

If the price of Bitcoin goes up you earn money on the Bitcoin you own (you are “long”) and lose the same amount of money on the COIN-M future which you have sold (you are “short”). This means that you are protected against upwards and downwards movements of Bitcoin (you are “delta hedged”) and make a fixed profit of $3,000 at maturity irrespective of where the Bitcoin price goes.

Photo by Pixabay on Pexels.com

The carry of $3,000 in this example translates into a profit of 10% for an investment of only 3 months. In annualised terms this represents a profit of about 40%, assuming you do the same trade 4 consecutive times over a time period of 12 months. This is a full 40% more than your bank gives you on your deposits! 

Do remember that you will need to open an account on Binance to make this trade. You don’t need to invest as much as the Goldman banker we spoke to. A small deposit of $100 can always get you started off. Stay smart to make consistent profits!

To continue reading about this strategy please follow our next 3 steps in the coming few days: How to execute this strategy on Binance, Why the crypto futures arbitrage strategy works, and What is the hedge sizing required to make futures arbitrage work with crypto.

The Information contained in or provided from or through this website is not intended to be and does not constitute financial advice, investment advice, trading advice, or any other advice. Crypto trading is highly risky and can result in financial losses. You should assess the risk before putting in your money.

Amazon stock beats earnings yet again | Stocks to buy

Amazon (AMZN) has been on the watch list for a while now, leading the pandemic field e-commerce boom. This week has been big for earnings reports with Amazon reporting impressive revenues for the first-quarter on Thursday. Both the first and projected second quarter revenues far exceeded expectations putting the spotlight on the e-commerce giant. Amazon’s profits have been surging through the pandemic and now boasts 200 million Prime members worldwide. Let’s dive into the details and see why Amazon stock is still a buy. 

The online retailer’s stock has risen 46% the past year and some analysts think it could still have further to go. As a result from this fantastic earnings report AMZN stock climbed 3.4%, giving it a good start.

Source: Money CNN

Amazon reported revenue of $108.5 billion far exceeding analyst expectations that fall around $104.5 billion. This gives the company a year-on-year growth of 44%! Expected revenues surprised us too with second quarter predictions at $110 – 116 billion – way above the $108.5 billion estimates. Operating income is not that unchanged year-on-year due to around $1.5 billion of costs accountable to Covid-19.

So what is next for Amazon? 

Whilst their cloud services division, Amazon Web Services, rose 32%, they have big plans to take this even further to expand virtual healthcare in the US. This tackles two of their targeted segments that makes Amazon the household name it is today. AWS is a profit powerhouse. In 2020, even though the segment made up just 12% of sales, it created a massive 59% of all operating profits.

“I think the power of AWS and their advertising and other software parts of their business and subscription models are the most exciting”

Tech Analyst Brent Thill of Jefferies 

So how do Amazon compare to competitors?

Currently, Amazon is the third-largest publicly traded company in the world, just behind Apple and Microsoft. Where Amazon sets itself apart is its cross-sector approach, the e-commerce giant does not stick to a particular consumer category being the “Earth’s biggest bookstore,” and leader in cloud computing. What is also easily forgotten is that Amazon works across the world and even generates through brick-and-mortar stores including Whole Foods and Amazon Fresh. 

Looking at price-to-earnings (P/E) valuations for the six major tech stocks, Amazon doesn’t show the greatest promise. AMZN has the highest P/E ratio meaning big investments give comparatively smaller profits. But it is good to remember that this doesn’t stop the company from impressive growth that consistently outperforms expectations. 

Amazon leads the pack having the most impressive potential growth and highest share “buy” ratings according to Wall Street experts. 

These are just estimates, of course, and there’s no guarantee AMZN will get there. But the consensus of optimism among Wall Street firms is noteworthy nevertheless.

Should you buy Amazon Shares?

The current consensus among 50 polled investment analysts is to buy stock in Amazon.com Inc. This rating has held steady since March, when it was unchanged from a buy rating.

Source: Money CNN

Amazon seems like a pretty reliable investment, but you could increase your earnings potential by timing your entry perfectly. Shares edged up 0.4% to 3,471.31 on Thursday, in range from a 3,436.03 handle buy point. This coincided with an early February peak for Amazon stock. Investors also could use 3,552.35, just above the consolidation high, as another entry.

Amazon Stock Price Forecast

The 45 analysts offering 12-month price forecasts for Amazon.com Inc have a median target of 4,000.00, with a high estimate of 5,200.00 and a low estimate of 3,420.00. The median estimate represents a +15.18% increase from the last price of 3,472.72.

Source: Money CNN

“With broad-based strength across e-commerce & AWS, Amazon’s Q1 ’21 earnings report demonstrates why it remains the industry leader.”

