How to invest in Facebook from Australia

Recommended Broker 🇦🇺
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👌Difficulty Low
☢️Commissions Zero
💲Minimum deposit 200$
🪙Instruments: Stocks like Facebook, crypto, forex, commodities
⚖️Regulated by: Cyprus Securities and Exchange Commission (CySec), United Kingdom's Financial Conduct Authority (FCA), Australian Securities and Investments Commission (ASIC)
🌐 Official website: www.etoro.com *
* Your capital is at risk.

How to buy

If you live in Australia, a great way to invest in Facebook shares is, definitely, this popular broker.

eToro*, one of the main brokers around the world, is registered and licensed, among others, by the United Kingdom's Financial Conduct Authority (FCA).

We recommend eToro because you can create an account for free with this broker, and its fees for trading online are very low. Besides, eToro is available in your language, accepts users from Australia, it is really easy to manage, and its friendly interface is ideal for those who are starting to trade with cryptocurrencies and stocks.

How to sign up, step by step

The first thing you need to do is click here and fill in the fields on the right: enter your name, email, and set a password.

Now check your email inbox: you should have received an email from eToro, click on the link and your account will be verified.

Once on eToro, you just have to click on “Deposit funds”, in the page menu.

There, you can choose how much money you want to add to your account (the minimum is $ 200) and the payment method:

As you can see in the image, the first deposit can be made by credit card, PayPal, or bank transfer.

How to make your first trade

When eToro has confirmed the receipt of your credit, you just have to search for “Facebook” in the search bar, click on “Invest” and choose the amount in dollars you want to invest.

*67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money
Cryptoassets are highly volatile unregulated investment products. No EU investor protection. Your capital is at risk.

About this company

Facebook, beyond the famous social network, is a company that is part of the group of the Big 5 of technology along with Alphabet (Google), Amazon, Apple and Microsoft. And in addition to the social network Facebook, with almost 3 billion users, the company owns Instagram and WhatsApp.

The social network Facebook has long remained the most used social network. And WhatsApp, Facebook Messenger and Instagram are not far behind in the ranking as they are only surpassed by YouTube, which ranks second. So, Facebook (company), there is no one to take it out of the big 5 or dethrone it as the number one social network.

All this is well known and many people invest in the company just for this. But Facebook also has other projects that are little known and that can have a great impact for the company. Among them, the most relevant surely is the cryptocurrency Libra, which became a stablecoin called Diem.

The Facebook cryptocurrency: from Libra to Diem

Initially, Facebook announced in June 2019 its intention to create a cryptocurrency that would be integrated into its products (Facebook, Facebook Messenger, Instagram and WhatsApp). This with the intention that users could have a secure and very cheap form of payment in their accounts. This is how Libra was born.

However, this announcement alarmed many countries because as we know, cryptocurrencies are decentralized and cannot be regulated by governments. So many were directly and openly against the company's initiative. Mainly because of the fear that the cryptocurrency would destabilize economies given the number of Facebook users.

After complying with many legal requirements demanded by some countries (including the United States) in which basically mechanisms were agreed to avoid destabilizing the economy and that the State can maintain control of fiscal and monetary policy, Facebook can bring its cryptocurrency to the market, only now it is called Diem.

In addition to the change from Pound to Diem, it is now a stablecoin backed entirely by circulating money. Its value, unlike other stablecoins such as Tether, does not fluctuate and always maintains a 1 to 1 relationship with the reference currency. And we say reference currency because it not only represents the dollar, but also the euro and the pound sterling, among others.

The best thing is that in addition to being Diem a stablecoin, it is backed by the company Facebook and many others among which Coinbase, Uber, Shopify and Spotify stand out. Undoubtedly, this is one of Facebook's greatest successes as a company and will undoubtedly have positive repercussions on its valuation.

About Contracts for Difference

It is possible that you have found the initials CFD more than once if you entered eToro before. We will come back to it, but first, you should know that cryptocurrency operations on eToro are only CFDs when you short sell.

