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How to buy
If you live in Australia, the best way to invest in Zoom shares is, definitely, this popular broker.
eToro*, one of the main brokers around the world, is registered and licensed, among others, by the Cyprus Securities and Exchange Commission, and therefore complies with all the regulations of the European Union, the most demanding in the world.
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 our 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: you should have received an email from eToro, click on the button 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.
If you have a choice, we do not recommend bank transfer because it takes longer, and it can be very frustrating to see the price of Zoom rising while you wait for your transfer to be done.
How to make your first purchase
When eToro has confirmed the receipt of your credit, you just have to search for “Zoom” 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.
Is Zoom a buy?
Zoom Video Communications, the company behind Zoom video conferencing software, is an American company founded in 2011 by Eric Yuan. And although it has been embroiled in many controversies over security issues, Zoom has seen impressive growth.
Yuan's idea was to develop software that would allow people to see each other regardless of distance and without the need to travel. It was this idea that gave rise to Zoom, although it was not really something new because, at the time, several companies were already offering the service.
However, Zoom was more popular than any other, mainly due to its ease of use and the fact that it was free of charge. Thus, in the midst of the technological revolution represented by smartphones, Zoom offered its software free of charge for computers, laptops, tablets and smartphones.
Zoom's business model
As you may already know, Zoom is still free, you can download the program, install it and use it without paying anything. But then the question arises, how does Zoom make money? And the answer is very simple: with subscriptions to a “premium” version.
Zoom has been involved in several controversies regarding the security of the application since the free version does not secure the data. And although the company has publicly apologized for this, the reality is that this is where its business model lies.
Basically, if you use it for free, your video calls are not encrypted, the room is unprotected and the data does not travel directly between participants. The latter is the most controversial because part of the Zoom communications go through Chinese servers where, by law, the government has the right to record the data.
But, if you use the paid version, all problems are magically solved. Your video conferences are private, the data is encrypted and travels from one person to another directly without anyone being able to “read” it. It's that simple how they make money.
And despite this controversy, Zoom has emerged victorious as since its IPO in April 2019 this company has not stopped growing while others disappear. And we are not only referring to the financial market, but also to its growth in the number of users which in the long run means higher revenues and a better valuation of this company.
Financial assets you can operate with in this broker
Besides stocks, there are other financial instruments available in this broker.
Most people invest in raw materials due to their stability. While other assets tend to fluctuate more, commodity prices vary less and offer safety against inflation or market volatility. Nevertheless, prices do depend on supply and demand, so if the fear of possible inflation produces greater demand for a certain good, the price will also rise.
Consider that the only intended income from the investment in raw materials will come from their further sale because, unlike stocks, commodities don't pay dividends.
Commodities can be classified into two main types: 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 products, such as cocoa, soybeans, rice, or sugar, among many others.
ETFs or Exchange-Traded Funds are similar to index funds. We can say that ETFs are halfway between stocks and funds: they can be traded like regular stocks, but include a wide diversity of assets and have lower fees.
Forex or currency trading is the exchange between two currencies in order to obtain a profit.
If you decide to exchange EUR and USD, for instance, you speculate how many dollars it will take to buy a euro, with the expectation that the first currency (the euro) will raise its price compared to the second (the dollar), to make a profit by selling it. Let's say you entered when a euro is worth 1.10 USD and you exit when a euro is worth 1.15: that margin is yours once you sell again.
You may be thinking that trading with currencies requires investing considerable amounts, and that is correct, because fluctuations are usually minimal, and if you use a lot of leverage to counter that, you will take a considerable risk. Our recommendation for those who are new in the world of trading is not to start with Forex, but with a safer and simpler market.
You can operate with almost all well-known currency pairs on eToro but consider that Forex trading functions with contract for differences, so the underlying asset won't be yours.
As we have mentioned among the positive aspects of eToro, the best thing about this platform is its extraordinary simplicity: anyone can invest without having to read endless guides.
Everyone who has used social networks like Instagram or Facebook, has enough skills to use eToro.
Now we will detail the registration process and the different sections of the eToro interface that you should familiarize yourself with.
You will have to provide some personal information when registering.
They will also ask you about your previous trading activities.
But don't feel like you are taking an exam. They only intend to find out how much you know and which financial instruments to recommend for you.
Let's review the different functions of the interface.
With the “Set Price Alerts” tool, you'll be able to program an alert when an asset is at a certain price. Just click the tab and you will be able to set it. This is ideal if you want to buy an asset that is falling but you believe it will decrease even more.
The section “News Feed” allows users to interact and learn from each other by sharing their opinion and experiences.
In “Discover” you will find: “Instruments”, “People” and “CopyPortfolios”. And we already mentioned the kinds of assets that are available on eToro:
- Exchange-Traded Funds
- Index funds
The term “social trading” makes sense within “People”: that is where you can copy the strategies of the investors you find most inspiring with just one click. You'll be able to see all their profiles and historical performances.
In this section, you can find those users that you find more interesting. When you choose an investor and indicate how much you want to invest, eToro will automatically replicate their movements, in proportion. For instance, if you have $ 1000 and the trader puts 20% of their funds in an asset, the platform will also invest 20% of your money in the same asset, in this case, $ 200.
