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How to buy
If you live in Ireland, a great way to invest in JP Morgan shares is, without any doubt, 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 your language, accepts users from Ireland, 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 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.
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 JP Morgan rising while you wait for your transfer to be done.
How to make your first trade
When eToro has confirmed the receipt of your credit, you just have to search for “JP Morgan” 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 JP Morgan a buy?
JP Morgan is a U.S. financial institution founded in 1871 from which originated the three largest banks in the world: JP Morgan Chase, Morgan Stanley and Deutsche Bank. Currently, when referring to JP Morgan, we are talking about JP Morgan Chase, which was born from the merger between the original bank and Chase Manhattan Corporation in 2000.
Chase Manhattan Corporation also has a long history, dating back to 1824 with the name of Chemical Bank. It was for several periods the largest bank in the United States in terms of both deposits and investments.
Since its foundation, Chemical Bank grew and merged with other banks, and in 1996 it acquired Chase Manhattan Corporation. It kept this name until 2000 when it merged with JP Morgan and formally became JP Morgan Chase & Co.
The merger of these two large banks gave rise to a giant that is considered the oldest financial services institution in the world. In addition to being the largest having as assets the astronomical figure of 3,689,336,000,000,000 dollars, that is, 3.6 trillion.
JP Morgan Chase as an investment
The phrase “too big to fail”, which has economic implications behind it, fully describes today's JP Morgan Chase. It is virtually impossible for this bank to fail, regardless of the state of the economy.
And if it did, it would be immediately bailed out by the U.S. government as has happened with other banks. This is because, given its size, it would have huge implications for the economy as a whole if JP Morgan Chase were to disappear.
However, as we have already said, it is practically impossible for this to happen because JP Morgan Chase, together with the FED, has bailed out other banks. Such is the magnitude and importance of this financial institution.
So, if an investor is looking for a company where his money is safe in every way, JP Morgan Chase is the best possible choice. Because to conclude, the shares of this company have good yields and pay dividends to its investors.
Payment methods on eToro
When it comes to payment on eToro, there is not much to say, since it is pretty simple. You only need to select “Deposit funds”, type an amount, and choose the payment option you prefer. You can use PayPal, bank transfer, credit card (Visa, MasterCard, Diners, Visa Electron and Maestro), Skrill, or Neteller.
Of course, take into consideration that for security reasons, you need to be the account or credit card holder.
The minimum first time deposit is $ 200, and there is a maximum limit for unverified accounts. So, if your intention is to deposit larger sums, you will need to verify your account previously.
Also, remember that you can make the transfer in any currency because eToro converts it to USD, but charges a commission for it, so it is preferable to make the transfer directly in USD.
How do Contracts for Difference work?
You probably have found the term CFD now and then if you already registered on eToro. Before we explain what this is, you should know that CFDs on eToro are only possible when you are short-selling or leverage above x2 (and the platform does not even allow this option).
We will also explain terms such as leverage and “going short”, in case you are thinking about day trading cryptocurrency or more advanced practices.
The good thing about eToro is that it allows you not only to bet if you are “in the black”, but with CFDs you can also bet “in red”. Let's say that you believe that the JP Morgan will fall, so probably you consider that the best thing to do is wait until it does and then go in. But if you are pretty sure that it is going down, why not take advantage of that and earn money?
You can do this through a practice known as “going short” which consists in something like this:
- You ask someone to lend you, for instance, 100 units of JP Morgan, which cost $ 5,000 at the moment (these figures are made imaginary)
- You sell them at their market price, $ 5,000
- As you presumed, the price falls, and the unit of JP Morgan goes from $ 50 to $ 30
- You obtain the 100 units again, but at their current price, $ 3,000
- Now you return the 100 units
- The rest is yours, so, you will have earned $ 2000
It all sounds more complicated than it really is. Just bear in mind that by trading in JP Morgan on eToro, you can earn money if you anticipate downs in the price.
Differences between futures and CFDs
Here are the main differences between CFDs and Futures, in case you want to know more:
- Futures: the exchange is made with someone else, another trader.
- CFDs: the counterparty is the brokerage, in this case, eToro.
- Date of expiration:
- Futures: they expire. Once the contract expires, it is closed even if you are in red.
- CFDs: on the contrary, there is no expiration date. It is possible to get back to a good position before closing.
- Trading options:
- Futures: options are much more restricted
- CFDs: a lot of variety, there are CFDs of practically anything
- Minimum investment amount or “trade size”:
- Futures: minimum investment is higher
- CFDs: you can start trading with a low amount
- Trading costs:
- Futures: costs are usually lower
- CFDs: higher (although not too much)
- Use of leverage:
- Futures: it isn't possible to trade with leverage
- CFDs: completely available
Trading with leverage
If you still don't know what “leverage” is, we'll describe it briefly: it is the possibility to use a higher amount than you actually have. That way, if you start with $ 100 and you use x2 leverage, you will be investing $ 200.