We will also refer to concepts such as going short and leverage, in case you are considering day trading cryptocurrency or more advanced practices.

eToro allows you not only to bet “in the black”, but through CFDs you can also bet “in negative”. For example: you are sure that the Facebook will fall, so probably you think that it is better to refrain from getting in until it actually falls. However, if you really consider that it's going down, why not take advantage of that and making money?

You can do by “going short” which consists in something like this:

  • They lend you, for example, 100 units of Facebook, valued at a total of $ 5,000 (these numbers are completely made up)
  • Then, you get $ 5,000 by offering them at the market price
  • As you supposed, it devaluates, and the unit of Facebook now costs $ 30 instead of $ 50
  • You buy the 100 units again, but at their current price, $ 3,000
  • Now you pay back the 100 units
  • The rest is yours, so, you will have earned $ 2000

Consider that it is much simpler than it sounds: we can summarize this whole operation by saying that by trading in Facebook you can also make money if you predict it will fall.

Financial instruments you can operate with in this broker

Besides stocks, there are more financial instruments you can trade in this broker.

ETFs

ETFs or Exchange-Traded Funds are similar to index funds. They can be described as a combination of stocks and mutual funds, including the best of both. They can be traded like regular stocks, but include a wide diversity of assets and have lower fees.

Commodity market

The main attraction of investing in raw materials is that their price fluctuates less than that of other financial assets. In fact, their stability is what makes most people trade with raw materials when facing possible inflation or market volatility. However, the cost of raw materials is determined by supply and demand, so if faced with the fear of inflation, demand rises a lot, so will the price.

Remember that the only intended income from the investment in raw materials will be the hypothetical capital gain after the sale since, unlike stocks, these do not give returns or pay interest.

Commodities can be divided into two main categories: hard raw materials and soft raw materials. The former are precious metals (such as gold, silver, copper, and platinum), industrial metals, and oil; while the latter are agricultural resources as wheat, soybeans, vegetables, or even dairy.

Trading strategies

There are different methods or ways for crypto trading, such as day trading or buying and holding, for naming just a few.

If you don't have much experience in investment, my suggestion is something in the middle: placing a dynamic stop-loss (15-20% under the highest price) when you open your Facebook position and wait for it to work.

For example, if you buy a cryptocurrency at $ 15, it rises up to $ 25 and decreases again to $17, the stop-loss will close your position at $ 21 or $ 22. Thus, you will get a satisfactory income.

It might sound way better to sell when the price is at its highest, right before corrections, but that is simply not possible. The mentioned strategy is much more down-to-earth and it can give great results.

Later on, you will be able to apply more complex techniques, like using leverage or going short.

How does a virtual portfolio work?

Are you beginning in trading? Using a demo account can be very helpful. You just need to set the virtual mode and you can start practicing with an “imaginary” portfolio.

This can be a great way of gaining experience and confidence before starting to trade with real money. You will have an amount of $ 100.000 (“fake” or virtual, of course) to begin with, and you can operate with a variety of assets in your portfolio, not just with Facebook.

The first attempt is not usually that good. But don't worry, because you can ask eToro to deposit back the virtual $ 100k to your portfolio, and the second time you should do better.

However, keep in mind that you need to be prudent for trading, and demo account trading can have an adverse effect. It is completely different to risk your real savings than to trade with a false balance which loss does not suppose any drama. Also, using fake money can prevent you from learning to control your emotions, as a true investor should.

Evidently, if you want to invest in the medium or long-term, with profits almost guaranteed only by replicating a strategy, it doesn't make sense that you invest in the virtual mode and wait for years. On the other hand, short and medium-term trading is ideal to try out with the virtual mode.

eToro Interface

We said before that eToro is very friendly and intuitive. Anyone can start using it without previous experience or long explanations.

You won't have any problems with the interface if you are familiar with any other social network.