Michael Lasser, analyst at Swiss bank UBS
raised his price target for Amazon to $4,350 from $4,150.
Source: Money CNN

Consistently outperforming revenue expectations imply that future earnings may exceed analyst forecasts. Needless to say Amazon’s impressive record of growth means their shares will make a strong addition to your portfolio

There is a strong case for buying Amazon shares. Start building your portfolio now with  eToro and easyMarkets

Can the Bitcoin bubble burst?

By now we all know someone who has made some serious profit from investing in cryptocurrency. Crypto has traditionally been seen as extremely high risk, but with institutional investors getting involved, is there still a chance crypto markets could crash?

Bitcoin began trading back in 2009 when you could grab yourself a single Bitcoin for an eight-hundredth of a cent. Now a single Bitcoin is worth around $63,000 USD showing the phenomenal growth of the cryptocurrency over such a short period. Last year saw Bitcoin boom, but can it keep it up?

Bitcoin is a perfect 12-year-old bubble. The cryptocurrency has no intrinsic value so is a purely speculative asset whose value is controlled by market forces. There are a few other things that make Bitcoin special, including the fact that you still have a cost of production or “mining” as well as there being a total known quantity of 21 million. 

Ready to invest? Start building your portfolio now with  eToro and easyMarkets

While you might think Bitcoin is best placed next to the word bubble, there are other speculative bubbles out there. There are real-world cases of hyperinflated or valueless money out there. Most fiat currencies fall into a fundamental equilibrium where the value of the currency is stable, yet in a few cases such as Venezuela or Zimbabwe this fundamental equilibria that is relied upon has gone wrong and the price of money exploded. While most fiat currencies opt for the well-behaved fundamental equilibrium, there is an infinite range of equilibria that can support a stable currency price, and if this can happen to fiat currencies there is the potential for cryptocurrencies to stabilize too. 

Bitcoin is currently on a non-fundamental explosive price equilibrium and so does not make it seem like a low risk asset to invest in. Furthermore, Tesla’s recent Bitcoin buy-in boosted the crypto’s price significantly demonstrating that the exit of a large player could make Bitcoin price fall. We can use the case of GameStop to show how risky it is in theory to invest in an asset that’s price volatility is not based on a value anchor. 

The odds of Bitcoin crashing to zero at around 0.4%

In 2018, two Yale University economists (Yukun Liu and Aleh Tsyvinski) published a report titled ‘Risks and Returns of Cryptocurrency,’ that examined the risk of Bitcoin collapsing to zero within a day. They used Bitcoin’s historic returns to calculate the probability of a crash to zero at between 0% to 1.3%. If we compare this to a fiat currency, the same economists  found the euro has a 0.009% chance of collapsing to zero, so falls within the calculated range. While many try to argue that the lack of an intrinsic value means Bitcoin could collapse the mathematics and consumer confidence support Bitcoin. 

It might seem sensible to turn to the 2017 bubble to see how crypto’s can have a snap change in price. However, while the bubble back then was based on hype and alt streams of investors, the rise in crypto over the past year has a stronger base. So why is that?

  • A safe investment: Firstly, with the threat of economic reckoning due to Covid-19 many investors are switching from properties, savings and bonds to safe-haven assets and digital stocks. As Bitcoin is essentially a mix of both with the added bonus that some governments and large firms such as Paypal are adopting it as a valid payment method mark cryptos as a winner. 
  • Tech upgrades: Crypto technologies are being updated so they don’t require such energy-intensive computing processes which saves those who avoid crypto’s based on environmental grounds. There are also new layers of blockchain being developed to integrate crypto’s better into financial markets. 
  • Institutional security: Many institutional investors are now investing in cryptocurrency which gives a safety net for any big price changes in crypto. 

While half a decade ago you would be right in saying that cryptos are high-risk and a foolish investment, recently there has been a huge amount of support from large organisations. 

In recent months, there’s been a flood of institutional investment in Bitcoin, with companies including MicroStrategy, Tesla, Square, and Aker ASA buying Bitcoin for their corporate treasuries. Simultaneously, Canada’s Purpose Bitcoin ETF was launched as the first of its kind. This institutional investment has supported Bitcoin’s current bull run and counts as proof that cryptos are here to stay. 

While it is a fact that all cryptocurrencies are volatile and will remain speculative assets, the support of institutional investors and the solidification of cryptos as a new economic infrastructure means that cryptos are here to stay.

With the odds of Bitcoin crashing to zero at around 0.4% it would take a monumental feat and would be nearly impossible to achieve. Do you support crypto?

Coca-Cola | Stock to buy?

Coca-cola co. (KO) stock has been winning this week after revenues are looking up. With the pandemic coming to an end, can coca-cola keep up the gains?