You will also see the three main types of CopyPortfolios, which are classified into “Top Trader”, “Market” and “Partner”.
Sometimes it might be better to copy from CopyPortfolios than to individuals, because the former offer more diversity. The portfolios are identified so you can recognize them easily: one about gaming, another about large drone companies, another about pharmacy … You think that a certain industry is going to succeed in the future? Then look, because surely there is a CopyPortfolio about it.
Do you know what “social trading” is?
The first platform that conceived trading as a social activity was eToro, and the idea became popular really quick. Other brokers have also taken this concept, but we have tried them all and eToro is way better.
The merit of the platform is that they did not limit themselves to transferring the logic of the social network to the trading world. They could have made the umpteenth social network in which users talk about investing, but they wanted to go further: the great innovation of eToro was allowing investors to replicate the investments of other users, who were rewarded for their knowledge.
Perhaps it sounds complicated, but it is very simple. When you access eToro you will find in the menu on the left the options “Copy People” and “Invest in CopyPortfolios”.
“CopyPortfolios” are a kind of portfolio that bundles a number of assets in a certain sector. For example, if you anticipate that a particular sector will succeed in the near future but you don't know which stocks to invest in, you just have to choose a portfolio that includes a variety of related companies in that industry.
CopyPortfolio has generated a 100% return in the last twelve months, and you just need to click on “Invest”, enter the amount, place the stop-loss and wait.
But you can also copy other users of the platform who are successful investors. With “Copy People” you can locate them and replicate their strategies easily.
You will see in the profile of users: the type of assets they trade (currencies, cryptocurrencies, raw materials, shares…), their risk profile (a higher risk implies higher possibilities of earning more or losing more), as well as their trading history.
Besides duplicating other investor's strategies, which is really interesting and helpful, we also suggest that you benefit from the community by reading other users. You can learn a lot from their experiences, mainly if your goal is to make a living from investments.
How to use leverage when trading Zoom
If you still don't know what “leverage” is, we'll put it short. When trading, it's the capacity of enlarging your investment by borrowing money from the broker. For example, you can enter with $ 100, but if you leverage x2, your initial investment will be $ 200.
Why using leverage and how to do it
Assuming that, for instance, you are sure that Zoom price is going up, and that you have $ 1,000 for “going long”, you should know that you can increase your investment and make more money.
There's the possibility of asking for a loan, but it is a process that takes time, and when you receive the money, Zoom might be already so expensive (if your guess was right) that investing wouldn't be convenient anymore.
Leverage is like a loan, but it is only a few clicks away! eToro allows you to operate with much more money than what you have on the platform's wallet. Before trading, you will find the leverage options as in the image:
Within other markets, you can use more leverage. The reason is that cryptocurrencies are a value that is invested in the medium-long term, and leverage is used mostly for day trading or short-term operations. Let's talk a bit more about how leverage works.
You begin with $ 1,000 and decide to use leverage x2, then you would have $ 2,000 to invest, since eToro would put the other $ 1,000.
A couple of days pass and turns out that you were right: Zoom price raises its price by 20% and the value of your investment is now $ 2,400. But you don't want to take too much risk, so it's time to sell.
You will have to pay back the $ 1,000 of leverage and the net profit would be $ 400 (since the other $ 1,000 was your initial investment).
In conclusion, by investing $ 1000 you can make a profit of 40% (in the case you earn $ 400). That is pretty decent.
Still wondering where the catch is? The trick is that the risk of losing out also increases. If everything goes according to plan and the price goes up, you will earn profits in little time; but if the opposite happens, you will also lose more really fast.
Let's imagine that the price didn't increase by 20%, but it went down also by 20%, you won't lose $ 20 but double, $ 40. Because of that, the concepts of Take Profit and Stop Loss are fundamental when using leverage.
Take Profit is the automatic sell order that is above the entry price: you purchase Zoom shares at $ 100 and you ask eToro to close your operation as soon as the price goes up to $ 120. It is very helpful to avoid being blinded by enthusiasm: a 20% profit is usually very good, but once you see the price has risen, you might want to gain a bit more and decide to wait, but this could be a mistake. So, Take Profit helps you reduce risks when trading.
Stop Loss is even more necessary, mostly if you use leverage, since a small loss with leverage can be fatal for your wallet. Always remember to set a Stop Loss more conservative than that suggested by eToro.
How does a demo account work?
In case you are taking your first steps as an investor, you can start by practicing with a “demo” option. You only need to set the “virtual” option and you will be able to trade with an imaginary balance.
This is a great tool for those who are new to this world and want to put their talents to the test before playing for real funds. With your virtual account, you will begin with a $ 100,000 balance (which of course, is fake) to do all the trades that you can think of: not just with Zoom, you can also work with a diverse portfolio.
Don't worry, since if you lose all your virtual balance, you can contact support so they can add them back to your demo account and you can try again.
Keep in mind that trading is mainly about being cautious, and perhaps a virtual account can prevent you from controlling your impulses. It will never be the same as risking your own money.
Finally, the virtual mode is kind of absurd if you want to trade in the medium or long-term (which almost assures you a profit only by replicating an index), since you would be wasting years. Demo accounts may be ideal for practicing short or medium-term investments.
* 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.