We will explain, roughly, the registration steps and the different tabs that you will see.

You will have to fill in some requested data when registering.

They will also ask you about your previous trade experience.

However, it's not like they're testing you or anything. They are only measures to know how much knowledge you have and what type of assets they can suggest. For instance, if it is your first experience in the investment world, they will not recommend that you invest in futures.

When you fill in all your information in your profile, you will stop seeing the “incomplete profile” message.

Next, we will explain the different sections of the page.

With the “Set Price Alerts” tool, you'll be able to program an alarm when a security is at a certain price. This is perfect in case you want to purchase an asset and you are waiting for its price to fall.

The section “News Feed” allows users to interact and learn from each other by sharing their opinion and experiences.

“Discover” includes the tabs “Instruments”, “People” and “CopyPortfolios”. As we mentioned previously, the financial instruments that eToro offers are:

  • Cryptocurrencies
  • Exchange-Traded Funds
  • stocks
  • Commodities
  • Currencies
  • Index funds

The concept “social trading” makes sense in the section “People”: there, you can replicate the trading strategies of the users you find most inspiring with just one click. You'll be able to see all their profiles and historical performances.

You can search for those users that you find more interesting: by average profits, market or risk level, for instance. You just have to choose the amount of your investment and eToro itself will be in charge of replicating the movements of the investor you chose, in proportion. “In proportion” means that if you have $ 1000 and the investor puts 10% of his or her balance in an asset, eToro will invest also 10% of your money (that is, $ 100) in that same asset.

Finally, there are three main types of CopyPortfolios: Top Trader, Market, and Partner.

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The advantage of using CopyPortfolios instead of copying people is that this way the risk is more diversified. There are all kinds of portfolios that you can recognize easily and are divided by sectors. Therefore, in case you suspect a specific industry, such as biotechnology or oil, has a good chance of prospering, you should look for that specific portfolio.

“Social trading”, an innovative concept

eToro was the first broker to suggest trading as a social activity, and time has proven that it was an excellent idea. A lot of copycats have appeared since then, but eToro is definitely superior.

But it wasn't just about creating yet another social network to talk about investment. The main achievement was in the possibility for users to copy the strategies of experienced traders, and to reward the latter for their ideas and knowledge.

It sounds complex but it isn't: when you enter eToro you will find in the menu on the left the options “Copy People” and “Invest in CopyPortfolios”.

CopyPortfolios

“CopyPortfolios” are kinds of ETF or thematic index funds, a portfolio that bundles a number of assets in a certain sector. For instance, if you heard that the gaming industry is going to succeed shortly but you don't have enough information (or time) to choose stocks, you just have to invest in the CopyPortfolio called “InTheGame”, which includes companies like Microsoft, Google, Tencent, NVIDIA, Logitech, Intel, AMD, Nintendo, Ubisoft, Unity…

At the time of writing this article, this CopyPortfolio has generated a 100% profit in the last year, and you just need to click on “Invest”, enter the amount, place the stop-loss and wait.

Copy People

But it is also possible to copy other successful traders of the platform. With “Copy People” you can locate them and duplicate their moves easily.

In each user profile, you will see their risk profile (the higher the risk, the more chances of winning more and losing more), their performance, and the kind of instruments they operate..

Copying strategies from others can be very interesting and useful, but you should also make the most out of the platform's community, read what other users think, and learn from them. If your goal is to end up living from investment, it is a great place to absorb a lot of knowledge.

Common questions

How much is the minimum investment in Facebook?
The minimum deposit in eToro is 200USD.

When will I be able to take out my funds?
Whenever you want. Simply close your Facebook investment, go to “Withdraw Funds” section and that's all.

What payment methods are accepted?
Available payment methods are: Bank Transfer, Credit Card, PayPal, Neteller, Rapid Transfer, Skrill and Klarna / Sofort Banking.

* Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Disclaimer: 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.