Coca-cola suffered through the pandemic losing around half of usual sales. Before the pandemic, the company was building some serious momentum with a 16% sales increase at the end of 2019. Coke saw a 28% sales drop in the second quarter of 2020 which set poor performance as during the pandemic. Despite this, the company maintained strong balance sheets and continued to pay dividends unlike many which cut their payouts due to exceptional circumstances.

The first quarter of 2021 saw the company making a comeback with its first positive revenue after four quarters of losses. With lockdowns easing worldwide, can Coca-Cola pick up from where it left off pre-covid? The company has posted strong revenue growth over 2021 although their path to recovery is understandably unclear.

The pandemic shed light on some trouble areas in the company’s business model. With major changes to consumer behavior Coca-Cola tried to adapt by cutting costs, improving their marketing strategy and laying off workers. During this process they reduced their range of brands from 400 to 200 and launched more scalable brands. Competitor PepsiCo (PEP), whose beverage segment is not as large as Coca-Cola’s, weathered the pandemic better due to its more varied product range, including some food brands.

KO Dividends

Coca-Cola is valued for its dividend, which yields 3.1% at the current price. The company has raised its dividend for almost 60 years in a row. The company has an incredible track record of dividend and is committed to continuing this,no matter the challenge. 

KO Analyst Recommendations

The current consensus among 26 polled investment analysts is to buy stock in Coca-Cola Co. 

Graphic source: Money CNN

KO Price Forecast

The 22 analysts offering 12-month price forecasts for Coca-Cola Co have a median target of 60.00, with a high estimate of 67.00 and a low estimate of 53.00. The median estimate represents a +10.11% increase from the last price of 54.49.

Graphic source: Money CNN

Short-term it is unclear how quickly Coca-Cola gets back on its growth track, but long-term they are sure to expand and increase sales. Will you be investing? If so, we recommend eToro and easyMarkets for beginners. 

Trading 101: Options

Options trading allows you to hold a contract to buy or sell any underlying asset at a certain price over a certain period of time. This can be a much safer way to invest with high leverage compared to CFD’s. Read on to understand the basics!

What is options trading? 

Options trading involves buying and selling options as contracts that give the investor the underlying asset at a set price if it changes price within a set timeframe. Buying and selling options are done through contracts. There are two fundamental types: a call option lets you buy shares at a later time whereas a put option allows you to sell shares at a later time. For example, if you expect the price of gold to rise from £1,200 to £1,300 over a couple weeks you can buy a call option that allowed you to buy the market at £1,250 at any point over the next month. If the price of gold rises above £1,250 (the strike price) before the month is out you will be able to buy the market at a discount. However, if the price stays below the strike price then you lose the premium you pay for your position. So essentially, you are at risk of losing £50 if the strike price is not hit but if the price goes above the strike price you have an unlimited profit potential. 

In the UK you typically trade options using spread bets or CFDs. This works instead of trading them directly. Trading options as leveraged products works similarly to CFDs or spread bets which allow you to speculate movement without actually owning the underlying asset. This is both a blessing and a curse as it magnifies your wins but also your losses. Your risk is limited to the margin you paid to open the position although it is important to note that when selling call or put options you have a potentially unlimited risk. 

What sets the difference between options and futures is that options allows you to withdraw from the options contract at any point with your loss set a premium (the cost of the option) that is based on a percentage of the assets market price. This means there is a much lower risk than trading futures. 

When trading options a contract will have the following elements:

  • Stock ticker
  • Date of expiration
  • Strike price
  • Call or put
  • Premium price

Put together this would look something like this: 

APPL 26/03/2021 400 Call @ 5

What are call options?

Buying a call option gives you the right, but not obligation, to buy the underlying market at the strike price before a certain date. This lets you make profit as the market value increases. The fee you are paying to buy the call option is called the premium (it’s essentially the cost of buying the contract which will allow you to eventually buy the asset) which is comparable to making a down-payment. You pay for a contract that expires at a set time but allows you to purchase an asset at a predetermined price. You will have the choice to renew your option as their value decays over time. 

As with all trading you can also sell, in this case you will have the obligation to sell the market at the strike price if the option is executed on expiry. 

What are put options?

There are also put options which give you the right, but again not the obligation, to sell a market at the strike price within the expiry. In this case the more the market price drops, the more profit you make. If you choose to sell put options you will have the obligation to buy at the strike price if you exercise your option. 

So how do you calculate an option’s price?

There are three factors that affect the premium you pay when trading options which work to determine the likelihood the underlying market price will be above or below the options strike price at expiry. 