Leverage and the importance of “Take Profit” and “Stop Loss”
Assuming that, for instance, you are sure that JP Morgan price is going up, and that you have $ 1,000 for “going long”, you should know that you have the option of investing more and making more money.
Possibly, you could ask your bank for a credit, put an asset as collateral, wait for it to be accepted and receiving the money, and then buy JP Morgan… But by that moment it is possible that your prediction was confirmed already and JP Morgan price is at such a high value that it is not worth trading.
Thanks to leverage, you can get that amount just by moving a finger. It's like a loan, but much easier and quicker, and with the advantage that you will be getting it directly from eToro. As in the image below, you will see the different options you have:
Trading with other assets allows you to use higher leverage. Why? Because cryptocurrencies usually represent medium-long term investments. However, leverage is used mainly for day trading or short-term operations. But let's deepen a bit more on how all this works.
If for your investment of $ 1,000, you choose leverage x2, you will be investing $ 2,000, as we mentioned. eToro would be “loaning” you the extra $ 1,000.
A couple of days later, as you thought, JP Morgan price increases 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 back.
You need to pay back the $ 1,000. You have $ 1,400 left, of which $ 1000 was yours initially, so you'll have earned $ 400.
With $ 1000 you get a profit of $ 400, no less than a profit of 40%. Not bad, right?
But there's always a downside. If all goes as you intended and the price rises, you will make profits. On the other hand, if the price falls, you will also lose more money in the blink of an eye.
For example: if the price falls by 10%, you do not lose $ 10, but $ 20, because of the leverage. That is why the concepts of Take Profit and Stop Loss are crucial when using leverage.
Take Profit is the automatic order to sell once the asset is above the entry price: you purchase JP Morgan shares at $ 100 and you ask eToro to automatically close your position as soon as the price reaches $ 120. It is very useful to avoid being blinded by greed: we would all accept a 20% profit when investing, but when you reach that 20% it is easy to ask yourself “what if this keeps increasing and I can earn even more?”. It's like you made sure now of not acting recklessly in the near future.
Stop Loss is even more necessary, especially if you use leverage, since a reduced loss with leverage can have a significant impact. Always remember to set a Stop Loss more conservative than that suggested by the platform.
You can operate cryptocurrencies in many different ways: for example, you can buy and hold, or you can day trade using price volatility to your advantage.
My recommendation for those who are beginning to trade is something in the middle: placing a dynamic stop-loss (15-20% under the highest price) and wait for it to work on its own.
Therefore, if for example you acquire a cryptocurrency at $ 10, it rises to $ 20, and after that it decreases to $ 12, your stop loss will take you out of the trade at $ 16-17 and you will make a pretty good profit.
It may sound more appealing to sell when the cost is at its maximum, right before corrections, but that is simply not possible. The above method is much more realistic and, well applied, it can work very well.
Eventually, you will be ready for applying more advanced trading techniques, like going short or using leverage.
We said before that eToro is very easy to manage. Anyone can start using it without having to read endless explanations.
You won't have any issues with the interface if you are familiar with any other social network, like Whatsapp or Facebook.
We will talk about the registration process and the different tabs you will find on the platform.
When you open your account, you will have to enter your personal data.
Additionally, you will have to answer some questions about your experience as an investor.
But don't feel intimidated. The only intention is to know more about you and determine which financial instruments they should suggest according to your knowledge and experience.
You will see a bar that says “incomplete profile” until you fill in all the information.
Next, we will explain the fundamental sections of the interface.
“Set Price Alerts” allows you to set alerts on the price of certain securities. This is very helpful when you are after a security that is falling, but it seems to you that it has not finished falling yet.
In the “News Feed” tab is the most social part of eToro: where users are interacting all the time and sharing valuable information.
“Discover” includes the tabs “Instruments”, “People” and “CopyPortfolios”. And we already discussed the different financial instruments on eToro:
- Raw materials
- Index funds
In the section “People”, you will find eToro users and their performances. This is where you can duplicate the strategies of the users that you find most inspiring.
You will be able to find those traders that you find more interesting. When you choose an investor and indicate the amount you want to invest, eToro will automatically replicate their movements, proportionally. For example, if you have $ 1000 and the trader puts 20% of their funds in an asset, eToro will also invest 20% of your money in the same asset, in this case, $ 200.
Lastly, you will also see the CopyPortfolios divided into three main categories: “Top Trader”, “Market” and “Partner”.
Sometimes you might prefer copying to CopyPortfolios than to individuals, since the former offer more diversity. The different portfolios are easily identifiable: one about gaming, another about large drone companies, another about pharmacy … Do you suspect that a certain sector will prosper anytime soon? Then look, because surely there is a CopyPortfolio about it.
Frequently asked questions
* 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.