  • How high or low  the market is compared to the strike price: The further below the call options strike or the higher above the put options strike the higher the premium you are required to pay. This is as there is a high chance that the option will expire with value. 
  • The expiry date: The longer the option is open before it expires the more time there is for the market to pass the strike price. This means the closer you get to the expiry date the lower the chance that the option will expire in profit so will lose value. 
  • Volatility: The more volatile the market is the more likely the price will pass your strike price. In actuality a higher volatility will increase an options premium. 

Risk when trading options uses Greek symbols for each variable that affects price. 

Source: Robinhood

What are the safest options trading strategies?

The most simple and common strategy used involves buying a call option when you expect the market to rise. If this works out, then you will profit when you sell your option before the expiry or let time run out and exercise your right to buy at the strike and profit this way. This is a great strategy for beginners as you cannot lose more than the premium you pay when opening your option. 

A more complicated strategy but one that is key to learn is hedging your investment. If you want to avoid the potential market fall you can buy a put option. A married put means if the asset price falls you would make gains on the put to help limit your loss. 

What time frame should you use?

You can execute an options trade on a timescale from daily upto quarterly. If you want to open a position quickly whilst ensuring you have a lot of control over your leverage you can use daily or weekly options. Whereas if you’re looking at a longer-term movement in a market choosing monthly or quarterly options means you can know your risk upfront. 

What are common mistakes to avoid when trading options?

Although you can, it isn’t always advantageous to to hold a call or put an option until the expiry date. If your option has increased enough (beyond the strike price) then you can close the contract to take the profit at that point. Holding out may give you a greater profit but especially in highly volatile markets there is a chance the market price will fall again just before the expiry. 

Another common mistake is to not have an exit plan. By creating a plan before hand you can exit an option when you reach a loss or profit that you are happy with, similar to stop losses and take profits. This way, you can close your option with a profit or loss ou are comfortable with instead of letting the contract expire and the decision being taken from you. 

One more thing to be wary of is that cheaper option premiums aren’t necessarily better as this means you option is more ‘out of the money’ meaning the investment is riskier and the potential for profit is much lower. The highest risk option is buying an ‘out of the money’ option as this means the underlying security is far from the profit line. 

What are the pros and cons of options trading?

Options trading is pretty safe making it a great way for beginner traders to step up their game. Options are typically more resilient to changes in price direction changes allowing you to make profit over time without having to invest directly. 

As with all trading there is some risk involved depending on the level of volatility of the market you choose. Options are typically more expensive if there is higher uncertainty meaning the more volatile the market is for that particular asset the riskier it is to trade. 

At the end of the day if you understand what you are getting yourself into and are comfortable with the risk options can be very lucrative. Want to invest? We recommend eToro and easyMarkets for beginners. 

Should I buy Deliveroo shares?

Two weeks on we see how the Deliveroo IPO went. Deliveroo (ROO) failed to deliver in its London IPO last month, with shares plunging as much as 30% in its first day of trading. CEO admits the end of lockdown will hit their growth. So is Deliveroo one to avoid?

The stock floated at 390p but has since fallen to 269p two weeks later with the CEO’s worries dropping the shares a further 3p. Goldman Sachs and JP Morgan, which led the float have been accused of valuing the company too high especially in the current uncertain environment.

Chart: LondonStockExchange

Yesterday, Deliveroo CEO Will Shu shares concerns that the end of lockdown will hit company growth resulting in a wobble to their stock price. Some analysts were concerned that the IPO would do great but then would sharply drop for this very reason. As lockdown measures ease and the weather gets better, the public are more likely to want to go out and about to enjoy pubs and restuarants rather than hae a night in.

“Deliveroo expects the rate of growth to decelerate as lock downs ease, but the extent of deceleration remains uncertain.”

Some investors avoided the company out of concern for workers rights. A central part of the Deliveroo business model is to have workers that are super flexible but with a workforce of over 100,000 globally it might be time to change their tune. Supposedly, rider satisfaction is at an all time high at 89%.

Another issue has also arisen, CEO, Shu, has given himself voting rights well above his stake in the company due to his innovative dual share system he brought in.

Overall, Deliveroo has been performing phenomenally during lock down with sales growing 114% in the first three months of 2021. The 71 million orders that amassed over this time gave a nice £1.65billion take for the food delivery company.

The food delivery company now reaches over 60% of the UK population and says the different levels of lockdown restrictions across 12 markets will give an idea how people change behaviour with easings. For example, even since lockdown restrictions have been removed in Hong Kong, there is still resilient growth for Deliveroo,

Should I buy Deliveroo stock?

I believe the Deliveroo share price is more reasonably priced than in its IPO. But I still think it is overpriced. In fact, the company has a price-to-book ratio of around 27, which is a major indication of over-valuation.

Deliveroo share would make a good long-term investment, even if it takes some time to resolve its issues. If you want to start trading, we recommend eToro and easyMarkets for beginners.